As of our last client update on the Corporate Transparency Act (CTA) litigation (see CTA client alert), the U.S. Supreme Court, in an 8-1 ruling, lifted a nationwide injunction issued by a Texas trial court in Texas Top Cop Shop v. Bondi that had blocked CTA enforcement, but another nationwide injunction issued by another Texas trial court in Smith v. United States Department of the Treasury continued to stall CTA implementation. Now, the new Trump Administration, in its first formal actions related to the CTA litigations, (i) on February 5, filed a notice of appeal and motion to stay the injunction in Smith, and (ii) on February 7, filed a brief supporting the constitutionality of the CTA in Texas Top Cop Shop. Given the Supreme Court’s decision in Texas Top Cop Shop to lift the injunction against CTA enforcement, we believe the government’s effort to stay the injunction in Smith is likely to succeed.

Continue Reading Trump Administration Continues Defense of Corporate Transparency Act, Indicates FinCEN’s Flexibility On Deadlines And Scope

The long and winding road of the Corporate Transparency Act (CTA) litigation (as discussed in our most recent CTA client alert) has taken another turn, and this time companies are driving blind. On New Year’s Eve, the U.S. Department of Justice (DOJ) asked the U.S. Supreme Court to lift the injunction imposed by a Texas court and let the law go into effect while the legal contest over the constitutionality of the law is pending. Yesterday, the U.S. Supreme Court resoundingly agreed with the DOJ. In an 8-1 ruling, the nation’s highest Court lifted the stay on enforcement of the statute. One might assume that the Supreme Court ruling ended the injunction issue, but a separate order issued by a different federal judge in Texas blocking enforcement of the statute nationwide remains in place.

Continue Reading U.S. Supreme Court Lifts Initial Injunction Against Enforcement Of Corporate Transparency Act, But A Separate Injunction Continues To Halt Implementation 

Introduction

In this three-part series, we discuss recent developments relating to whistleblower programs in the United States (read here). Second, we review whistleblower initiatives in other jurisdictions over the past year (read here). Third, we consider emerging issues and considerations for companies in relation to whistleblower reports.

Continue Reading Whistleblowing in Focus: Recent Developments, Emerging Issues, and Considerations for Companies. Part Three: Looking Ahead

The following is part of our annual publication Selected Issues for Boards of Directors in 2025. Explore all topics or download the PDF.

The Securities and Exchange Commission (SEC) and Department of Justice (DOJ) both had active enforcement years in 2024. The SEC’s aggressive focus on crypto enforcement continued, resulting in the filing and continued litigation of several cases in federal courts nationwide. The DOJ announced a number of policy updates in 2024, including guidance related to voluntary disclosures and corporate enforcement, and remained active in the foreign corruption and national security spaces. Finally, both the SEC and DOJ have increased their focus on AI and new technologies, showing increasing concern about the risks associated with AI, with the DOJ issuing guidance on AI in compliance programs and the SEC bringing cases related to misleading marketing about the use of AI in investment strategies. As noted more fully below, with the incoming Trump Administration, enforcement priorities at both SEC and DOJ are expected to shift. The SEC is expected to have a renewed focus on traditional enforcement areas, such as accounting fraud, misrepresentations in securities offerings and insider trading, with significant reductions in enforcement activity related to crypto, cyber incidents and ESG issues. The DOJ is likely to continue its focus on FCPA and national security (including sanctions and export controls), while devoting increasing resources to immigration and violent crime. Additionally, the benefits of cooperation are likely to increase at both the SEC and DOJ, with the potential for reduced penalties for companies able to effectively demonstrate their cooperation and self-remediation.

Continue Reading An Active Year in Enforcement, with Changes to Come

Introduction

In this three-part series, we discuss recent developments relating to whistleblower programs in the United States.  Second, we review whistleblower initiatives in other jurisdictions over the past year.  Third, we consider emerging issues and considerations for companies in relation to whistleblower reports.

Continue Reading Whistleblowing in Focus: Recent Developments, Emerging Issues, and Considerations for Companies. Part Two: Global Developments

Introduction

Whistleblower programs have proliferated and been growing in importance in the criminal and regulatory enforcement landscape globally.  In this three-part series, we first discuss recent developments in whistleblower programs in the United States.  Second, we review whistleblower initiatives in other non-U.S. jurisdictions over the past year.  Third, we address how developments in whistleblower programs impact corporations.

Continue Reading Whistleblowing in Focus: Recent Developments, Emerging Issues, and Considerations for Companies. Part One: Developments in the U.S.

On December 20, 2024, the Securities and Exchange Commission (the “SEC”) adopted amendments to Exchange Act Rule 15c3-3 (the “Customer Protection Rule”) to require carrying broker-dealers with $500 million or more in average total credits to perform the customer and PAB (i.e., proprietary accounts of broker-dealers) reserve account computations and make any required deposits daily, rather than weekly (the “Final Rules”).  Approved by a 4-1 vote,[1] the Final Rules included several changes from the proposed rules, which we discussed in our prior Blog Post.

Continue Reading SEC Adopts Rules Requiring Daily Computation of Customer and PAB Reserve Requirements for Certain Broker-Dealers

On December 26, the U.S. Court of Appeals for the Fifth Circuit vacated the previous grant of a stay of the injunction enjoining enforcement of the Corporate Transparency Act (CTA) and beneficial ownership reporting rule.  As a result, the nationwide preliminary injunction originally granted by the district court is once again in effect pending consideration of the DOJ’s appeal by the Fifth Circuit’s merits panel.

Continue Reading Fifth Circuit Reinstates CTA Injunction Pending Oral Arguments in March; FinCEN January 13 Deadline on Hold

In our prior notes of December 4, 9, and 13, 2024, we reported that (1) a district court in Texas issued a nationwide injunction halting implementation of the Corporate Transparency Act (CTA), (2) the Financial Crimes Enforcement Network (FinCEN) acknowledged that companies need not file CTA mandated disclosures while that injunction remained in effect. Subsequently, the U.S. Department of Justice (DOJ) moved to stay the injunction pending appeal. The district court rejected that motion, but on December 23, 2024, the United States Court of Appeals for the Fifth Circuit granted the government’s motion, staying the district court’s injunction and expediting briefing of the appeal. In so doing, the Court concluded that the government had “made a strong showing that it is likely to succeed on the merits in defending CTA’s constitutionality.” In addition, the Court rejected the plaintiffs’ warnings that “lifting the . . . injunction days before the compliance deadline would place an undue burden on them,” reasoning that the plaintiffs filed suit only months ago and the injunction had been in place mere weeks, whereas businesses have had “nearly four years . . . to prepare since Congress enacted the CTA, as well as the year since FinCEN announced the reporting deadline.”

Continue Reading Fifth Circuit Pauses District Court CTA Injunction; FinCEN Extends Filing Deadline to January 13, 2025

As outlined in our prior update, on December 3, 2024, a Texas federal district court issued a preliminary injunction that temporarily blocks the Corporate Transparency Act (CTA) and its implementing regulations from taking effect nationwide. 

Continue Reading DOJ Appeals CTA Injunction; FinCEN Suspends Filing Requirement