Richard Manfredi, Author at Gibson Dunn

From the Derivatives Practice Group: This week, the CFTC published a Notice of Proposed Rulemaking seeking public comments on proposed amendments to remove the order book requirement for swap execution facilities.

New Developments

CFTC Seeks Public Comments on Proposed Elimination of SEF Order Book Requirement for Permitted Transactions. On August 20, the CFTC published a Notice of Proposed Rulemaking seeking public comments on proposed amendments to Commission regulation § 37.3(a)(2) to remove the order book requirement allowing swap execution facilities (SEFs) not to offer an order book for permitted transactions. The proposed elimination of the order book requirement for permitted transactions provides SEFs with the flexibility to determine how to allocate their resources, while also potentially helping to spur further development and innovation in execution methods that may be better suited to trading the products that SEFs list. [NEW]

CFTC Requests Comment on the Listing of Compute Derivatives Contracts. On August 19, the CFTC issued a request for comment to better inform its understanding and oversight of derivatives markets in compute. This request seeks comment on the size, liquidity, and other considerations with respect to compute cash markets, market oversight and manipulation concerns, customer protection, and perpetual compute futures. [NEW]

CFTC Resolves Actions Against Former Alameda CEO, and Alameda and FTX Co-Founder. On August 19, the CFTC announced the U.S. District Court for the Southern District of New York entered supplemental consent orders against Caroline Ellison, former Alameda CEO, and Gary Wang, former Alameda and FTX co-founder. The orders require Ellison and Wang to continue cooperating with the Commission, impose a five-year trading ban and a 10-year registration ban on Ellison, and impose a five-year trading ban and an eight-year registration ban on Wang. [NEW]

CFTC Seeks Public Comment on Proposed Rule Changes for Commodity Pool Operator and Commodity Trading Advisor Registration. On August 18, the CFTC published a Notice of Proposed Rulemaking seeking public comments on amendments to part 4 of the CFTC’s regulations. These amendments address registration requirements for commodity pool operators and commodity trading advisors, and the proposed rule aims to reduce duplicative and overlapping regulation. [NEW]

Chairman Selig Announces Agenda for August 20 Innovation Advisory Committee Meeting in Washington. On August 13, CFTC Chairman Michael Selig, sponsor of the Innovation Advisory Committee (IAC), released the agenda for the IAC’s inaugural meeting on Thursday, August 20. Attendees will discuss topics related to the regulation of crypto assets, artificial intelligence, and prediction markets. View the full agenda here.

CFTC Releases Advisory on Self-Certification of Incentive Programs for Prediction Markets. On August 12, the CFTC’s Division of Market Oversight issued an advisory reminding designated contract markets of their regulatory obligations when submitting self-certifications for market-maker, liquidity, trading, or incentive programs under CFTC Regulations 40.5 and 40.6. This advisory addresses concerns regarding an increasing number of incentive‑program rule filings submitted under CFTC Regulation 40.6(a)—particularly those relating to event contract products—that contain procedural or substantive deficiencies.

New Developments Outside the U.S.

ESMA Consults on Reporting Framework for Clearing Activity at Recognized Third-Country CCPs. On August 18, ESMA launched a consultation on a proposed annual reporting framework for clearing activity at recognized third-country central counterparties (CCPs) aimed at improving supervisory visibility of EU firms’ exposures to such CCPs. The consultation paper sets out ESMA’s proposed Regulatory Technical Standards and Implementing Technical Standards under the European Market Infrastructure Regulation. [NEW]

ESMA Confirms Go-live for Weekly Commodity Derivatives Position Reporting. On August 14, ESMA announces that the new weekly commodity derivatives position reporting framework will go live on September 3, 2026. From this date, market participants will be required to submit weekly position reports in accordance with the updated requirements, technical specifications and validation rules introduced by XML schema version v2.0.

New Industry-Led Developments

ISDA Responds to FASB Hedge Accounting Guidance. On August 14, ISDA responded to an exposure draft from the Financial Accounting Standards Board (FASB). ISDA states that it broadly supports the FASB’s proposed targeted improvements to hedge accounting, including allowing interest rate hedging of held-to-maturity debt securities, recognizing all Secured Overnight Refinancing Rate tenors as benchmark rates and permitting certain cross-currency swaps different reset dates in net investment hedges. [NEW]

ISDA, AFME Respond to EBA on Taxonomy Disclosures Delegated Act. On August 12, ISDA and the Association for Financial Markets in Europe (AFME) responded to the European Banking Authority’s discussion paper on certain taxonomy key performance indicators (KPIs) and other aspects of the Disclosures Delegated Act under Article 8 of the Taxonomy Regulation. The associations stated that they support the European Commission’s ongoing efforts to simplify the EU Taxonomy reporting framework and caution against the introduction of additional KPIs in the absence of clear use cases or demonstrated investor demand.

ISDA Responds to JSCC Consultation on Clearing Fund Consolidation. On August 12, ISDA responded to the Japan Securities Clearing Corporation’s (JSCC) consultation on its proposal to consolidate clearing fund consumption, calculation and deposit segmentation across six clearing qualifications under the Financial Instruments and Exchange Act. ISDA members broadly support the JSCC’s objective to achieve greater capital efficiency, diversification benefit, and operational simplicity consistent with default fund frameworks at other major central counterparties.

The following Gibson Dunn attorneys assisted in preparing this update: Jeffrey Steiner, Adam Lapidus, Hayden McGovern, Karin Thrasher, and Alice Wang.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. Please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm’s Derivatives practice group, or the following practice leaders and authors:

Jeffrey L. Steiner, Washington, D.C. (202.887.3632, jsteiner@gibsondunn.com)

Michael D. Bopp, Washington, D.C. (202.955.8256, mbopp@gibsondunn.com)

Michelle M. Kirschner, London (+44 (0)20 7071.4212, mkirschner@gibsondunn.com)

Darius Mehraban, New York (212.351.2428, dmehraban@gibsondunn.com)

Jason J. Cabral, New York (212.351.6267, jcabral@gibsondunn.com)

Adam Lapidus, New York (212.351.3869, alapidus@gibsondunn.com )

Stephanie L. Brooker, Washington, D.C. (202.887.3502, sbrooker@gibsondunn.com)

William R. Hallatt, Hong Kong (+852 2214 3836, whallatt@gibsondunn.com )

David P. Burns, Washington, D.C. (202.887.3786, dburns@gibsondunn.com)

Marc Aaron Takagaki, New York (212.351.4028, mtakagaki@gibsondunn.com)

Hayden K. McGovern, Dallas (202.887.3569, hmcgovern@gibsondunn.com)

Karin Thrasher, Washington, D.C. (202.887.3712, kthrasher@gibsondunn.com)

Alice Yiqian Wang, Washington, D.C. (202.777.9587, awang@gibsondunn.com)

Attorney Advertising: These materials were prepared for general informational purposes only based on information available at the time of publication and are not intended as, do not constitute, and should not be relied upon as, legal advice or a legal opinion on any specific facts or circumstances. Gibson Dunn (and its affiliates, attorneys, and employees) shall not have any liability in connection with any use of these materials. The sharing of these materials does not establish an attorney-client relationship with the recipient and should not be relied upon as an alternative for advice from qualified counsel. Please note that facts and circumstances may vary, and prior results do not guarantee a similar outcome.

This new division––the National Fraud Enforcement Division or Fraud Division––represents the first significant new DOJ component since the creation of the National Security Division in 2006, and it will have lasting effect on federal criminal law enforcement.

When Vice President J.D. Vance announced the creation of a new, dedicated anti-fraud office in January 2026, commentators immediately raised a series of questions about the intent, scope, and authority of the then-inchoate office. On August 18, 2026, the U.S. Department of Justice (DOJ) published a final rule laying to rest many of those questions and officially conferring authority on this new prosecuting office, the National Fraud Enforcement Division. The Fraud Division represents the first significant new DOJ component since the creation of the National Security Division in 2006, and it will have lasting effect on federal criminal law enforcement.

The rule, which takes effect on August 24, 2026, caps a process that began with the White House’s January 2026 announcement of the Fraud Division’s creation.[1] In March 2026, the Senate confirmed Colin M. McDonald as the Assistant Attorney General overseeing the Fraud Division. Following McDonald’s confirmation, then-Acting Attorney General Todd Blanche issued an April 7, 2026 memorandum (Blanche Memo)[2] to formally direct the Fraud Division’s creation—including by directing the transfer of over 150 prosecutors from the Criminal Division to the Fraud Division and setting timelines for further actions related to the establishment of the Fraud Division. McDonald followed with an August 13, 2026 memorandum, outlining the Fraud Division’s enforcement priorities (McDonald Memo).[3] Until the August 18 rule publication, however, the precise contours of the Fraud Division’s prosecutorial mandate within DOJ remained the subject of speculation.

The August 18 final rule provides welcome clarity on this topic. It describes the Fraud Division’s mandate to “investigat[e] and prosecut[e] fraud against taxpayer dollars and taxpayer-funded programs”[4] and pairs that mandate with catch-all provisions that allow the remit to grow further, thus underscoring the central role that the Fraud Division will play in advancing the Administration’s criminal enforcement priorities. What the rule does not resolve is how that authority will be divided in practice, because it leaves the Fraud Division and the Criminal Division with concurrent jurisdiction over many fraud offenses. Additionally, the rule does not clarify the role of Main Justice components, including the Fraud Division, vis-à-vis U.S. Attorneys’ Offices, although we anticipate the division of responsibilities will continue alongside the lines established by the Criminal Division and U.S. Attorneys’ Offices where there has been shared jurisdiction.

Below, we discuss what the rule resolves, what it leaves open, and the practical implications for companies and individuals.

The Rule’s Allocation of Prosecutorial Authority

The rule – which amends 28 C.F.R. Section 0.70 – grants the Fraud Division jurisdiction over six enumerated enforcement areas:

Criminal Frauds. Criminal fraud offenses generally, aside from conspiracy matters assigned to the Antitrust Division, will now be under the Fraud Division’s authority. The amended rule leaves overlapping the Fraud Division and Criminal Division enforcement authority over fraud prosecutions generally, except for tax fraud and health plan fraud, which the rule assigns exclusively to the Fraud Division.[5]
Criminal Tax. All criminal proceedings under the internal revenue laws now fall under the exclusive purview of the Fraud Division, completing the migration of criminal tax enforcement that began in December 2025 with the dissolution of the Tax Division.[6]
Trade Fraud. Criminal proceedings related to trade fraud matters, including schemes involving imported goods, customs duties, tariffs, and foreign commerce, are now part of the Fraud Division’s authority.[7] As with other non-tax, non-health plan fraud categories, trade fraud authority now spans both the Fraud Division and the Criminal Division.
Monies Owed to or Paid by the United States. The rule grants the Fraud Division authority over cases involving money owed to, or paid by, the federal government, capturing procurement fraud, grant fraud, and benefits program fraud.[8]
Health Plan Fraud. Criminal proceedings involving fraud or abuse “with respect to health plans” are within the Fraud Division’s exclusive authority according to the new rule.[9] Notably, the rule does not define “fraud with respect to health plans,” nor offer an explanation on how it differs from health care fraud, which is highlighted in the McDonald Memo as a priority for the Fraud Division. Although the rule itself does not specifically delineate that all criminal proceedings related to health care fraud (which is broader than health plan fraud) are devolved to the Fraud Division, the rule does dissolve the Criminal Division’s jurisdiction over such cases.[10] The full carve-out of health plan cases, combined with the sharing of health care fraud cases, is likely to prompt debate about where the line between the two categories should be drawn–especially because the Fraud Division has made Medicare and Medicaid fraud a prominent enforcement focus, including through recent nationwide and Minnesota-specific takedowns.[11]
Controlled Substances Offenses. The rule grants the Fraud Division authority over criminal proceedings related to Controlled Substances Act offenses, including schemes involving the diversion or unlawful distribution of controlled substances.[12] The rule expressly modifies the Criminal Division’s controlled-substances authority to make it non-exclusive, “such that the [the Fraud Division] may bring such charges where authorized to do so.”[13]

Catch-All or “Elastic” Provisions

Beyond the assignment of enumerated enforcement areas to the Fraud Division, the rule grants the Fraud Division the sweeping authority, in any proceeding under its stated jurisdiction, to prosecute any federal crime it discovers during an investigation in one of the enumerated areas.[14]

This provision could have significant implications for the Fraud Division’s ability to operate independently of other DOJ components. Under the rule, the Fraud Division can in theory pursue, for example, child pornography or other computer-related offenses if it identifies those in the course of executing search warrants on the computer of a fraud-related investigation target. For companies facing the Fraud Division investigations, that means a single set of prosecutors can expand an inquiry into adjacent conduct without a required referral to other DOJ components—a step that previously created a natural checkpoint and an opportunity to argue the investigation’s scope. Questions remain, however, about how the Fraud Division will deconflict matters that would ordinarily be handled by other DOJ components. The Department’s components have typically coordinated investigations in the past when a need arises for expertise in multiple subject matter areas, and that practice could serve as a baseline for the Fraud Division’s own practices. Some of these questions surrounding deconfliction may eventually be answered through practice or even through revisions to the Justice Manual (the internal DOJ rulebook).

