Congressional and Agency Debates
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DOJ Announces Shift in Approach to Prosecuting Corporate Crime05.16/Alert
On May 12, 2025, the Criminal Division of the U.S. Department of Justice issued a Memorandum outlining its new approach to white-collar criminal enforcement under the second Trump administration. Observing that “overbroad and unchecked corporate and white-collar enforcement burdens U.S. business and harms U.S. interests,” the Memorandum represents a notable shift in the Department’s tone.
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EDGAR Next Implements Significant System Updates05.15/Alert
Background On September 27, 2024, the Securities and Exchange Commission (SEC) adopted changes to the SEC’s Electronic Data Gathering, Analysis and Retrieval (EDGAR) system intended to modernize the EDGAR system by improving security measures, enhancing filers’ ability to manage their EDGAR accounts and more (collectively referred to as EDGAR Next). The new rules and form amendments became effective March 24, 2025, and will:
• update the EDGAR Filer Manual.
• amend Regulation S-T Rules 10 and 11, and Form ID; and -
847 Awaiting Takeoff: DCSA Issues Guidance on Expanded Scope of FOCI Assessments05.13/Alert
Section 847 of the National Defense Authorization Act for FY 2020 directs the Department of Defense (DoD) to move forward with proposing a new Defense Federal Acquisition Regulation Supplement (DFARS) rule that would expand the scope of companies subject to its foreign ownership, control, and influence (FOCI) evaluations. The anticipated DFARS rule would require bidders and subcontractors participating in DoD contracts valued at over $5 million, subject to certain exceptions, to disclose FOCI details during the bid or proposal stage and update those details when changes to their ownership structure that implicate FOCI concerns occur. Per guidance issued by the Defense Counterintelligence and Security Agency (DCSA), the rule is expected to be published within the next 12 to 18 months.
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Navigating Recent Government Contract Terminations—Key Considerations and Best Practices05.09/Alert
Contracting Officer’s Discretion and Legal Boundaries
The federal government possesses broad authority to terminate contracts for the government’s convenience under Federal Acquisition Regulation (FAR) 52.249-2. This rule, however, does not excuse bad faith or animus-driven terminations. It also does not mean that any government official can terminate a contract or a series of contracts for reasons of efficiency. The Court of Claims in Torncello v. United States, 681 F.2d 756 (Ct. Cl. 1982), emphasized that terminations must not be executed in bad faith or to secure a better deal elsewhere. Similarly, in Krygoski Construction Co. v. United States, 94 F.3d 1537 (Fed. Cir. 1996), the Federal Circuit held that terminations motivated by bad faith or abuse of discretion constitute a breach of contract. Of course, it is important to note that the discretion to terminate under FAR 52.249-2 belongs to the Contracting Officer and not the government more broadly. -
Global Capability Centers in 2025: Key Legal and Strategic Considerations05.07/Alert
Global Capability Centers (GCCs) have become strategic hubs for multinational corporations, financial institutions and other organizations because they can provide centralized control over high-value technology and back-office functions.
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Executive Order on Accreditation and Injunctions of Dear Colleague Letter Impact DEI in Higher Education05.07/Alert
On April 23, 2025, President Trump issued Executive Order 14279 (EO) directing the Secretary of Education (the “Secretary”) to “hold accountable” higher education accreditors that “engage in unlawful discrimination in accreditation-related activity under the guise of ‘diversity, equity, and inclusion’ initiatives.” Accreditation is a process where an independent accrediting agency evaluates a school or program to ensure it meets certain educational standards. The EO asserts that “accreditors have remained improperly focused on compelling adoption of discriminatory ideology, rather than on student outcomes” and sets out criteria for the Secretary to potentially remove recognition from accrediting bodies.
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The Ironic Impact of FinCEN’s New CTA Regulations on New York’s LLC Transparency Act05.05/Alert
The NYS LLC Transparency Act (the “New York Act”) became law in January 2024 and takes effect on January 1, 2026. When in effect, it would require limited liability companies formed or qualified to do business in New York to report their beneficial ownership to a database to be created and administered by the New York Secretary of State.
