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, 2025DOJ Appeals CTA Injunction; FinCEN Suspends Filing Requirement
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 RequirementFederal District Court Enjoins Enforcement of U.S. Corporate Transparency Act
We want to make you aware that yesterday, a Texas federal district court issued a nationwide preliminary injunction temporarily blocking the effectiveness of the Corporate Transparency Act (CTA) and its implementing regulations, which require certain companies (including certain non-U.S. companies registered to conduct business in the United States) to disclose beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.
Continue Reading Federal District Court Enjoins Enforcement of U.S. Corporate Transparency ActSEC FY 2024 Enforcement Results: Record Dollars But Many Fewer Cases
By Robin M. Bergen, Matthew C. Solomon, Tom Bednar, Jackie M. Brune, Jordan Michael Christian & Emily N. Janikowski on
On November 22, the Securities and Exchange Commission announced its enforcement results for the 2024 fiscal year with a record $8.2 billion in financial remedies.[1] At the same time, a few cases and sweeps comprised the vast bulk of that amount, and the number of cases brought dropped by 26%. In a press release announcing the results, Acting Enforcement Director Sanjay Wadhwa touted the agency’s “high impact enforcement actions” and noted “stepped up efforts” by market participants to self-report their own potential wrongdoing, cooperate in SEC investigations, and remediate any shortcomings. Chair Gary Gensler, who recently announced he will step down at the start of the next Trump presidency, described the Enforcement Division as a “steadfast cop on the beat.” Set forth below are key highlights on enforcement trends from the past year, as well as predictions for what the next year may hold under a new administration.
Continue Reading SEC FY 2024 Enforcement Results: Record Dollars But Many Fewer CasesDOJ Antitrust Creates Guidance for Evaluating Antitrust Compliance Programs
On November 14, 2024, the U.S. Department of Justice (“DOJ”) Antitrust Division (the “Division”) released guidance for the Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations (the “Guidance”). The Guidance will be used by the Division in assessing the adequacy and effectiveness of a company’s antitrust compliance program when making a charging or resolution decision.[1]
Continue Reading DOJ Antitrust Creates Guidance for Evaluating Antitrust Compliance ProgramsSEC Charges Four Companies Impacted by Data Breach with Misleading Cyber Disclosures
On October 22, 2024, the SEC announced settled enforcement actions charging four companies with making materially misleading disclosures regarding cybersecurity risks and intrusions. These cases mark the first to bring charges against companies who were downstream victims of the well-known cyber-attack on software company SolarWinds. The four companies were providers of IT services and digital communications products and settled the charges for amounts ranging from $990,000 to $4 million.
Continue Reading SEC Charges Four Companies Impacted by Data Breach with Misleading Cyber DisclosuresClearing Agency Participants Take Note: Covered Clearing Agency Resilience Rules Could Bring New Margin Requirements
By James R. Burns, Brant Brown & Ben Rosenblum on
On October 25, 2024, the Securities and Exchange Commission (“SEC”) adopted amendments to certain rules in the Covered Clearing Agency Standards (the “Amendments”) aimed at improving risk management and resilience of covered clearing agencies (“CCAs”). Although not directly relevant to firms who are participants in one of the clearing agencies, the amendments could result in changes to margin requirements imposed by clearing agencies. The Amendments:
Continue Reading Clearing Agency Participants Take Note: Covered Clearing Agency Resilience Rules Could Bring New Margin RequirementsSEC 2025 Exam Priorities: Private Funds, Cyber, Crypto, and New Rule Compliance
Posted in Cybersecurity, SEC Guidance
The U.S. Securities and Exchange Commission (“SEC”) Division of Examinations (the “Division”) released its 2025 examination priorities on October 21, 2024 (the “2025 Priorities”). The 2025 Priorities highlight a wide range of topics for entities subject to SEC examinations, particularly investment advisers and broker-dealers. The topics should be very familiar, as they largely continue recent focus areas for not only the Examinations Division but also the Enforcement Division.
Continue Reading SEC 2025 Exam Priorities: Private Funds, Cyber, Crypto, and New Rule ComplianceDOJ Announces Revisions to Compliance Guidance Focused on AI, Whistleblower Reporting, and Other Areas
September 23, 2024, Principal Deputy Assistant Attorney General Nicole M. Argentieri announced revisions to the Department of Justice (“DOJ”), Criminal Division’s compliance guidance, known as the Evaluation of Corporate Compliance Programs (“ECCP”), which is used by DOJ prosecutors to assess the effectiveness of a company’s compliance program in the context of a corporate investigation.[1] The updated compliance guidance incorporates changes that will focus on a company’s use of Artificial Intelligence (“AI”)[2] and other technologies, its use of data analytics as part of the compliance function, the incorporation of “lessons learned” to continuously enhance corporate compliance programs, and whistleblower reporting.[3]
Continue Reading DOJ Announces Revisions to Compliance Guidance Focused on AI, Whistleblower Reporting, and Other AreasThe Next Market Structure Rule Arrives: SEC Adopts New Minimum Pricing Increments and Access Fee Caps
By James R. Burns, Brant Brown, Ben Rosenblum & Anna Bintinger on
On September 18, 2024, the Securities Exchange Commission (“SEC”) unanimously adopted new rules amending Regulation NMS (the “Amendments”). The Amendments (1) establish new minimum pricing increments (or “tick sizes”) for certain stocks priced above $1.00, (2) establish a new maximum fee for access to quotations, and require that all such fees be calculable as of the transaction date, and (3) accelerate the implementation of operational amendments to the “round lot” and “odd-lot information” definitions previously adopted to harmonize with the adopted NMS amendments.
Continue Reading The Next Market Structure Rule Arrives: SEC Adopts New Minimum Pricing Increments and Access Fee Caps