Additionally, the rule allows the Attorney General or the Deputy Attorney General to assign the Fraud Division any case or category of cases, “notwithstanding any other provision” of the rules governing the organization of DOJ, and assign the Fraud Division any other duties or functions in the same manner.[15] The Fraud Division’s substantive remit will therefore track the assignment decisions of DOJ leadership, and may extend well beyond the six enumerated areas. Additionally, the Fraud Division can take on any case by agreement with the Assistant Attorney General for the DOJ division that otherwise has authority over the case, which could permit transfer of cases from one component to another without the need for formal assignment by the Attorney General or the DAG.[16] How this flexibility is deployed will become clear only as future assignments accumulate.

Changes to the Process of Fraud Prosecutions

In addition to laying out the Fraud Division’s substantive focus areas, the rule and related guidance specify the process by which the Fraud Division’s authority will be exercised and its prosecutions conducted:

U.S. Attorneys’ Offices. The Blanche Memo directs each of the 93 U.S. Attorneys’ Offices to place a detailee within the Fraud Division and gives each U.S. Attorney’s Office and FBI field office additional resources for Fraud Division-focused work.[17]
National Fraud Detection Center. The Fraud Division will house a National Fraud Detection Center, a multi-agency, data-driven operation intended to identify fraud through analytics, in coordination with the Task Force to Eliminate Fraud, established by Executive Order 14395. The August 13 McDonald Memo indicated that prosecutors will “deploy the full arsenal of criminal tax tools paired with data analytics, financial forensics, and nationwide coordination,” and the rule directs The Fraud Division to fulfill its mission “using advanced, data-driven investigative techniques.”[18]
Special Grand Jury Authority. The Fraud Division’s Assistant Attorney General may now certify under 18 U.S.C. 3331 that criminal activity in a district necessitates a special grand jury,[19] which is a grand jury that can serve longer than 18 months and also has the ability to publish a report following its investigation.[20]

Key Areas to Watch

Several dynamics warrant tracking as The Fraud Division becomes fully operational and carries out its mandate:

Justice Manual revisions. DOJ has not yet publicly announced specific revisions to the Justice Manual. Nevertheless, the Blanche Memo directed the Office of Legal Policy, following the Department’s Fraud Division “realignment determination,” to review the Justice Manual and related DOJ guidance for updates, and to submit any recommended changes for prompt action.[21] Clients should monitor forthcoming Justice Manual revisions for revised guidance on the Fraud Division’s enforcement priorities, expectations, and possibly deconfliction.
Continued evolution of the interplay between the Fraud Division and the Criminal Division. The rule redraws the jurisdictional lines between the Fraud Division and the Criminal Division in ways that seem on paper to be clear, but concurrent authority over most fraud means the operative boundary will be set by practice, not text. Particularly in areas where the two divisions retain concurrent authority, such as general fraud and controlled-substances cases, the overlap may produce parallel investigations, case-by-case allocation, potential disagreements between different DOJ components, or some combination of the above. Companies and individuals thus may face two sets of prosecutors with an interest in the same conduct before either resolves its position. The Criminal Division’s Fraud Section also has recently been named the White Collar and Corporate Enforcement Section, possibly suggesting its remaining focus will tilt toward corporate conduct outside of the Fraud Division’s fraud mandate.[22] Notably, the reorganization maintained the FCPA Unit and kept its present leadership structure intact, potentially indicating that FCPA enforcement will continue along the guidelines announced in then-Deputy Attorney General Blanche’s Memorandum dated June 2025 (see here for prior Gibson Dunn alerts on this topic).[23]
Impact on voluntary self-disclosure. the Fraud Division falls under the Department-wide Corporate Enforcement Policy (CEP) that DOJ announced earlier this year and that Gibson Dunn covered in a separate client alert. The CEP standardized voluntary self-disclosure requirements across DOJ, but given the broad sweep of investigatory powers granted to the Fraud Division under the new rule, the choice of self-disclosure recipient now carries added meaning. Where the Fraud Division and the Criminal Division have overlapping authority, under the new Corporate Enforcement Policy, both components will be considered appropriate components to which a company can self-disclose. The CEP expressly provides that “disclosure must be made to the appropriate component of the Department,” but clarifies that a “[g]ood faith disclosure to one component where the matter is later brought to another appropriate component for investigation will also qualify.”[24]
Data analytics as an investigative starting point. the Fraud Division’s emphasis on data-driven enforcement may increasingly enable the government to identify potential misconduct before any whistleblower report, voluntary self-disclosure, or other non-government Companies should consider whether their own data-mining capabilities allow them to proactively identify conduct that could attract DOJ scrutiny.
Trade and tariff fraud as a standalone enforcement priority. The express inclusion of trade and tariff fraud gives an area that previously lacked a clear home in DOJ’s organizational regulations a more prominent enforcement footing. That prominence was indeed evident before the rule: in July 2026, the interagency Trade Fraud Task Force published A Resource Guide to Trade Fraud Enforcement, a detailed treatment of customs enforcement authorities, common fraud typologies, and forced labor obligations, co-signed by McDonald.[25] Companies with significant import activity should monitor how broadly the Fraud Division pursues this mandate and consider treating trade compliance as a standing component of their compliance programs—for example, by reassessing trade-related exposure as part of their broader risk priorities rather than leaving it solely to operational or customs-brokerage functions.
Parallel civil proceedings. The Blanche Memo provided for a 120-day period in which DOJ components not initially identified for inclusion in the Fraud Division would be evaluated for inclusion. Given the Fraud Division’s stated prioritization of health care fraud enforcement, there has been speculation whether the Fraud Division would absorb the Fraud Section of the Civil Division’s Commercial Litigation Branch. That section enforces the False Claims Act (FCA), which is the government’s chief civil tool for combating fraud on the government fisc, and the enforcement of which occurs predominantly in the health care space. The new rule leaves FCA enforcement undisturbed (and therefore in the hands of the Civil Division) while transferring sole authority over criminal health plan fraud investigations, and non-exclusive authority over health care fraud matters, to the Fraud Division. This combination of criminal shifts and civil status quo could affect DOJ’s approach to parallel criminal and civil investigations related to both health care and other areas the FCA reaches, such as procurement fraud. One likely result is the need for coordination between the Fraud Division and the Criminal Division on criminal health care enforcement priorities that were previously internal to a single division; another is that an entity resolving with one of the two divisions should not assume that the resolution binds the other. Perhaps more notably, the new rule and the McDonald Memo also suggest that the Fraud Division may become involved earlier and more frequently in matters traditionally handled exclusively by the Civil Division.

[1] The White House, Fact Sheet: President Donald J. Trump Establishes New Department of Justice Division for National Fraud Enforcement (Jan. 8, 2026), https://www.whitehouse.gov/fact-sheets/2026/01/fact-sheet-president-donald-j-trump-establishes-new-department-of-justice-division-for-national-fraud-enforcement/; Memorandum from Todd Blanche, Acting Att’y Gen., U.S. Dep’t of Just., Establishment of the National Fraud Enforcement Division (Apr. 7, 2026) [hereinafter Blanche Memo], https://www.justice.gov/ag/media/1435311/dl?inline.

[2] Blanche Memo, supra note 1.

[3] Memorandum from Colin M. McDonald, Assistant Att’y Gen., Nat’l Fraud Enf’t Div., U.S. Dep’t of Just., The Fraud Division’s Enforcement Priorities (Aug. 13, 2026) [hereinafter McDonald Memo], https://www.justice.gov/opa/media/1457756/dl?inline.

[4] Establishing the National Fraud Enforcement Division, 91 Fed. Reg. 53,357 (Aug. 18, 2026) (to be codified at 28 C.F.R. pt. 0).

[5] 91 Fed. Reg. 53,357 (to be codified at 28 C.F.R. §§ 0.55; 0.70(a)).

[6] 91 Fed. Reg. 53,357 (to be codified at 28 C.F.R. §§ 0.55; 0.70(b)).

[7] 91 Fed. Reg. 53,357 (to be codified at 28 C.F.R. § 0.70(c)).

[8] 91 Fed. Reg. 53,357 (to be codified at 28 C.F.R. § 0.70(d)).

[9] 91 Fed. Reg. 53,357 (to be codified at 28 C.F.R. § 0.70(e)).

[10] 91 Fed. Reg. 53,357 (to be codified at 28 C.F.R. § 0.55).

[11]Press Release, U.S. Dep’t of Just., Minnesota Health Care Fraud Takedown Results in Charges Against 15 Defendants for Over $90M in Fraud (May 21, 2026), https://www.justice.gov/opa/pr/minnesota-health-care-fraud-takedown-results-charges-against-15-defendants-over-90m-fraud; Press Release, U.S. Dep’t of Just., National Health Care Fraud Takedown Results in 455 Defendants Charged in Connection with Over $6.5 Billion in Alleged Fraud (June 23, 2026), https://www.justice.gov/opa/pr/national-health-care-fraud-takedown-results-455-defendants-charged-connection-over-65.

[12] 91 Fed. Reg. 53,357 (to be codified at 28 C.F.R. § 0.70(f)).

[13] 91 Fed. Reg. 53,357 (to be codified at 28 C.F.R. § 0.55).

[14] 91 Fed. Reg. 53,357 (to be codified at 28 C.F.R. §§ 0.70(j)-(k)).

[15] 91 Fed. Reg. 53,357 (to be codified at 28 C.F.R. §§ 0.70(g), (l)).

[16] 91 Fed. Reg. 53,357 (to be codified at 28 C.F.R. § 0.70(h)).

[17] Blanche Memo, supra note 1.

[18] McDonald Memo, supra note 3.

[19] 91 Fed. Reg. 53,357 (to be codified at 28 C.F.R. § 0.71).

[20] 91 Fed. Reg. 53,357 (to be codified at § 0.71; U.S. Dep’t of Just., Criminal Resource Manual §§ 158-59 (2020)).

[21] Blanche Memo, supra note 1.

[22] U.S. Dep’t of Just., Crim. Div., White Collar and Corporate Enforcement (White Collar) Section, https://www.justice.gov/criminal/criminal-white-collar (last visited Aug. 20, 2026).

[23] In a separate, FCPA-specific memorandum issued in June 2025, Deputy Attorney General Blanche directed that “[a]ll current and future investigations and enforcement actions shall be governed by these guidelines and other applicable policies,” suggesting that FCPA enforcement will continue consistent with the priorities laid out in that memorandum. See Memorandum from Todd Blanche, Deputy Att’y Gen., Guidelines for Investigations and Enforcement of the Foreign Corrupt Practices Act (FCPA) (June 9, 2025), https://www.justice.gov/dag/media/1403031/dl.

[24] U.S. Dep’t of Just., Corporate Enforcement and Voluntary Self-Disclosure Policy at 2 n.5 (Mar. 10, 2026), https://www.justice.gov/dag/media/1430731/dl?inline=.

[25] U.S. Dep’t of Just. & U.S. Dep’t of Homeland Sec., Trade Fraud Task Force, A Resource Guide to Trade Fraud Enforcement (July 2026), https://www.justice.gov/fraud/media/1452331/dl?inline.

The following Gibson Dunn lawyers prepared this update: M. Kendall Day, Oleh Vretsona, Amy Feagles, Patrick Stokes, Michael Dziuban, Eleonora Viotto, Allison Frison, and Sarah Burns.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these issues. Please contact the Gibson Dunn lawyer with whom you usually work, any leader or member of the firm’s White Collar Defense & Investigations or Sanctions & Export Enforcement practice groups:

White Collar Defense & Investigations:
Stephanie Brooker – Washington, D.C. (+1 202.887.3502, sbrooker@gibsondunn.com)
Winston Y. Chan – San Francisco (+1 415.393.8362, wchan@gibsondunn.com)
M. Kendall Day – Washington, D.C. (+1 202.955.8220, kday@gibsondunn.com)
Amy Feagles – Washington, D.C. (+1 202.887.3699, afeagles@gibsondunn.com)
Nicola T. Hanna – Los Angeles (+1 213.229.7269, nhanna@gibsondunn.com)
Oleh Vretsona – New York (+1 202.887.3779, ovretsona@gibsondunn.com)
Patrick F. Stokes – Washington, D.C. (+1 202.955.8504, pstokes@gibsondunn.com)
F. Joseph Warin – Washington, D.C. (+1 202.887.3609, fwarin@gibsondunn.com)

Sanctions & Export Enforcement:
Matthew S. Axelrod – Washington, D.C. (+1 202.955.8517, maxelrod@gibsondunn.com)
Adam M. Smith – Washington, D.C. (+1 202.887.3547, asmith@gibsondunn.com)

This update provides an overview of shareholder proposals submitted to public companies during the 2026 proxy season, including statistics and notable developments from the staff (the Staff) of the Securities and Exchange Commission (the SEC) on noaction requests and exclusion notices submitted under Rule 14a-8(j) (together, exclusion requests).