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Comparing Developments in U.S. and EU Strategies to Combat Forced Labor05.01/Alert
In recent years, a multinational focus on preventing forced labor within supply chains has shaped due diligence requirements for companies worldwide. Recent changes to global policies and potential shifts in enforcement appetite are set to reshape these requirements once again.
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DOJ Releases Its Data Security Program Compliance Guide04.23/Alert
On January 8, 2025, the U.S. Department of Justice (DOJ) issued its final rule (28 C.F.R. Part 202) implementing former President Biden’s Executive Order 14117 (Order), “Preventing Access to Americans’ Bulk Sensitive Personal Data and United States Government-Related Data by Countries of Concern.” The Order and final rule create the Data Security Program (DSP), which provides for restrictions or prohibitions on access to U.S. government-related data and Americans’ bulk sensitive data by specified countries of concern or covered persons. The regulations largely took effect on April 8, 2025, but additional affirmative compliance requirements for U.S. persons will take effect on October 6, 2025.
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CTA Deadline Approaching for Foreign Reporting Companies04.18/Alert
The Corporate Transparency Act (CTA) was adopted by Congress in January 2021 and became effective on January 1, 2024. Under the CTA and the initial regulations implementing it, “reporting companies” (corporations, LLCs, limited partnerships, some trusts, and certain other entities formed or first registered (i.e., qualified) to do business in the United States, its states or territories) were required to file information as to their “beneficial owners” in a non-public database managed by the Financial Crimes Enforcement Network (FinCEN), part of the U.S. Department of the Treasury. Reporting companies created or (if foreign) first registered in or after 2024 were required to file starting January 1, 2024. Reporting companies created or (if foreign) first registered prior to January 1, 2024, were initially required to file starting January 1, 2025. The CTA and regulations exempt numerous entities from being reporting companies subject to the strictures of the CTA.
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California SB 813 Proposes Landmark Safe Harbor for AI Development Through Certification04.17/Alert
California Senate Bill 813, authored by Senator Jerry McNerney, a former four-term member of the U.S. House of Representatives and author of the federal “AI in Government Act,” proposes the establishment of Multistakeholder Regulatory Organizations (MROs)—private entities which would be designated by the California Attorney General to certify the safety and compliance of AI models and applications. These certifications would serve not only as new governance benchmarks but also provide developers with a powerful affirmative defense against civil liability in certain legal claims.
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The EU’s Cyber Resilience Act: New Cybersecurity Requirements for Connected Products and Software04.15/Alert
The EU has adopted Regulation (EU) 2024/2847 (Cyber Resilience Act or CRA), which introduces new cybersecurity requirements for connected products, software and their remote data processing solutions. The CRA entered into force on December 10, 2024, and its main obligations will apply from December 11, 2027. From this date, “products with digital elements” (including hardware, software and supporting services) that do not comply with the CRA’s requirements cannot be sold in the EU.
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Supreme Court Issues New RICO Decision04.14/Alert
On April 2, 2025, the Supreme Court issued a decision in Medical Marijuana, Inc. v. Horn, resolving a circuit split as to whether a plaintiff may recover damages under RICO for business or property harm that derives from a personal injury.
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Share Transfer Tripwire: Some Hidden Risks in Deed of Adherence Clauses04.11/Alert
Certain provisions commonly found in joint venture and shareholder documentation for early-stage and investment companies are so ubiquitous that they are often accepted without negotiation or full consideration of their wider implications. One such clause, frequently included in the articles of association of English early-stage companies, provides that if a person wishes to transfer shares to a party not already bound by the existing shareholders’ agreement (SHA), then the transferor must ensure that the transferee executes a deed of adherence agreeing to be bound by the SHA (Deed of Adherence) as a condition of the transfer.