As discussed below, based on the results of the 2026 proxy season, there are several key takeaways to consider for the coming year:

Shareholder proposal submissions fell for the second consecutive year.
The decline in submissions was broad-based: governance was the only category to increase year-over-year, while every other category (social, environmental, civic engagement and executive compensation) fell by roughly a third or more.
The number of exclusion requests dropped sharply under the Staff’s new Rule 14a-8(j) notification framework, but the percentage of proposals excluded ticked up slightly.
Anti-ESG proposals continued to receive low support from shareholders, averaging just 1% support in 2026.
In November 2025, the Staff significantly revised its role in the Rule 14a-8 shareholder proposal process, ending its practice of issuing substantive responses to the vast majority of no-action requests and introducing a new process for proposal exclusion. Without the Staff actively involved in issuing substantive responses, 2026 saw heightened levels of litigation over excluded shareholder proposals.

Shareholder Proposal Developments

The following Gibson Dunn lawyers prepared this update: Aaron Briggs, Elizabeth A. Ising, Julia Lapitskaya, Ronald O. Mueller, Geoffrey E. Walter, Lori Zyskowski, Maggie Valachovic, Victor Twu, Michael Svedman, Andrea Shen, Antony Nguyen, Chris Doherty, Jenny Chen, Olivia Field, Cody Wong, Tom Franck, and Chelsea Werner.

Gibson Dunn’s lawyers are available to assist with any questions you may have regarding these developments. To learn more about these issues, please contact the Gibson Dunn lawyer with whom you usually work, or any of the following lawyers in the firm’s Securities Regulation and Corporate Governance practice group:

Aaron Briggs – San Francisco, CA (+1 415.393.8297, abriggs@gibsondunn.com)
Mellissa Campbell Duru – Washington, D.C. (+1 202.955.8204, mduru@gibsondunn.com)
Elizabeth Ising – Washington, D.C. (+1 202.955.8287, eising@gibsondunn.com)
Thomas J. Kim – Washington, D.C. (+1 202.887.3550, tkim@gibsondunn.com)
Julia Lapitskaya – New York, NY (+1 212-351-2354, jlapitskaya@gibsondunn.com)
Ronald O. Mueller – Washington, D.C. (+1 202-955-8671, rmueller@gibsondunn.com)
Michael Titera – Orange County, CA (+1 949-451-4365, mtitera@gibsondunn.com)
Geoffrey E. Walter – Washington, D.C. (+1 202-887-3749, gwalter@gibsondunn.com)
Lori Zyskowski – New York, NY (+1 212-351-2309, lzyskowski@gibsondunn.com)

Data on Exclusion Requests: For purposes of reporting statistics regarding exclusion requests, references to the 2026 proxy season refer to the period between October 1, 2025, and July 1, 2026. Data regarding no-action letter requests and responses was derived from the information available on the SEC’s website.

Data on Shareholder Proposals: Unless otherwise noted, all data on shareholder proposals submitted, withdrawn and voted on (including proponent data) is derived from ISS publications and the ISS shareholder proposals and voting analytics databases, with only limited additional research and supplementation from additional sources, and generally includes proposals submitted and reported in these databases for the calendar year from January 1 through July 1, 2026, for annual meetings of shareholders at Russell 3000 companies held on or before July 1, 2026. The data for proposals withdrawn and voted on includes information reported in these databases for annual meetings of shareholders held through July 1, 2026. References in this alert to proposals “submitted” include shareholder proposals publicly disclosed or evidenced as having been delivered to a company, including those that have been voted on, excluded pursuant to a no-action request, or reported as having been withdrawn by the proponent, and do not include proposals that may have been delivered to a company and subsequently withdrawn without any public disclosure. All shareholder proposal data should be considered approximate. Voting results are reported on a votes-cast basis calculated under Rule 14a-8 (votes for or against) and without regard to whether the company’s voting standards take into account the impact of abstentions. Where statistics are provided for 2025 or 2024, the data is for a comparable period in 2025 or 2024, as applicable.

The audit, which ERCOT anticipates will take several months to complete, must occur prior to any additional data center being approved to move forward in the interconnection process.

On August 3, 2026, Texas Governor Greg Abbott sent a letter to Public Utility Commission of Texas (PUCT) Chairman Thomas Gleeson and Electric Reliability Council of Texas (ERCOT) Chief Executive Officer Pablo Vegas directing the PUCT and ERCOT to conduct a “comprehensive verification and audit of all data centers advancing through ERCOT’s interconnection process[.]” The audit must occur “before any additional data centers are approved to move forward” and will apparently review each project’s compliance with applicable requirements set by PUCT, ERCOT, and state law. Any project found to be in violation of such requirements, according to the letter, “must be denied connection to the Texas grid.”

The letter stated that ERCOT is considering approximately 474 gigawatts of requests, ninety percent of which are data centers. The letter further indicated its purpose is “[t]o keep the grid stable and reliable[,]” specifically noting an alleged failure of some data centers to comply with the PUCT’s recent survey of water and power usage.

On August 10, 2026, ERCOT filed a request for good cause exceptions that would allow it to extend several deadlines associated with its implementation of the so-called “Batch Zero” load interconnection process (for loads 75 MW and above) to accommodate the Governor’s directive. The filing also provides a preview of how ERCOT intends to handle the audit process. Discussion at the August 14, 2026 Open Meeting provided further information on timing expectations.

Below, we outline the primary requirements of the directive, as well as ERCOT’s proposed plan to accommodate the audit requirements, and analyze the key impacts on data centers currently seeking to interconnect to the ERCOT grid.

Audit information requested

In addition to verifying and auditing compliance with existing requirements, the directive also specifically asks PUCT and ERCOT to obtain additional detailed information from each data center project on the following topics:

Financial incentives. The extent to which data centers are paying their own way or relying on state and local tax incentives, grants, abatements, or other public financial assistance.
Power sourcing. Whether data centers are providing their own power or depending on the ERCOT grid, including projected annual and peak electricity consumption and progress toward constructing or procuring on-site generation.
Water usage. Projected annual and peak water consumption, anticipated water supply sources, and cooling technology to be used (air-cooled, closed-loop, or other water-efficient systems).
Community impact mitigation. Measures to reduce impacts on neighboring property owners and communities, including noise mitigation, light controls, setbacks, traffic improvements, and emergency response coordination.
Ownership and control. Details regarding the ownership and controlling interests in the project. Specifics on how detailed information on corporate structure needs to be was not provided with the letter.

Under the directive, any data center project that fails to comply with the verification and audit process “must be denied” interconnection to the grid. The letter does not provide any timeline on which the audit must be conducted.

While the directive seeks to verify and audit compliance with existing requirements and to obtain information on community impacts, it is not a moratorium on data center development.

ERCOT’s proposed plan and key impacts to data centers

ERCOT’s August 10, 2026 filing requested exceptions to certain of ERCOT’s own deadlines related to Batch Zero and also previewed ERCOT’s plan to implement the audit. ERCOT is expected to provide more specific timing details on implementation in a subsequent filing, with further discussion during the August 20, 2026 PUCT Open Meeting. At the August 14, 2026 Open Meeting, ERCOT stated it expects the verification process to take several months, but less than nine months.

Based on the directive and ERCOT’s initial filing and Open Meeting comments, the key impacts to data centers seeking to interconnect to ERCOT are likely to be as follows:

Key Impact #1: Delays to certain Batch Zero deadlines; temporary pause in studies

The immediate practical impact of the Governor’s directive, at least for those loads 75 MW and above seeking to be included as part of the Batch Zero process (Large Loads), is a delay in ERCOT’s announcing Batch Zero classifications, and a “temporary paus[e]” of the study process while the audit is completed. However, there is no imminent impact to the issuance of study results by April 9, 2027 (yet).

ERCOT made the following requests related to specific Batch Zero deadlines in its August 10 filing:

Request for waiver of August 7, 2026 classification deadline. Under ERCOT Planning Guide requirements, ERCOT was required to classify each Large Load into one of three categories by the August 7 deadline: (1) load that has already been sufficiently studied for interconnection (“Base Load”); (2) load that requires additional study in Batch Zero (“Studied Load”); and (3) load that will require study in a future interconnection process. ERCOT explained it originally intended to complete the verification process, which was already a required component of Batch Zero, after communicating classifications, and before the April 2027 study results deadline, but that it could not complete the verification process before the August 7 deadline, as the letter would require. As a result, ERCOT requires waiver of the classification deadline.
Request to include Large Loads in Quarterly Stability Assessments (QSAs) before they are classified as Base Load. ERCOT requested to include Large Loads that Interconnecting Distribution Service Providers (DSPs) and Transmission Service Providers (TSPs) requested be classified as Base Load and that ERCOT determined are eligible to qualify as Base Load but has not yet formally classified in the August 1, 2026, and November 1, 2026 QSAs. This inclusion was originally contemplated to only occur after classification, which will now be delayed. Six Large Loads are expected to be in the August 1 QSA, and seventeen Large Loads are potentially eligible for the November 1 QSA. ERCOT clarified that QSA inclusion would not constitute energization authorization for that particular project.
Request for waiver to provide Batch Zero dynamic model review and deficiency notifications. ERCOT was required to notify interconnecting Large Loads by August 7, 2026 of any deficiencies in submitted dynamic data, which such loads were required to cure by August 31, 2026, or be removed from Batch Zero. ERCOT noted it was unable to complete its review on this timeline given the volume of data received, but will do so as quickly as possible. To accommodate this delay, ERCOT requests allowing Large Loads to cure any deficiency noticed by ERCOT after the August 7, 2026 deadline within 24 days of notification.

Importantly, and as noted above, ERCOT did not request an extension of the April 9, 2027 deadline to provide Batch Zero Interconnection Study results. In its filing ERCOT noted that it is “working on the scope and timing of the verification process” and that it does not yet know how the delay will impact the study timeline. ERCOT indicated it may request another good cause exception or make changes through the stakeholder process to the study deadline “[i]f necessary[.]”

Key Impact #2: Responses to ERCOT-issued RFIs regarding compliance and community impact information will be mandatory, although exact timing of the process and scope of the process is not yet known

As to how it will ultimately implement the verification and audit process, ERCOT stated that it will:

Issue requests for information (RFIs) to all Large Loads in Batch Zero regarding verification of compliance, with these responses used to verify each Large Load’s attestations submitted earlier this year.
- If ERCOT determines a Large Load submitted information that is false in any material respect, or if the Large Load fails to respond, it will be classified as ineligible for Batch Zero.
Issue RFIs to obtain the community impact information required by the directive.
Issue similar RFIs to loads with a peak demand greater than 25 MW but less than 75 MW that are seeking to interconnect but that are not part of Batch Zero.
- ERCOT estimates there are approximately 8,766 MW of such loads that will be impacted.
Issue periodic updates to the PUCT, and once complete, compile the results into a report filed with the PUCT.

ERCOT plans to submit another filing to the PUCT providing additional details on implementation, will discuss such implementation during the August 20, 2026 Open Meeting, and expects to commence its verification and audit process “shortly after” the August 20, 2026 Open Meeting.

Key Impact #3: The delays described above will also delay issuance of the Long-Term Load Forecast (LTLF)

ERCOT also explained that due to the delays to the classification notifications noted above, the LTLF, which ERCOT had earlier requested to adjust to include Batch Zero Base Load information, will also be delayed. The LTLF is important to data centers because the inclusion of their projects in the forecasts ultimately influences what physical infrastructure is built to serve their projects. ERCOT had originally anticipated finalizing the LTLF by mid-August 2026. Although the LTLF will be delayed, ERCOT explained that incorporating verified Base Loads into the forecast “will produce a more accurate and realistic forecast than alternative methodologies[.]”

The Gibson Dunn Data Centers and Digital Infrastructure Practice Group is closely monitoring legislative, regulatory, and political developments affecting the data center industry. We are prepared to assist clients with all aspects of data center development, operations, and infrastructure strategy. Please contact one of the Gibson Dunn lawyers listed below or the lawyer with whom you usually work if you have any questions.

The following Gibson Dunn lawyers prepared this update: Tory Lauterbach, Adam Whitehouse, Allison Hellreich, Carrie Mobley, and Jess Rollinson.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these issues. For additional information about how we may assist you, please contact the Gibson Dunn lawyer with whom you usually work, the authors, any leader or member of the firm’s Data Centers & Digital Infrastructure, Energy Regulation & Litigation, Real Estate, or Projects practice groups, or the following data centers teams:

Energy & Data Centers:
Tory Lauterbach – Washington, D.C. (+1 202.955.8519, tlauterbach@gibsondunn.com)
Adam Whitehouse – Houston, TX (+1 346.718.6696, awhitehouse@gibsondunn.com)
Allison Hellreich – Washington, D.C. (+1 202.887.3592, ahellreich@gibsondunn.com)

Real Estate, Data Centers & Digital Infrastructure:
Emily Naughton – Washington, D.C. (+1 202.955.8509, enaughton@gibsondunn.com)
Whitney Smith – Washington, D.C. (+1 202.777.9307, wsmith@gibsondunn.com)
Alexander X. Jackins – Washington, D.C. (+1 202.887.3595, ajackins@gibsondunn.com)

Projects & Infrastructure:
Tomer Pinkusiewicz – New York (+1 212.351.2630, tpinkusiewicz@gibsondunn.com)
Anita Girdhari – New York (+1 212.351.5362, agirdhari@gibsondunn.com)

From the Derivatives Practice Group: This week, the CFTC issued an advisory reminding designated contract markets of their regulatory obligations when submitting self-certifications for market-maker, liquidity, trading, or incentive programs under CFTC Regulations 40.5 and 40.6.