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U.S. Department of Justice Curtails “Regulation by Prosecution” in Digital Asset Enforcement04.10/Alert
What the New Policy Says
On April 7, 2025, Deputy Attorney General Todd Blanche issued a Memorandum titled, “Ending Regulation by Prosecution,” which outlines changes to the approach of the U.S. Department of Justice (DOJ) to digital assets and criminal enforcement. The stated goal of the Memorandum, which implements Executive Order 14178 (Strengthening American Leadership in Digital Financial Technology), is to effectuate President Trump’s directive that DOJ “end the regulatory weaponization against digital assets.” -
Lashify v ITC: The Federal Circuit Redefines the Domestic Industry Requirement04.08/Alert
Complainant Lashify, Inc. appealed an adverse decision by the U.S. International Trade Commission (Commission) which found that Lashify failed to satisfy the economic prong of the domestic industry requirement with respect to three asserted patents. In the underlying investigation, the presiding Administrative Law Judge “excluded expenses relating to sales, marketing, warehousing, quality control, and distribution.” Lashify, Inc. v. Int'l Trade Comm'n, 130 F.4th 948, 955 (Fed. Cir. 2025). On review, the Commission majority agreed, reasoning that it “‘is well settled that sales and marketing activities alone cannot satisfy the domestic industry requirement’” and that “expenses relating to warehousing, quality control, and distribution … are akin to those incurred by mere importers.”
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U.S. Department of Energy Reopens Funding Initiative for Gen III+ Small Modular Reactors with Key Modifications Reflecting Trump Administration Priorities04.07/Alert
On March 24, 2025, the U.S. Department of Energy (DOE) reopened its funding initiative for Generation III+ Small Modular Reactors (Gen III+ SMRs) with modifications aligned with the Trump administration’s policy priorities and energy policy objectives. The modified funding initiative focuses on regulatory streamlining, deregulation and the acceleration of energy infrastructure, while deprioritizing community-based initiatives. As part of this shift, DOE has removed requirements related to community engagement and workforce equity and clarified that award selection will be based solely on technical merit.
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Trump Launches $1 Billion Plus Investment Fast Track with New Executive Order04.04/Alert
Against the backdrop of rising global competition and ongoing industrial policy debates, on March 31, 2025, President Trump signed Executive Order (EO) 14255, “Establishing the United States Investment Accelerator,” aimed at encouraging large-scale domestic and foreign investment.
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EPA Announces Sweeping Deregulatory Agenda: The Complete Set of EPA’s 31 Actions and Affected Environmental Regulations04.03/Alert
In what it called “the greatest and most consequential day of deregulation in U.S. history,” the Environmental Protection Agency (EPA) announced its most expansive deregulatory initiative to date on March 12, 2025. Through a series of press releases and a public address by Administrator Lee Zeldin, the agency outlined 31 planned actions aimed at rescinding, revising or reconsidering existing environmental rules and policies. Each of the press releases, as well as the underlying regulations at issue, are linked below.
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SEC Ends Its Climate-Related Disclosure Requirements04.01/Alert
On March 6, 2024, the Securities and Exchange Commission (SEC) adopted final rules imposing new climate-related disclosure requirements on domestic and foreign registrants with respect to their annual reports and registration statements (Rules). Compliance was set to begin as early as the annual reports for December 31, 2025, for calendar-year-end issuers classified as large-accelerated filers.
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New Federal Anti-Hazing Requirements for College Campuses03.19/Alert
Collection of Data Regarding “Hazing Incidents”: January 1, 2025
The federal “Stop Campus Hazing Act” (the Act) amends a subsection of the Clery Act by expanding the annual security report (ASR) reporting requirements and requiring covered colleges and universities to include statistics of “hazing incidents” which occurred within the school’s Clery geography and were reported to campus securities or local police agencies. -
Forthcoming Enterprise-Wide and Egregious Violations from California’s Division of Occupational Safety and Health03.17/Alert
On March 25, 2025, the California Department of Industrial Relations will hold an advisory committee meeting to solicit input on proposed amendments to Division of Occupational Safety and Health (Cal/OSHA) regulations regarding so-called “enterprise-wide” and “egregious” violations.
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Anti-DEI Executive Orders Are Enforceable, for Now, After Fourth Circuit Lifts Preliminary Injunction03.17/Alert
On March 14, 2025, the U.S. Court of Appeals for the Fourth Circuit granted the Government’s motion for a temporary stay of a district court’s nationwide preliminary injunction against two Executive Orders that target diversity, equity, and inclusion (DEI) initiatives (the Anti-DEI EOs). The stay, in the case NADOHE v. Trump, was granted pending resolution of the Government’s appeal of the preliminary injunction. The order states that the court will set an expedited briefing schedule for that appeal.