New Developments

CFTC Exercises Emergency Authority to Ensure Market Stability. On August 11, the CFTC exercised its emergency authority in response to KalshiEX, LLC’s notification of a market emergency and ordered the exchange to continue to operate in accordance with the Commodity Exchange Act’s Core Principles, which requires the Commission to provide a uniform national market in derivatives transactions. [NEW]

Chairman Selig Announces Inaugural CFTC Innovation Advisory Committee Meeting on August 20 in Washington. On August 10, Chairman Michael Selig, sponsor of the Innovation Advisory Committee (IAC), announced the IAC will host its inaugural meeting at 1 p.m. EST on August 20, in Washington. The Innovation Advisory Committee was created to advise the Commission on complex issues at the intersection of technology, law, policy, and finance. [NEW]

CFTC Reminds Markets to Display Clear Pricing Information. On August 7, the CFTC’s Division of Market Oversight and the Market Participants Division of the Commodity Futures Trading Commission issued a letter to remind Commission-regulated entities involved in the listing, soliciting, or acceptance of event contracts of their responsibility not to mislead consumers, including the obligation to display clear and accurate pricing information for derivatives products. [NEW]

New Developments Outside the U.S.

FCA Publishes Policy Statement on UK MIFIR Transaction Reporting. On August 3, the UK Financial Conduct Authority (FCA) published Policy Statement PS26/15 on improving the UK transaction reporting regime. This sets out the final rules and guidance to be made to the UK Markets in Financial Instruments Regulation (MIFIR) transaction reporting requirements, following feedback received from FCA consultation CP25/32, which was published last year.

EBA Publishes No-Action Letter and Technical Clarifications on Market Risk. On August 3, the European Banking Authority (EBA) published a no-action letter and technical considerations to support the implementation of the market risk framework for EU banks, known as the Fundamental Review of the Trading Book (FRTB). This publication is meant to complement the adoption of the third EU market risk delegated act by the European Commission in June, which introduced temporary adjustments to the FRTB and the application of an overarching multiplier aimed at banks that will be negatively impacted by its implementation.

EBA, EIOPA and ESMA Propose Amendments to Bilateral Margin Requirements. On August 3, the European Supervisory Authorities published a final report on draft Regulatory Technical Standards. The report proposes to simplify the bilateral margin requirements of the European Commission’s Delegated Regulation (EU) 2016/2251.

New Industry-Led Developments

ISDA Responds to EC on CSDDD Due Diligence Guidelines. On August 6, ISDA responded to the European Commission’s (EC) consultation on due diligence guidelines under the Corporate Sustainability Due Diligence Directive (CSDDD). According to ISDA, while model contractual clauses can be a helpful resource for in-scope companies, there are limits on what a model clause can achieve in the context of ensuring effective due diligence. [NEW]

ISDA Responds to Bank of England Consultation on Extension of Settlement Hours. On August 6, ISDA responded to the Bank of England’s (BoE) consultation paper on the extension of settlement hours for Real-Time Gross Settlement (RTGS) and the Clearing House Automated Payment System (CHAPS). ISDA stated that it supports the BoE’s plan to extend RTGS and CHAPS settlement hours and the response focuses on the relevance of the shift towards longer settlement hours for market participants relying on RTGS for settlement of cash variation margin and initial margin in the context of derivatives clearing. In that regard, extending settlement hours is a welcome development. [NEW]

ISDA Expands SwapsInfo Website with US FX Derivatives Data. On August 4, ISDA announced that it has expanded its SwapsInfo website to include data on US-reported foreign exchange (FX) derivatives. ISDA said the new FX section provides insights into trading activity in FX forwards, swaps and options. According to ISDA, users can analyze the data by product type, currency pair, execution method, tenor and clearing status, thus making it easier to identify market trends and compare activity across different segments of the market.

The following Gibson Dunn attorneys assisted in preparing this update: Jeffrey Steiner, Adam Lapidus, Hayden McGovern, Karin Thrasher, and Alice Wang.

Jeffrey L. Steiner, Washington, D.C. (202.887.3632, jsteiner@gibsondunn.com)

Michael D. Bopp, Washington, D.C. (202.955.8256, mbopp@gibsondunn.com)

Michelle M. Kirschner, London (+44 (0)20 7071.4212, mkirschner@gibsondunn.com)

Darius Mehraban, New York (212.351.2428, dmehraban@gibsondunn.com)

Jason J. Cabral, New York (212.351.6267, jcabral@gibsondunn.com)

Adam Lapidus, New York (212.351.3869, alapidus@gibsondunn.com )

Stephanie L. Brooker, Washington, D.C. (202.887.3502, sbrooker@gibsondunn.com)

William R. Hallatt, Hong Kong (+852 2214 3836, whallatt@gibsondunn.com )

David P. Burns, Washington, D.C. (202.887.3786, dburns@gibsondunn.com)

Marc Aaron Takagaki, New York (212.351.4028, mtakagaki@gibsondunn.com)

Hayden K. McGovern, Dallas (202.887.3569, hmcgovern@gibsondunn.com)

Karin Thrasher, Washington, D.C. (202.887.3712, kthrasher@gibsondunn.com)

Alice Yiqian Wang, Washington, D.C. (202.777.9587, awang@gibsondunn.com)

We are pleased to provide you with the June and July edition of Gibson Dunn’s digital assets regular update. This update covers recent legal news regarding digital assets, including cryptocurrencies, stablecoins, digital asset market structure, tokenized assets, decentralized finance, prediction markets, digital asset custody and trust charters, crypto enforcement actions, and blockchain-related legislative and regulatory developments in the United States and internationally.

REGULATION AND LEGISLATION

UNITED STATES

Senate Releases Merged Clarity Act Text with Ethics Provision as Pre-Recess Window Narrows
On July 22, Senator Cynthia Lumis (R-WY) released updated text for the Clarity Act reflecting the merged work product of the Senate Banking and Agriculture Committees, following President Trump’s agreement to an ethics provision after months of negotiations over how to limit federal officials from profiting from digital assets while in office. The updated text adds an ethics provision, in response to President Trump, that would prohibit public officials and their spouses, including the President, Vice President, Members of Congress, and federal judges, from issuing or sponsoring a digital asset in exchange for consideration, enforceable through civil actions brought by the Attorney General. Senator Thune filed cloture on the bill and the vote is scheduled for September. Lummis Press Release; Bill Text; Ethics Fact Sheet; The Block (July 20); The Block (July 21); Coindesk (July 26).

California’s Digital Financial Assets Law Takes Effect, Requiring California Department of Financial Protection and Innovation Licensure for Digital Financial Asset Businesses
On July 1, California’s Digital Financial Assets Law (DFAL) took effect. The law prohibits companies from engaging in digital financial asset business activity—including exchanging, transferring, storing, or issuing digital financial assets—with or on behalf of California residents unless they hold a license from the California Department of Financial Protection and Innovation (DFPI), have a complete license application pending, or qualify for an exemption. The DFAL establishes a comprehensive licensing, supervision, and enforcement framework for non-bank digital asset businesses, with additional obligations for crypto kiosk operators. The DFPI began accepting license applications through the Nationwide Multistate Licensing System (NMLS) on March 9, 2026, and unlicensed entities engaging in covered activity now face civil penalties of up to $100,000 per day, as well as possible federal criminal sanction. DFPI Digital Financial Assets Page.

Illinois Enacts 0.2% Privilege Tax on Digital Asset Transactions
On June 16, Governor JB Pritzker signed SB 3019, a state revenue bill effective January 1, 2027 that establishes a first-of-its-kind 0.2% tax on the exchanging, transferring, and storing of digital assets through a broker by customers located in Illinois. The law also imposes registration, tax-collection, and recordkeeping requirements on brokers that have a physical presence in Illinois or at least $100k in gross receipts annually with Illinois customers. The Digital Chamber, a crypto trade association, has filed a lawsuit against Illinois seeking to block the tax before it takes effect, and legislation has been proposed that would repeal the tax. Bill Text; The Block; Yahoo Finance; The Street.

Circle and Sony Bank Receive OCC Approvals for National Trust Banks
On July 10, Circle announced that it received approval from the Office of the Comptroller of the Currency (OCC) to establish First National Digital Currency Bank, N.A., a national trust bank that will operate under the name Circle National Trust and be subject to direct federal oversight by the OCC. Upon opening, the bank will offer fiduciary digital asset custody services for Circle and its affiliates, with management of the USDC Reserve planned as a future capability. Circle submitted its application to the OCC on June 30, 2025, and received conditional approval in December 2025. Separately, on July 6, Sony Financial Group announced that its subsidiary Sony Bank obtained conditional approval from the OCC to establish Connectia Trust, National Association, a national trust bank that intends to issue and manage U.S. dollar-denominated stablecoins, with no business activities to commence until all authorizations, including the OCC’s final approval, have are obtained. Press Release; The Block; Sony Financial Group Statement; The Block.

Senator Wyden Urges Senate Leaders to Preserve Blockchain Developer Protections in Clarity Act
On July 8, Senator Ron Wyden (D-OR) sent a letter to Senate Majority Leader John Thune (R-SD) and Senate Minority Leader Charles Schumer (D-NY) urging them to preserve Section 604 of the Clarity Act, known as the Blockchain Regulatory Certainty Act (BRCA), in future versions of the bill. The provision, which creates a safe harbor clarifying that non-custodial developers are not money transmitters, has support from much of the crypto industry but has drawn warnings from some law enforcement groups that it could weaken safeguards against illicit finance. The provision was retained, as Section 10604, in the updated text of the Clarity Act released on July 22. Bill Text; The Block.

SEC’s 2026 Regulatory Agenda Targets Digital Asset Rules for Exchanges and Broker-Dealers
On July 7, the Securities and Exchange Commission (SEC) released its 2026 Regulatory Agenda, which lays the groundwork for digital asset rulemaking before the end of the year and includes crypto among the agency’s biggest regulatory priorities. The agenda includes potential amendments to the SEC’s broker-dealer net capital, customer protection, and recordkeeping rules to address their application to digital assets, as well as changes to the agency’s exchange rules. The SEC stated that the proposed rules will provide greater certainty to the market, facilitate capital formation, and accommodate innovation while ensuring investors are adequately protected. SEC Regulatory Agenda; The Block.

SEC Seeks Public Comment on Digital Assets and Other “Novel” Exchange-Traded Funds
On June 30, the SEC issued a request for public comment on exchange-traded funds that invest in innovative asset classes or employ novel investment strategies, expressly including digital assets, blockchain-enabled opportunities, and event contracts. Among its 27 questions, the request asks whether funds holding predominantly non-securities assets—including digital assets treated as commodities—should be regulated as investment companies under the Investment Company Act, and how the SEC’s streamlined Exchange-Traded Fund (ETF) listing framework should apply to newer asset types. Comments are due 60 days after publication in the Federal Register. SEC Press Release; CoinDesk; The Block.

Housing Bill Barring the Federal Reserve from Issuing a Central Bank Digital Currency Through 2030 Goes Into Effect
On July 10, the 21st Century ROAD to Housing Act went into effect. The bipartisan housing package includes a provision prohibiting the Federal Reserve from issuing or creating a central bank digital currency (CBDC)—or any substantially similar digital asset—directly or indirectly through a financial institution or other intermediary, through December 31, 2030. The CBDC provision carves out dollar-denominated currency that is “open, permissionless, and private,” leaving privately issued stablecoins governed by the GENIUS Act unaffected. The Block (Senate); The Block (House); The Block (Enactment).

Federal Regulators Propose Rules Implementing the GENIUS Act
On June 22, the OCC issued a notice of proposed rulemaking to implement the Bank Secrecy Act, anti-money laundering (AML), and sanctions compliance standards for OCC-supervised permitted payment stablecoin issuers, as required by the GENIUS Act, consistent with the regulations proposed by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) in April. Comments were due on July 24. The FDIC issued a parallel proposal for stablecoin issuers under its jurisdiction on June 5, with comments due August 4. And on June 18, FinCEN, together with the OCC, the Federal Reserve, the FDIC, and the NCUA, issued a joint proposed rule that would treat permitted payment stablecoin issuers as financial institutions under the Bank Secrecy Act, and require them to maintain effective customer identification programs. Comments are due August 21. Federal Register (OCC Proposal); Federal Register (FDIC); Federal Register (FinCEN); ABA Banking Journal; Gibson Dunn Client Alert Discussing Proposal; FinCEN Release; The Block.

Digital Asset Industry Groups Urge Congress to Pass Mining and Staking Tax Bill Unchanged
On June 21, the Blockchain Association, the Crypto Council for Innovation, and The Digital Chamber sent a joint letter to House Ways and Means Committee Chair Jason Smith and Ranking Member Richard Neal urging passage of the Tax Clarity for Mining and Staking Act (H.R. 9175) as introduced. The bill would allow taxpayers to elect to recognize income from mining and staking rewards either upon receipt or upon sale of the assets, addressing what the groups describe as taxation of “phantom income” under current IRS guidance, which taxes rewards when received even where recipients cannot immediately sell the tokens. The Ways and Means Committee held a hearing on the bill and other digital asset tax measures earlier in June. The Block.

The CFTC and SEC Seek Comment on Harmonizing Derivatives Product Definitions
On June 18, the CFTC and SEC issued a joint request for public comment on opportunities to update, clarify, and harmonize certain derivatives product definitions and interpretive issues under Title VII of Dodd-Frank. The request seeks input on topics including the scope of swap and security-based swap definitions, the treatment of mixed swaps and novel or emerging products, jurisdictional lines between the two agencies, and potential avenues for alternative compliance. Comments are due August 24. CFTC Press Release; Federal Register; The Block.

SEC Proposes Rescinding Reg NMS Order Protection Rule
On June 11, the SEC proposed amendments to Regulation NMS that would rescind Rule 611, the “trade-through” rule, which generally prevents trading centers from executing orders at prices inferior to protected quotations displayed by other trading centers, along with Rule 610(e)’s restrictions on locked and crossed quotations. The proposing release cites the rapid evolution of the equity markets, including that distributed ledger technology now allows issuers to tokenize securities and has introduced new methods of trading through automated market makers. Comments are due August 17. SEC Press Release; Federal Register.

NY DFS Proposes Stablecoin Rule to Align State Framework with the GENIUS Act
On June 9, the New York State Department of Financial Services (NY DFS) proposed a regulation building on its 2022 stablecoin guidance to align New York’s framework with the federal GENIUS Act and the Treasury Department’s proposed requirements for state frameworks to be certified under that Act. The proposal carries forward NY DFS’s existing requirements for U.S. dollar-backed stablecoins while adding new federal-driven provisions, including a cap on the amount of reserves that may be held at any one custodian and a requirement that issuers adopt risk-management programs. The final regulation would take effect when the GENIUS Act becomes effective, with a one-year transition period for existing New York-licensed issuers. Proposed Regulation Text; NYDFS Release; The Block.

New Hampshire Executive Council Rejects $100 Million Bitcoin-Backed Bond Proposal
On July 8, the New Hampshire Executive Council voted 3-2 to reject a proposal to issue up to $100 million in taxable conduit revenue bonds collateralized by bitcoin, which would have allowed the New Hampshire Business Finance Authority to serve as conduit issuer for bonds financing a private borrower tied to bitcoin miner CleanSpark. Under the proposed structure, CleanSpark would have deposited roughly $160 million in bitcoin as collateral, with no obligation or risk to New Hampshire taxpayers. Governor Kelly Ayotte had supported the proposal. The Block.

INTERNATIONAL

DFSA Consults on Crypto Token Definitions and Fund Tokenization
The Dubai Financial Services Authority (DFSA) has published two consultation papers concerning its digital asset framework. Consultation Paper No. 174 proposes refinements to the definitions of Fiat Crypto Token, Privacy Token, Privacy Device and Investment Token, while Consultation Paper No. 173 seeks early-stage feedback on the use of digital ledger technology and tokenization in the Dubai International Financial Center funds industry. Responses to the consultation papers are due by August 24 and September 7, respectively. CP 174 CP 173.

Dubai VARA Publishes Guidance on AML/CFT Business Risk Assessments for Virtual Asset Service Providers
On June 12, Dubai’s Virtual Assets Regulatory Authority (VARA) published practice guidance on AML/CFT Business Risk Assessments for licensed virtual asset service providers (VASPs). The guidance reiterates that VASPs must maintain a documented Risk Assessment, review it at intervals of no longer than three months and following significant changes, and demonstrate that its conclusions inform their AML/CFT policies, systems, controls, and allocation of resources. VARA.

MiCA Transitional Period Ends, Requiring Full Authorization for Crypto-Asset Service Providers Across the EU
On July 1, the transitional “grandfathering” period under Markets in Crypto-Assets Regulation (MiCA) expired, closing the last remaining window in which crypto-asset service providers (CASPs) that were operating lawfully under national regimes before December 30, 2024, could continue serving EU clients without full MiCA authorization. Under Article 143(3) of MiCA, member states could grant transitional periods of up to 18 months, and while several jurisdictions—including Germany, Ireland, and the Netherlands—closed their windows earlier, July 1 marked the outer limit across all member states. The European Securities and Markets Authority has advised that firms without authorization must implement orderly wind-down plans and cease providing crypto-asset services to EU clients. Elliptic; KPMG; The Block.

EBA Consults on Penalty Methodology for Significant Token Issuers Under MiCA
On June 26, the European Banking Authority (EBA) published a consultation paper proposing a standardized methodology for setting fines against non-compliant issuers of significant asset-referenced tokens and significant e-money tokens under MiCA. The proposed framework would apply a two-step process, first assessing the baseline severity of an infringement and then adjusting for aggravating or mitigating circumstances, with final penalties subject to statutory ceilings of 12.5% of annual turnover for issuers of significant asset-referenced tokens and 10% for issuers of significant e-money tokens, or twice the profits gained from the violation. The consultation closes on September 28. Consultation Paper; Cointelegraph.

South Korea’s Supreme Court Proposes Crypto Seizure and Liquidation Procedures as the Financial Intelligence Unit Pushes to Expand Travel Rule Coverage
South Korea’s Supreme Court has proposed amendments introducing detailed procedures for the seizure and liquidation of digital assets in civil enforcement proceedings. Under the proposed rules, a court-issued seizure order would immediately bar debtors from disposing of digital assets and require their transfer to a court enforcement officer, and courts could liquidate seized assets by ordering their delivery to creditors at a court-determined value or by directing enforcement officers to sell them, including through dedicated accounts at virtual asset service providers. The amendments would also establish clearer rules for provisional measures, such as preliminary seizures and injunctions, designed to prevent debtors from transferring or hiding digital assets during litigation. The Supreme Court will accept public comments on the draft until August 11, and the revisions are expected to take effect in October. The Block.

Separately, on June 22, South Korea’s Financial Intelligence Unit announced that it had proposed expanding the Financial Action Task Force’s Travel Rule—which South Korea currently applies to crypto transfers above 1 million won (approximately $650)—to smaller transactions and called for stronger action against offshore and unregistered crypto platforms, citing illicit finance risks and uneven global implementation of anti-money laundering standards for digital assets. Cointelegraph.

Taiwan Passes Virtual Asset Service Act, Establishing Licensing Regime for Crypto Firms and Stablecoin Issuers
On June 30, Taiwan’s Legislative Yuan passed the Virtual Asset Service Act on its third and final reading, giving Taiwan its first comprehensive regulatory framework for digital assets and shifting oversight from an anti-money laundering registration system to full licensing and supervision by the Financial Supervisory Commission (FSC). The law defines seven categories of virtual asset service providers—including exchanges, trading platforms, transfer services, custodians, underwriters, and lenders—and requires stablecoin issuers to obtain approval from both the FSC and the central bank and to maintain full reserve backing. Unlicensed operation is punishable by up to seven years’ imprisonment and fines of up to NT$100 million. The act now goes to President Lai Ching-te for promulgation, with the cabinet to determine when the law should take effect. The Block.

Hong Kong SFC Sets Enhanced Cybersecurity Standards for Internet Brokers and Virtual Asset Trading Platforms
On July 9, the Hong Kong Securities and Futures Commission (SFC) issued a circular setting out enhanced cybersecurity standards for internet brokers and SFC-licensed virtual asset service providers. The SFC expects such firms to use phishing-resistant authentication methods for client logins and device binding, and no longer considers email or SMS one-time passwords sufficient for these purposes. Firms must also implement effective monitoring and surveillance to identify suspicious logins, trading activity, and fund or virtual asset withdrawals, promptly notify clients of high-risk account activity, and maintain procedures for responding to and immediately reporting hacking incidents. SFC.

Hong Kong FSTB and HKMA Announce Further Review of DLT Adoption in Fixed Income Market
On June 29, Hong Kong’s Financial Services and the Treasury Bureau (FSTB) and Hong Kong Monetary Authority (HKMA) announced the conclusion of the first phase of their review of the further adoption of distributed ledger technology (DLT) in Hong Kong’s fixed-income market. The review found that Hong Kong’s existing legal and regulatory framework is sufficiently flexible to support tokenized bond issuances but identified certain areas requiring clarification and legislative enhancement. In the second half of 2026, the FSTB and HKMA will commence the next phase of the review, which will consider potential legislative changes relating to the electronic execution of tokenized bond issuance documents. HKMA.

UK FCA Publishes Q&As on AML Expectations for Cryptoasset Firms Ahead of New Regulatory Regime
On June 3, the FCA published responses to industry questions on the application of anti-money laundering and financial crime requirements to cryptoasset firms. The FCA confirmed that registration under the Money Laundering Regulations remains the route for firms seeking to provide in-scope cryptoasset services before the new Financial Services and Markets Act 2000 regime commences in October 2027. The Q&As also outline the FCA’s expectations regarding financial crime governance, resourcing, business-wide risk assessments, transaction monitoring, blockchain analytics, the Travel Rule, sanctions screening, operational resilience, and cross-border arrangements. FCA.

Bank of England Publishes Systemic Stablecoin Rules and Joint Supervision Approach with the FCA
On June 22, the Bank of England published its policy statement and draft Code of Practice for issuers of sterling-denominated systemic stablecoins. On June 30, the Bank and the FCA jointly released an approach document describing how the two regulators will coordinate the supervision of systemic stablecoin issuers. Among other things, the policy statement replaced previously proposed per-coin holding limits of £20,000 for individuals and £10 million for businesses with a temporary aggregate issuance “guardrail,” initially set at £40 billion per systemic stablecoin. The Bank will accept feedback on the draft Code of Practice through September 22 and intends to finalize it by the end of 2026. Bank of England Press Release; Bank of England Policy Statement; Bank of England and FCA Joint Approach Document; The Block.

UK’s Financial Conduct Authority Publishes Final Rules for Cryptoasset Regime Taking Effect in October 2027
On June 30, the United Kingdom’s Financial Conduct Authority (FCA) published final rules establishing conduct, prudential, and market-integrity standards for cryptoasset firms, completing the FCA’s crypto roadmap ahead of the new regime’s entry into force on October 25, 2027. Under the rules, trading platforms, intermediaries, custodians, stablecoin issuers, and staking providers must obtain FCA authorization to operate in the UK and will be subject to financial-resilience requirements, including capital and stress testing, and to new market abuse rules addressing insider dealing and manipulation. Trading platforms must also vet tokens and publish disclosure documents to an FCA-run repository before listing most assets. The authorization gateway opens on September 30, 2026, and firms must apply by February 28, 2027, to operate under the new regime. FCA Press Release; Decrypt; The Block.

LITIGATION

UNITED STATES

CME Sues CFTC Over Approval of U.S. Perpetual Futures
On June 18, the Chicago Mercantile Exchange (CME) sued the CFTC and its chair, Michael Selig, in the U.S. District Court for the District of Columbia, alleging that the CFTC’s approval of perpetual futures—futures contracts that lack an expiration date—violated the Commodity Exchange Act (CEA) because perpetual futures should be classified as swaps under Dodd-Frank and because the CFTC failed to adequately explain its approval decision. CME argues the futures label allows issuers to avoid the heavier tax burden and regulatory scrutiny attached to swaps. Law360; The Block.

Federal Judge Reinstates Fraud Claim Against Barry Silbert and Digital Currency Group in Genesis Yield Class Action
On July 6, Judge Stefan Underhill of the U.S. District Court for the District of Connecticut reinstated a previously dismissed New York common law fraud claim against Barry Silbert, Digital Currency Group (DCG), and other defendants in an investor class action over the failed Genesis Yield program. The ruling revises the court’s February decision after plaintiffs argued the court had authority under the Class Action Fairness Act to consider their state-law claims. The court found the plaintiffs’ allegations that the defendants knowingly misled customers about Genesis’s financial health and risk controls before it suspended withdrawals and filed for bankruptcy in early 2023 were sufficient for the fraud claim to move forward, while staying consumer protection claims under California, Florida, and New York law and dismissing claims under Illinois, Kansas, Nevada, and Texas law. DCG has previously called similar allegations baseless. The Block; Opinion.

ENFORCEMENT ACTIONS

UNITED STATES

CFTC Rescinds “No-Deny” Settlement Policy in Enforcement Actions
On June 3, the CFTC rescinded its longstanding “no-deny” policy, maintained since 1998, under which the Commission would not accept settlement offers in enforcement actions where the respondent or defendant continued to deny the allegations or the findings of fact and conclusions of law. The CFTC stated that the rescission aligns the Commission with the overwhelming majority of federal agencies and gives it more flexibility in settling enforcement actions, and that the policy may have created an incorrect impression that the Commission was trying to shield itself from criticism. The Commission will not enforce existing no-deny provisions already entered, and retains discretion to negotiate for admissions as part of a settlement. The move follows the SEC’s rescission of a similar policy in May. CFTC Press Release; Rescission; Law360.