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U.S. Bankruptcy Court Confirms Nonconsensual Third-Party Releases May Be Recognized Under Chapter 15 of the Bankruptcy Code03.14/Alert
On June 27, 2024, the U.S. Supreme Court issued a long-awaited ruling regarding the validity of nonconsensual third-party releases in the chapter 11 plan of pharmaceutical company Purdue Pharma. In Harrington v. Purdue Pharma L.P., the Supreme Court held that absent consent from the affected claimants (i.e., holders of more than $40 trillion in mass tort claims), the Bankruptcy Court lacked the power to approve a plan provision releasing Purdue’s founders, the Sackler family, from such alleged liabilities. In reaching that result, the Supreme Court concluded that nonconsensual third-party releases fall outside the scope of section 1123(b) of the Bankruptcy Code, which limits the types of provisions a bankruptcy plan may include. It also reasoned that nonconsensual third-party releases contravene section 1141(d), which provides a “discharge” from liability only to a “debtor.”
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U.S. Bankruptcy Court Agrees to Enforce English Three-Step, with Third-Party Releases, Used by Mexican Auto Financer03.10/Alert
On February 24, 2025, U.S. Bankruptcy Judge Michael E. Wiles granted “recognition” of an English insolvency proceeding and enforced an order approving an English scheme of arrangement for a new shell entity created in England by its Mexican parent solely to effectuate an English restructuring that provides consensual and non-consensual third-party releases of the Mexican parent company, even though the new entity had little connection with England. In re Mega NewCo Limited, No. 24-12031 (MEW), 2025 WL 601463 (Bankr. S.D.N.Y. Feb. 24, 2025) (“in light of the support of all of the affected parties and their overwhelming consent to the English Scheme Proceeding and the approval of the Scheme of Arrangement, and the other factors that I have cited, I see no cause in this particular case to look past the form of the transactions or to pursue theoretical issues that no affected party wishes to pursue”).
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Council on Environmental Quality Rescinds NEPA Regulations03.07/Alert
As was widely anticipated, the Council on Environmental Quality (CEQ) recently rescinded its National Environmental Policy Act (NEPA) implementing regulations, eliminating the uniform framework that has governed NEPA compliance for decades. CEQ’s Interim Final Rule, published on February 25, 2025, removes 40 C.F.R. Parts 1500–1508 from the Code of Federal Regulations, dismantling longstanding procedural requirements for federal environmental reviews.
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Second Circuit Affirms Priority Payment of Broker Fees Included in Aircraft Leases Utilizing the “Billing-Date Approach” Under Bankruptcy Code § 365(d)(5)02.26/Alert
Airlines will always need access to new aircraft to expand and replace their fleets. When an airline utilizes an intermediary, such as a broker, it must pay a commission to lease or purchase aircraft. Depending on the number of aircraft obtained, commissions may be very expensive, necessitating payments over time. But what happens if the airline files for bankruptcy before paying out the commissions? If not properly structured to be included as part of the lease payments, the broker may be left with an unsecured claim which may be paid with pennies on the dollar. However, if the fees are included as part of the rent under the lease, they may qualify as priority claims, until the lease is rejected.
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Challenging Trump 2.0 En Masse Contract Terminations02.24/Alert
In recent weeks, the second Trump administration has begun en masse terminations of federal contracts for the government’s convenience-as-a-budget-cutting tactic. Contractors with the U.S. Agency for International Development have been most affected by this tactic, where the vast majority of the agency’s contracts have been terminated.
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Reshaped Priorities: Navigating Changes to FCPA and FARA Enforcement02.13/Alert
On February 10, 2025, President Donald Trump signed an Executive Order directing the Department of Justice (DOJ) to pause enforcement of the U.S. Foreign Corrupt Practices Act (FCPA), citing concerns over the competitive disadvantage that it imposes on U.S. businesses. Just days earlier, Attorney General Pam Bondi issued a memorandum signaling a narrowing of DOJ enforcement priorities with respect to the FCPA and Foreign Agents Registration Act (FARA). This alert provides an overview of the current state of FCPA and FARA enforcement, discussing the compliance implications of new DOJ policy for companies engaged in cross-border trade.