DOJ and Secret Service Seize Over $25 Million in Digital Assets Tied to International Fraud Schemes
On July 21, the U.S. Attorney’s Office for the District of Columbia filed five civil forfeiture complaints seeking forfeiture of more than $25 million in digital assets recovered during separate fraud investigations conducted by U.S. Secret Service agents, targeting international schemes, including fraudulent investment platforms, online romance scams, and a fee-based recovery fraud, that victimized residents of the United States and Canada. In each of the five cases, launderers were predominantly located in Southeast Asia, with IP addresses in China, Malaysia, and Cambodia. The seizures are part of the more than $800 million recovered through the Scam Center Strike Force, launched by U.S. Attorney Jeanine F. Pirro in November 2025. DOJ Release; The Block.

Federal Grand Jury Indicts Sioux Falls Investor in Alleged $20 Million Ponzi-Style Scheme
On July 16, the U.S. Attorney’s Office for the District of South Dakota announced a 29-count indictment charging Benjamin Paul Wiener with wire fraud, money laundering, bank fraud, and aggravated identity theft arising from an alleged scheme impacting dozens of victims in South Dakota and Minnesota, with estimated losses of approximately $20 million. The indictment alleges Wiener induced victims to invest money and digital currency in his companies through materially false statements, laundered the proceeds through financial institutions and digital asset exchanges, and recruited new investors to repay earlier ones as funds were depleted. He pled not guilty; trial is set for September 15, 2026. DOJ Release; The Block.

Two Members of Chinese Money Laundering Network Charged with Laundering $43 Million in Investment Fraud Proceeds
On July 16, the U.S. Attorney’s Office for the Eastern District of New York announced charges against Zhuoying Chen of Brooklyn and Haojie Zhang of Queens for money laundering conspiracy, in connection with a scheme to launder funds derived from cyber investment fraud scams, commonly known as “pig butchering” scams. The indictment alleges that between 2020 and 2022, Chen and Zhang managed a network of more than a dozen individuals who opened 140 bank accounts in the name of approximately 45 shell companies to launder at least $43 million in investment scam proceeds, then conspired with China-based co-conspirators to transfer the funds abroad. Both defendants were arrested on July 16. DOJ Press Release; DOJ (EDNY) Release.

OFAC Sanctions Brazilian Network for Laundering Drug Proceeds via Digital Assets for PCC
On July 1, OFAC designated two Brazilian nationals, three Brazilian companies, and one Portuguese company for their links to Primeiro Comando da Capital (PCC), a Brazil-based gang that Treasury described as the largest transnational criminal organization in the Western Hemisphere. OFAC stated that the São Paulo-based network, led by Victor Henrique de Oliveira Shimada, laundered more than $30 million in illicit proceeds generated in and around multiple U.S. cities, utilizing digital assets to move funds back to Brazil on behalf of PCC. The action, OFAC’s third against PCC and its operatives, followed the FBI’s January arrest of six members of the network’s Florida-based group, who were indicted in the Southern District of Florida. Treasury Press Release; Chainalysis.

Goliath Ventures CEO Pleads Guilty in $400 Million Crypto Ponzi Scheme
On June 30, Christopher Alexander Delgado of Apopka, Florida, the chief executive officer of Goliath Ventures Inc., pled guilty in the U.S. District Court for the Middle District of Florida to conspiracy to commit wire fraud, wire fraud, and money laundering, admitting that his conduct caused at least $250 million in investor losses. According to the plea agreement, from at least January 2023 through January 2026 Goliath raised roughly $400 million from investors on false promises of monthly returns generated through digital asset liquidity pools. Rather than investing the funds as represented, Delgado and his co-conspirators used new investor money to pay purported returns to earlier investors and to fund luxury purchases, and Delgado agreed to forfeit numerous properties, vehicles, and other assets. Sentencing is set for October 8, 2026. DOJ Release; Yahoo Finance.

SEC Obtains $5.5 Million Final Judgment in First “Pig Butchering” Enforcement Action Against NanoBit
On June 29, the SEC announced that the U.S. District Court for the Eastern District of New York entered final default judgments against NanoBit Limited and five related defendants, ordering more than $5 million in combined disgorgement, prejudgment interest, and civil penalties and permanently enjoining the defendants from participating in securities offerings. The SEC’s September 2024 complaint—described at the time as the agency’s first enforcement action involving relationship investment scams or “pig butchering”—alleged that participants in the scheme posed as financial professionals in WhatsApp groups, induced at least 18 investors to deposit funds into the fake NanoBit trading platform, and wired more than $2 million to bank accounts in Hong Kong while misappropriating investors’ digital assets. The Block; Law360.

OFAC Targets Digital Assets Tied to Iran and Terrorist Financing Networks
On June 2, OFAC sanctioned Nobitex, Iran’s largest digital asset exchange, along with Iranian platforms Wallex, Bitpin, and Ramzinex, stating that Nobitex processed over 50 percent of all Iranian digital asset inflows in 2025 and was a key player in sanctions evasion, terrorist financing, and transactions linked to the Islamic Revolutionary Guard Corps (IRGC). On June 22, OFAC designated three individuals and six entities, including Syria-based Bitcoin Xchange, for facilitating financial transactions on behalf of ISIS, and on July 1, OFAC added 134 digital asset wallet addresses to its designation of ISIS-Khorasan. Then, on July 14, after a ceasefire agreement between the two countries broke down, OFAC added four Tron wallet addresses to its designation of the Central Bank of the Islamic Republic of Iran, bringing the total blocked digital assets tied to Iran’s central bank to roughly $475 million. Treasury Press Release (June 2); Treasury Press Release (June 22); OFAC Sanctions List Update; The Block (June); The Block (July); CoinDesk; OFAC Recent Actions; Chainalysis.

CFTC and FTC Resolve Enforcement Actions Against Celsius Founders
On June 18, the CFTC announced that the U.S. District Court for the Southern District of New York entered a consent order resolving its 2023 enforcement action against Alexander Mashinsky, founder and former CEO of Celsius Network LLC, over allegations he misrepresented the safety, profitability, and regulatory compliance of the digital asset platform. The consent order permanently enjoins Mashinsky from further violations of the CEA’s anti-fraud provisions and imposes permanent trading and registration bans. On July 20, the FTC announced that Mashinsky and his business partners Shlomi Daniel Leon and Hanoch Goldstein agreed to pay a total of $16.5 million to resolve allegations that they falsely promised users their deposits would be safe and always available, under orders that also ban the co-founders from marketing or selling products or services used to deposit or withdraw certain assets. CFTC Press Release; FTC Press Release; The Block.

Promoter Pleads Guilty in $1.8 Billion HyperFund Fraud
On June 17, Rodney “Bitcoin Rodney” Burton pleaded guilty in the U.S. District Court for the District of Maryland to conspiracy to operate an unlicensed money transmitting business, for his role promoting HyperFund. DOJ alleges that HyperFund was a purported crypto investment platform that functioned as a global wire-fraud scheme that took in $1.8 billion from investors worldwide. According to the plea agreement, HyperFund lured investors with false promises of daily passive rewards funded by nonexistent crypto-mining operations, and Burton personally received at least $7.85 million in proceeds. Burton faces a maximum of five years in federal prison. DOJ Release; The Block; Yahoo Finance.

Two Charged in $389 Million Crypto Money Laundering Takedown
On June 11, the U.S. Attorney’s Office for the Eastern District of Pennsylvania announced that Ruslan Igorevich Tkachuk, a Ukrainian national, and Alexander Vladimirovich Ledenev, a Russian national, were arrested and charged with conspiracy to launder monetary instruments and sting money laundering for alleged roles as senior members of “AudiA6,” a digital asset money laundering service believed responsible for laundering more than $389 million since 2021. The complaint alleges that AudiA6 advertised on a cybercrime forum that it would conceal the criminal source of customers’ digital assets for a fee of up to five percent, and blockchain analysis traced roughly 10,333 Bitcoin deposited to its wallets, including funds received directly from darknet markets, ransomware groups, and other illicit sources. DOJ Release; Europol Release.

INTERNATIONAL

South Korea Refers Crypto “Whale” Market Manipulation Cases to Prosecutors
On July 1, South Korea’s FSC approved the referral of suspects in two virtual asset market manipulation cases to prosecutors. In the first case, a large holder allegedly spent tens of billions of won over roughly two months to acquire nearly half of a token’s global circulating supply, inflating its price on overseas platforms before selling holdings on a domestic exchange. In the second case, a suspect allegedly used automated Application Programming Interface (API) orders to create the appearance of active trading in a thinly traded, domestically issued token before selling at a profit. The FSC said it will enhance its warning system for highly concentrated crypto trading and upgrade its surveillance framework to detect unfair trading practices more promptly. The Block.

Shanghai Court Sentences Five to Prison Over $29 Million Crypto-Based Foreign Exchange Scheme
On July 1, a Shanghai court sentenced five individuals to prison terms of up to six years for operating an illegal foreign exchange business that used cryptocurrency to move more than $29.4 million abroad in circumvention of China’s capital controls. According to the Shanghai Jing’an District People’s Procuratorate, authorities began investigating in July 2024 after discovering unusual transactions tied to a company that facilitated illegal overseas transfers via crypto, ultimately arresting nine people. The five defendants who were sentenced also received fines ranging from 300,000 to 1.5 million yuan. The Block.

OTHER NOTABLE NEWS

DTCC Processes First Production Trades of Tokenized Stocks and Treasuries
On July 15, the Depository Trust & Clearing Corporation (DTCC) announced that it successfully converted assets held at The Depository Trust Company into tokens used in real production trades, which DTCC described as the largest tokenization production initiative in breadth of use cases, asset classes, and participants. More than 30 firms took part in transactions spanning collateral pledges, securities lending, Treasury/repo and equity trades, and central counterparty margin workflows on DTCC’s private Hyperledger Besu network and the public Canton Network. The trades follow the SEC’s December no-action letter authorizing the service, which fully launches in October 2026. DTCC Statement; The Block.

Senate Unanimously Approves Resolution Opposing Clemency for Sam Bankman-Fried
On July 15, the U.S. Senate approved by unanimous consent a resolution introduced by Senators Cynthia Lummis and Ruben Gallego declaring that former FTX CEO Sam Bankman-Fried should not receive executive clemency, formalizing the chamber’s opposition to any presidential pardon or commutation. The resolution states that “under no circumstances” should Bankman-Fried receive clemency, while affirming the Senate’s commitment to the rule of law and the integrity of the U.S. financial system. The bipartisan measure was introduced on June 17 after Bankman-Fried, who was convicted on seven criminal counts and sentenced to 25 years in prison, petitioned for a presidential pardon. Press Release; The Block.

President Trump Signs Executive Orders on Quantum Computing and Post-Quantum Cryptography
On June 22, President Trump signed two executive orders addressing quantum technology: one launching a national effort to accelerate quantum computing innovation, and another—”Securing the Nation Against Advanced Cryptographic Attacks”—directing an accelerated federal migration to post-quantum cryptography, including deadlines at the end of 2030 and 2031 for transitioning sensitive federal systems to quantum-resistant encryption and authentication and a requirement that federal contractors comply with quantum-resistant standards by the end of 2030. The orders respond to the risk that a sufficiently powerful quantum computer could break the public-key cryptography that secures much of today’s digital infrastructure, including blockchain networks and digital asset custody systems. Executive Order; The Block.

Ripple Secures Full MiCA CASP Authorization for Crypto Services Across 30 EEA Countries
On July 6, Ripple announced that it received authorization from Luxembourg’s Commission de Surveillance du Secteur Financier, completing its approval under the MiCA and making its end-to-end regulated crypto payments product available to financial institutions, corporates, and businesses across all 30 European Economic Area countries. The authorization follows Ripple’s preliminary approval in June. The Block.

The following Gibson Dunn lawyers contributed to this issue: Jason Cabral, Kendall Day, Jeffrey Steiner, Sara Weed, Nick Harper, Sam Raymond, Apratim Vidyarthi, Cullen Omori, Nicholas Tok, Risa Nakagawa, and Stacey Lee.

FinTech and Digital Assets Group Leaders / Members:

Ashlie Beringer, Palo Alto (+1 650.849.5327, aberinger@gibsondunn.com)

Michael D. Bopp, Washington, D.C. (+1 202.955.8256, mbopp@gibsondunn.com)

Stephanie L. Brooker, Washington, D.C. (+1 202.887.3502, sbrooker@gibsondunn.com)

Jason J. Cabral, New York (+1 212.351.6267, jcabral@gibsondunn.com)

Ella Alves Capone, Washington, D.C. (+1 202.887.3511, ecapone@gibsondunn.com)

M. Kendall Day, Washington, D.C. (+1 202.955.8220, kday@gibsondunn.com)

Sébastien Evrard, Hong Kong (+852 2214 3798, sevrard@gibsondunn.com)

William R. Hallatt, Hong Kong (+852 2214 3836, whallatt@gibsondunn.com)

Nick Harper, Washington, D.C. (+1 202.887.3534, nharper@gibsondunn.com)

Martin A. Hewett, Washington, D.C. (+1 202.955.8207, mhewett@gibsondunn.com)

Sameera Kimatrai, Dubai (+971 4 318 4616, skimatrai@gibsondunn.com)

Michelle M. Kirschner, London (+44 (0)20 7071.4212, mkirschner@gibsondunn.com)

Stewart McDowell, San Francisco (+1 415.393.8322, smcdowell@gibsondunn.com)

Hagen H. Rooke, Singapore (+65 6507 3620, hhrooke@gibsondunn.com)

Mark K. Schonfeld, New York (+1 212.351.2433, mschonfeld@gibsondunn.com)

Orin Snyder, New York (+1 212.351.2400, osnyder@gibsondunn.com)

Jeffrey L. Steiner, Washington, D.C. (+1 202.887.3632, jsteiner@gibsondunn.com)

Eric D. Vandevelde, Los Angeles (+1 213.229.7186, evandevelde@gibsondunn.com)

Sara K. Weed, Washington, D.C. (+1 202.955.8507, sweed@gibsondunn.com)

The rainmakers have been in action. No deal drought here. Bidders ABB, OCS, ECP and KKR spell out a busy summer.

KEY TAKEAWAYS

July saw nine announced UK Code deals, including two offers over £3 billion, a hostile bid, a competing bid and a reverse takeover.
Talks involving SEGRO and easyJet continued, with Prologis announcing a £14.3 billion recommended offer for SEGRO after month end on 4 August and Apollo (Eagle Bidco) soaring ahead of rival Castlelake and announcing a £5.7 billion recommended cash offer for easyJet on 6 August.
Add in KKR and ECP’s Irish Takeover Code-governed £5.75 billion offer for DCC Energy and the heat was on!

9(+80% vs. July 2025 firm offers)

Firm Offers Announced

38%(+1% vs. 2025 average)

Avg. Bid Premium

£9.03B(-£4.84B vs. June 2026)

Total Deal Value

£308.3M(-£101.75M vs. June 2026)

Median Deal Size

Rotork plc

Deal Size: £4.1B

Bidders: ABB Limited

“A” is for ABB Limited’s £4.1 billion recommended cash offer for FTSE 250 liquid and gas flow specialist Rotork plc announced on 16 July, with Swiss-based ABB also offering to acquire all of Rotork’s listed preference shares under a separate non-Code-governed scheme.

System1 Group plc

Deal Size: £43.1M

Bidders: Brave Bison Group plc

“B” is for Brave Bison Group plc’s hostile cash and share offer for System1 Group plc, announced on 30 July and valued at £43.1 million. The offer includes an all-share alternative as a result of triggering Rule 11.2 of the Code.

Mitie Group plc

Deal Size: £3.1B

Bidders: OCS Group International Limited (owned by Clayton, Dubilier & Rice)

“C” is for Clayton, Dubilier & Rice-owned OCS Group International Limited’s £3.1 billion recommended cash offer for FTSE 250 Mitie Group plc announced on 21 July.

DCC Energy plc

Deal Size: £5.75B

Bidders: Energy Capital Partners and KKR

“D” is for DCC Energy plc and the £5.75 billion recommended cash offer for it by Energy Capital Partners and KKR announced on 27 July. The offer for FTSE 100 DCC Energy is governed by the Irish Takeover Code and includes another example of a contingent value right (“CVR”).

Pharos Energy plc

Deal Size: £146.4M

Bidders: Ratio Petroleum Energy LP and Serica Energy plc

“E” is for Egypt, energy and the bid battle between Ratio Petroleum Energy LP and Serica Energy plc for Pharos Energy plc. Ratio’s £124.3 million recommended cash offer for Pharos on 24 June was trumped by Serica’s £145.7 million recommended cash offer on 26 July, only for Ratio to come back with an improved £146.4 million recommended cash offer on 7 August.

JULY AT A GLANCE

Offers Announced: July firm offers reach 9, the busiest month since the 2025 peak, with the pipeline building as possible offers jump to 7

As at 31 July 2026.

Offers by Sector (YTD): Oil, gas and chemicals drove July activity, drawing level with financial as the joint largest sector YTD

As at 31 July 2026.

Bid PremiaAs at 31 July 2026.

Financial Advisor Fees (% deal value)

As at 31 July 2026.

Public M&A

WHAT’S HAPPENED: JULY 2026

KKR and ECP complete their Irish Odyssey (or DCC)

KKR and Energy Capital Partners (“ECP”) sailed to Dublin rather than Troy, but it was still a lengthy adventure. Lookouts first spotted and outed the Consortium on 29 April, the day of its initial indicative approach to DCC Energy plc (“DCC”), the London-listed FTSE 100 international energy sales and distribution group. It was not until almost three months later, on 27 July, that the DCC board recommended the Consortium’s improved offer, which was not a wooden horse but instead a cash deal, the fixed component of which values DCC at £5.75 billion.

The recommended offer does, however, have a gift hidden inside in the form of a potential additional payment equivalent to a CVR. The additional payment is linked to the sale by DCC of its technology business Nexora. If the sale occurs within a specified time frame and net proceeds are greater than $800 million, then DCC shareholders will receive an additional 125 pence per share (with the additional consideration scaled back on a linear basis if net proceeds are under this threshold).

The Consortium’s interest in DCC was in the public domain for a full month longer than EQT’s approach to Intertek (which itself seemed long at the time, being 16 April to 18 June), highlighting the complexity involved and the trend of target boards (and bidders) showing increased patience in their efforts to get the best deal for all.

The Gibson Dunn team is proud to be assisting KKR and the Consortium with the transaction.

A merger, demerger or two mergers?

One transaction in the public domain even longer than the bid for DCC is LondonMetric Property plc and Schroder Real Estate Investment Trust Limited’s (“SREIT”) potential acquisition of Picton Property Income Limited. The initial Rule 2.4 announcements were on 24 March, and Janus, Roman god of beginnings, endings and time, would presumably have smiled on both faces when a recommended offer was finally announced on 31 July. Both faces because, under the all-share deal valuing Picton at approximately £404 million, Picton shareholders will receive shares in both LondonMetric and SREIT.

LondonMetric and SREIT have agreed to separate Picton’s assets based on which of Picton’s existing debt facilities they are subject to (Canada Life to LondonMetric and Aviva and NatWest to SREIT). Following completion, the assets allocated to LondonMetric will be carved out and transferred to it and, in return, it will transfer its shares in Picton to SREIT (such that Picton will then be wholly owned by SREIT). The result being that if a Picton shareholder continues to hold its consideration shares it will have shares in LondonMetric, which will hold part of the Picton assets and shares in the enlarged SREIT / Picton group. No wonder talks took some time. But is it a merger, a demerger or two mergers? To make it seem even more like a version of the three-cup trick, LondonMetric currently holds 11.1% of SREIT (reducing to 5.7% post-completion) and has agreed not to divest this stake for at least six months post-completion (presumably providing some additional price stability post-transaction). Make sure you watch the ball!

Bidders becoming Braver (Bisons) as well?

Is the resolve of target boards causing bidders to become braver, in particular those with existing substantial shareholdings?

The media and marketing partner, Brave Bison Group plc, lived up to its name and announced a hostile cash and share offer for System1 Group plc on 30 July. The offer values System1 at approximately £43 million, with an increased cash element as compared with its previously rejected indicative proposal.

The offer comes on the back of Glenstone REIT plc’s hostile offer for Alternative Income REIT plc last month. Brave Bison is System1’s largest shareholder at 28% (just as Glenstone is at Alternative Income with 24%). The 28% stake was acquired earlier this year mainly through a share exchange acquisition from System1’s founder, John Kearon. As a result, in a rare instance of Rule 11.2 of the Code applying, Brave Bison is required to also offer an all-share alternative to its cash and share offer (as it acquired more than 10% of the voting rights in System1 in exchange for Brave Bison shares in the relevant look-back period – normally three months but this can be extended). Brave Bison is not, however, required under Rule 11.1 of the Code to also provide an all-cash alternative even though, under Note 5, an acquisition in exchange for securities will normally be deemed to be for cash for those purposes, as the new Brave Bison shares issued to System1’s founder are subject to lock-up arrangements which will apply until after any offer has lapsed or any offer consideration has been sent to accepting shareholders.

The only problem is that System1’s business is to help marketers tap into customers’ emotions and predict the impact of adverts. So, if anyone is able to read the mood of its wider shareholders it should be System1. This is perhaps a very brave move by System1.

LOOKING AHEAD

The ancient Egyptians were used to contested takeovers

There is something about Egypt-focused oil and gas companies at the moment.

Pharos Energy plc was the first to become the target of a competitive bid situation. After receiving multiple indicative approaches earlier this year from Israel’s Ratio Petroleum Energy LP, it announced a recommended £124 million cash offer from Ratio on 24 June. It published the scheme document on 21 July (which became an important date) and convened the related shareholder meetings for 17 August. Ratio was in the seemingly strong position of having received irrevocable undertakings (in addition to undertakings from the Pharos directors) in respect of over 41% of the shares. The issue is that the undertakings are, as is usual, only “semi-hard”. Although here they are on the harder side and potentially fall away only if a competing bid is announced within a certain time of the posting of the scheme document (varying from five to 15 business days) at a price representing at least a specified premium to the Ratio offer (again varying from 15% to 20%). The stopwatch has been started. Serica Energy plc (currently one of the largest companies listed on AIM) announced a recommended £145 million cash offer, within the five-business-day window, on 26 July (and Pharos withdrew its recommendation for the Ratio bid). Ratio had 10 business days in which to match the Serica Energy offer, otherwise the irrevocables would start falling away. In a further twist to the already twisted flax, Ratio did just that, announcing an improved recommended £146.4 million cash offer on 7 August.

In the meantime, Capricorn Energy plc, which lost out earlier in the year to NEO NEXT+ Energy in the battle for Deltic Energy plc while simultaneously being the subject of approaches from Alamadiyaf al-Masiyyah for Trading LLC (a member of the Cafani Group), announced a recommended £271 million cash offer from Genel Energy plc on 2 July. The acquisition is a reverse takeover for the purposes of the UK Listing Rules and, while shareholder approval is not required, Genel would be required to apply to transfer to the Commercial Companies listing category.

Coincidentally, Capricorn (like Pharos) also published its scheme document on 21 July and convened its shareholder meetings for 18 August. Genel Energy (like Ratio) has healthy irrevocable support (39%, in addition to undertakings from Capricorn management). However, again, this did not put off interest from other parties, with Capricorn announcing on 22 July that it had received an indicative proposal from Samos Energy Ltd.

In accordance with Section 4 of Appendix 7 of the Code, the Panel, as is usual in a competitive situation, set a “put-up or shut-up” (PUSU) deadline for Samos and for Alamadiyaf al-Masiyyah of the seventh day prior to the Capricorn shareholder meetings (11 August), rather than the normal 28-day period from the Rule 2.4 announcement. Both Samos and Alamadiyaf al-Masiyyah subsequently confirmed they would not make an offer. However, again, this was not the final twist (in a now knotted flax). On 7 August, DNO ASA (the Norwegian oil and gas operator) announced it had made an indicative approach to Genel, valuing it at approximately £202 million (meaning that DNO is interested in acquiring Genel, which has made a recommended offer for Capricorn, which in turn had been looking to acquire Deltic). Genel has rejected the proposal, and DNO has a PUSU deadline of 4 September. In the meantime, Genel has the Capricorn shareholder vote to focus on.

P2P FINANCING

July saw continued momentum in the European financing markets, following June, the strongest month for leveraged loan issuance in a decade, with almost €50 billion of volume. For bidders targeting listed companies in attractive sectors with a compelling credit story, the financing window remains wide open. The clearest illustration in July was OCS Group’s £3.1 billion cash offer for rival facilities management company Mitie Group plc. OCS is owned by private equity firm Clayton, Dubilier & Rice (CD&R), which intends to combine the two businesses and has therefore secured committed financing not only to fund the acquisition but also to refinance OCS Group’s existing debt.

The £4.8 billion financing package comprises a £2.5 billion-equivalent seven-year Term Loan B (with at least £750 million to be drawn in sterling and the balance in euro), alongside a £1.5 billion bridge to senior secured notes (with at least £500 million to be drawn in sterling and the balance in euro) and an £800 million revolving credit facility. The financing demonstrates that banks remain willing to underwrite sizeable sterling exposures, while pricing of SONIA +5.00% for the sterling tranches and EURIBOR +3.75% for the euro tranches highlights the continuing pricing premium for sterling borrowings. The margins are consistent with the current market for single-B credits (where facilities management businesses would generally be expected to sit) and may even be at the tighter end of the range, given reported leverage of around 4.65x, which is relatively high for this low-margin sector.