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California Governor Releases 2025 Budget Proposal to Move Banks and Financial Corporations to Single-Sales-Factor Apportionment02.13/Alert
On January 10, 2025, California Governor Gavin Newsom released his January Budget Proposal for the 2025 – 2026 fiscal year. Notably, Governor Newsom’s budget would increase tax revenue by requiring banks and financial corporations to move from an equally weighted three-factor formula, comprising property, payroll and sales factors, to a single-sales-factor formula for purposes of apportioning income to the state. Agricultural and extractive businesses would continue to use the three-factor formula. The proposed change would take effect immediately, beginning with tax year 2025. A copy of the trailer bill is available here.
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EPA Finalizes New Rule to Reduce and Reclaim Hydrofluorocarbons02.11/Alert
Prior to the Biden administration leaving office, EPA finalized another rule in its continued push to phase down the use of hydrofluorocarbons (HFCs) by issuing a final rule on October 11, 2024, to establish the HFC Emissions Reduction and Reclamation (ER&R) program. EPA’s new rule, discussed in more detail below, will significantly impact industries that rely heavily on commercial-scale refrigeration systems. Further, companies with facilities that rely on older systems may require more frequent equipment repair or replacement to comply with the rule.
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IRS Proposes New Rules to Implement the Expanded $1 Million Limit on Deductible Pay for Publicly Held Corporations01.31/Alert
Background
Section 162(m) of the Internal Revenue Code of 1986, as amended (Section 162(m)), disallows deduction by any publicly held corporation for applicable employee remuneration that is otherwise deductible with respect to any covered employee to the extent that such remuneration for the taxable year exceeds $1 million. The $1 million cap is not indexed for inflation and the limit applies to all publicly held corporations regardless of the corporation’s status as an “emerging growth company” or “smaller reporting company” for purposes of Securities and Exchange Commission (SEC) executive compensation disclosure rules. -
IRS Eases Form 1095-C Burden for Employers01.31/Alert
On December 23, 2024, President Biden signed into law the Paperwork Burden Reduction Act and the Employer Reporting Improvement Act, which together reduce the burden on employers to meet certain requirements under the Affordable Care Act (ACA). These laws specifically impact employers that are required to furnish IRS Forms 1095-B or 1095-C (collectively, “Forms 1095”) to their employees.
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White House Introduces Cyber Trust Mark Program01.29/Alert
Cybersecurity Trust Mark Program: Building Consumer Confidence in Internet of Things (IoT) Security
On January 7, 2025, the White House announced the finalization of its voluntary cybersecurity labeling program for wireless interconnected smart products administered by the Federal Communications Commission (FCC). The White House announcement comes after an 18-month public notice and comment period. The Cyber Trust Mark program seeks to provide consumers with a simple label to assess whether their Internet of Things (IoT) wireless connected devices in their home are cybersecure. -
FHWA Rescinds Longstanding Buy America Waiver for Manufactured Products01.28/Alert
On January 13, 2025, the U.S. Federal Highway Administration (FHWA) issued a final rule terminating a long-standing exception to “Buy America” domestic content requirements for manufactured products used in agency-funded projects.
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New ASTM Standard Aims to Facilitate Assessing Climate Risk and Resilience Considerations01.28/Alert
Owners, lenders and investors in real property have long relied on ASTM E 1527-21, a product of ASTM International, in connection with Phase I Environmental Site Assessments. This product is used to establish that “all appropriate inquiries,” as defined at 42 CFR § 9601(35)(B) and 40 CFR § 312.20(a), have been met in connection with a property. As a matter of law, the performance of an ASTM-compliant Phase I ESA enables prospective purchasers and lessees to satisfy one of the criteria for statutory protections against liability for pre-existing environmental conditions under the Comprehensive Environmental Response, Compensation, and Liability Act. It also constitutes an indicia that appropriate environmental due diligence has been performed regarding the property.