As is customary, the financing terms are benchmarked on a “no less favourable” basis against another recent financing completed by the sponsor, in this case to fund CD&R’s 2025 acquisition of a controlling stake in consumer healthcare company Opella. However, the proposed OCS/Mitie financing is, in certain respects, even more borrower-friendly than that precedent. The list of covenant flex items is unusually extensive, allowing lenders to amend certain provisions to bring them back into line with the “Opella Precedent” if syndication has not been successfully completed within six months of the Closing Date. The areas in which the OCS/Mitie financing is more borrower friendly than the Opella Precedent include the coverage ratio test and other conditions governing use of the Restricted Payments builder basket, the treatment of asset sale proceeds and the absence of any requirement for annual management calls with lenders. The disclosed documents also reveal top-of-the-market flexibility across a number of areas, including “high-water marking” grower baskets, a general Restricted Payments basket equal to 75% of EBITDA and the ability to incur “inside maturity” Incremental Facilities of up to 200% of EBITDA.

The continued evolution of documentation in a borrower-friendly direction, despite the backdrop of geopolitical uncertainty, bodes well for prospective bidders seeking flexible financing on attractive terms.

Equity Capital Markets

July was a quieter month for the UK equity capital markets. Volex plc and Amaroq Ltd completed their step-up from AIM to the LSE’s main market on 24 July and 31 July, respectively. There were also secondary issues by Malibu Life Holdings Limited (up to approx. $125 million), Hammerson plc (£188.7 million) and Supermarket Income REIT plc (£100 million). In addition, on 31 July, the FCA published Handbook Notice 143, which sets out amendments to the PRM rules in the FCA Handbook to give effect to certain aspects of the public offers and admissions to trading regime that came into force on 19 January 2026.

ABOUT THE UK PUBLIC M&A TEAM

Gibson Dunn’s London Public M&A team advises bidders, targets and financial advisers on UK takeover transactions. We publish this monthly tracker to share what we’re seeing in the market. If you’d like to discuss any of the trends covered here, we’d be glad to hear from you.

Key Contacts:

Will McDonald Partner, London	Chris Haynes Partner, London	David Irvine Partner, London	Kavita Davis Partner, London
James Addison Of Counsel, London	Thomas Barker Of Counsel, London	Lauren Richardson Associate, London	Pete Usher Associate, London
Joe Newitt Senior Counsel, London	Lindsay Edkins Senior Counsel, London	Libby Sycamore Associate, London

Join Gibson Dunn’s trial team and NextJump’s CEOs for a recorded session where they discuss their 32-month battle against the federal government, including trial strategies and lessons learned, from the FBI’s raids and interviews to the arrests of the CEOs, the pretrial litigation strategies, and the winning victory of a full acquittal on all corruption counts in federal district court.

MCLE CREDIT INFORMATION:

This program has been approved for credit in accordance with the requirements of the New York State Continuing Legal Education Board for a maximum of 1.0 credit hours, of which 1.0 credit hours may be applied toward the areas of professional practice requirement. This course is approved for transitional/non-transitional credit.

Attorneys seeking New York credit must obtain an Affirmation Form prior to watching the archived version of this webcast. Please contact CLE@gibsondunn.com to request the MCLE form.

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California attorneys may claim “self-study” credit for viewing the archived version of this webcast. No certificate of attendance is required for California “self-study” credit.

PANELISTS:

Reed Brodsky is a partner in Gibson Dunn’s New York office and Co-Chair of the firm’s global Litigation Practice Group. One of the nation’s leading trial lawyers, Reed represents companies and executives in high-stakes white collar investigations, prosecutions, and jury trials. A former Assistant U.S. Attorney in the Southern District of New York, he recently served as lead counsel in the successful defense and ultimate acquittal of Next Jump co-CEO Meghan Messenger in a high-profile federal public corruption case.

Francesca Broggini is an associate in Gibson Dunn’s Washington, D.C. office and a member of the firm’s Litigation Department. Her practice focuses on government investigations, white collar defense, False Claims Act litigation, and securities matters. She represents companies and individuals in matters involving the Department of Justice, the Securities and Exchange Commission, and other enforcement agencies, and was a member of the trial team that secured the acquittal of Next Jump co-CEO Meghan Messenger in a federal public corruption case.

Simone Rivera is a litigation associate in Gibson Dunn’s New York office. Her practice focuses on complex commercial litigation and white collar matters. She was part of the Gibson Dunn team that represented defendants in a high-profile federal public corruption case in the U.S. District Court for the District of Columbia that resulted in acquittals.

Meghan Messenger began her journey with Next Jump as a door-to-door sales intern in 1998, and her commitment and authentic leadership have led her to the role of Co-CEO. She promotes a culture of honesty and transparency, actively discouraging LHF (lying/hiding/faking). Under her co-leadership, Next Jump has further solidified its reputation as a DDO, consistently prioritizing the growth and development of its team members. Meghan has also played a crucial role in the expansion of PerksAtWork.com, Next Jump’s flagship platform that offers employees a wide range of exclusive benefits, discounts, and perks. By championing the importance of employee well-being and engagement, Meghan has helped position Next Jump as a leader in providing holistic solutions to enhance the workplace experience. Alongside Charlie, Meghan co-teaches the ‘Leadership in Practice’ class, providing real-life leadership lessons derived from their collective experiences. She has also been instrumental in launching the second business focused on technology and coaching modules that assess and train decision-making skills. Meghan’s unique insights and understanding of 21st-century workplace challenges have made her a regularly invited speaker, promoting success through authenticity and development-centric strategies.

Charlie Kim, established Next Jump in his college dorm room in 1994, and led the company from the brink of the dot-com bust to become a technology giant. Next Jump has two businesses: PerksAtWork.com, an innovative platform that revolutionizes employee benefits and perks which is used by the majority of the Fortune 1000 plus 10s of thousands of small and medium size businesses; NextJump.com, Next Jump’s leadership and decision-making business. The second business originated from a social movement to share their own practices in adult development. Over the course of two decades, they ended up helping 10K+ companies across almost every industry and became a point of access to the largest “in practice” hub of challenges and insights at a global level. In 2016, Charlie’s leadership guided Next Jump to be recognized by Harvard as the future of work, which in their research is the company that trains and develops their employees better than anyone. They called these organizations: Deliberately Developmental Organizations (DDOs), recognizing Next Jump as 1 of 2 companies in the world, published in a book titled “An Everyone Culture.” In 2018, Next Jump commercialized their second business signing the U.S. Navy as their first client, focusing on technology and coaching modules designed to measure and enhance individuals’ and teams’ decision-making abilities — the most critical skill for the 21st-century workplace. Charlie’s philosophy, Better Me + Better You = Better Us, underpins the core principle of valuing and developing human capital. This unique blend of leadership and hands-on experience makes Charlie a highly sought-after speaker across various industries.

This update highlights key takeaways from CFIUS’s most recent annual report and provides our team’s perspectives on U.S. foreign direct investment review and enforcement trends.

On August 7, 2026, the Committee on Foreign Investment in the United States (CFIUS or the Committee) released its annual report covering calendar year 2025 (the Annual Report). The Annual Report covers the first year of the second Trump Administration and follows the implementation of the America First Investment Policy (discussed in detail in our previous client alert), and accordingly offers the first comprehensive data set against which to measure that policy’s stated goal of streamlining review for allied investors while sharpening scrutiny of investment from foreign adversary countries. In short, the Annual Report reflects consistency with CFIUS reviews in prior years—demonstrating that policies implemented by the Trump Administration did not substantively move the needle during calendar year 2025.

Below, we summarize the Annual Report’s principal data points—filing volumes, declaration usage, mitigation, enforcement, and non-notified activity—and situate them against the policy and rulemaking developments of 2025 and compliance trends of 2026 to date.

1. CFIUS Filing Volumes in 2025 Rose Slightly Against a Recovering M&A Market

The Committee reviewed a total of 347 filings in 2025, consisting of 207 notices and 140 declarations. That represents a 7 percent increase in total filings from 2024 and brings the number of filings to slightly above 2023 numbers, after a brief dip in 2024.

Year-Over-Year Comparison of the Number of CFIUS Filings

Filing Type	2021	2022	2023	2024	2025 (Δ from 2024)
Notices	272	286	233	209	207 (↓~1%)
Declarations	164	154	109	116	140 (↑~21%)
Total Filings	436	440	342	325	347 (↑~7%)
Distinct Transactions	354	337	287	277	274 (↓~1%)

Source: CFIUS Annual Reports to Congress, CY 2021–CY 2025. Distinct transactions are derived, not reported: total filings less notices withdrawn and re-filed in the same calendar year (52 in 2021, 53 in 2022, 35 in 2023, 31 in 2024, 37 in 2025) less declarations that resulted in a request to file a written notice (30 in 2021, 50 in 2022, 20 in 2023, 17 in 2024, 36 in 2025).

As in prior years, the raw filing count overstates the number of distinct transactions reviewed by the Committee because the notice total includes transactions subject to more than one notice (e.g., where a notice was withdrawn and refiled) as well as declarations that resulted in a request to file a full written notice. After accounting for those duplicates, the Committee would have reviewed approximately 274 distinct transactions in 2025 (representing a marginal drop from the number of distinct transactions reviewed in 2024).

The 2025 filing data should be read against a pronounced rebound in deal activity. S&P Global Market Intelligence recorded $3.13 trillion in global M&A value for 2025.[1] Other providers, applying broader methodologies, put the 2025 total nearer $4.8 trillion—an increase of 36 to 41 percent over 2024 and the second-highest annual total on record, behind only 2021.[2] Deal value for U.S. target companies alone approached $2.6 trillion.[3] Inbound investment rose at least as sharply. Expenditures by foreign direct investors to acquire, establish, or expand U.S. businesses totaled $232.2 billion in 2025, an increase of $76.8 billion, or 49.5 percent, over the $151.0 billion recorded in 2024.[4] Acquisitions of existing U.S. businesses accounted for $218.4 billion of that total, with $4.6 billion spent to establish new U.S. businesses and $9.2 billion to expand existing foreign-owned businesses.[5]

Notably, parties submitting draft notices in 2025 received comments from CFIUS within an average of approximately 5.35 business days, and the Committee averaged 3.44 business days to accept a formal written notice. These averages should be read with the 43-day government shutdown in late 2025 in mind. Acceptance and adjudication of CFIUS filings were formally stalled during the shutdown, and most external-facing deadlines were tolled, leaving transaction parties with extended deal timelines and, in some cases, closing prior to obtaining approvals. The Annual Report notes that statutory case deadlines were tolled during the lapse in appropriations and that timeline figures have been calculated net of days tolled.

2. Declarations Remain a Viable Path for Certain Types of Transactions but Risk Delaying Transaction Closings for Others

Of the 140 declarations submitted in 2025, 51 (~36 percent) were mandatory filings and 7 were real estate filings under Part 802. The Committee cleared 92 declarations (~66 percent), requested a full written notice in 36 instances (~26 percent), was unable to conclude action in 11 instances (~8 percent), and rejected no declarations. One declaration was withdrawn.

The Committee’s approximately 66 percent clearance rate was lower than both 2024 (~78 percent) and 2023 (~76 percent). The rate of requests for written notice, at approximately 26 percent, was the highest in three years (~15 percent in 2024 and ~18 percent in 2023). Filers considering whether to file a declaration or notice should keep these statistics in mind, as having to re-file a declaration as a notice and restarting the review clock may ultimately result in a longer review period than filing a notice initially.

Committee Disposition of Declarations

Committee Action	Number of Declarations (140 total)
Clearance	92 (~66%)
Request Parties File a Written Notice	36 (~26%)
Unable to Conclude Action	11 (~8%)
Rejected	0

3. Mitigation Agreements Remain a Key Tool for CFIUS

CFIUS required mitigation in 15 transactions in 2025, compared to 16 transactions in 2024 and 35 in 2023. As of the end of 2025, the Committee was actively monitoring 234 ongoing mitigation agreements and conditions, down from 242 at the end of 2024. The Committee conducted 40 site visits during the year, down from 79 in 2024.

Mitigation Activity, 2023–2025

Metric	2023	2024	2025
Transactions Requiring Mitigation	35	16	15
Total Agreements/ Conditions Monitored (Year-End)	246	242	234
New Agreements Adopted	36	17	17
Agreements Terminated	15	25	23
Site Visits Conducted	43	79	40

Source: CFIUS Annual Reports to Congress, CY 2023–CY 2025. “Transactions Requiring Mitigation” reflects notices for which CFIUS concluded action after adopting a mitigation agreement. “New Agreements Adopted” reflects mitigation agreements adopted with respect to notices of covered transactions, including agreements in transactions where the parties withdrew their notice and agreed to abandon the transaction.

Although the numbers do not indicate a material difference from prior years, the Committee has signaled a desire to be more strategic in mitigation agreements and to avoid what had been a growing number of potentially complex and open-ended agreements (as described in our previous client alert). That is not to say that the Committee is unwilling to employ potentially costly and intrusive mitigation measures in certain circumstances. Among the Annual Report’s examples of mitigation measures implemented in 2025 are the establishment of proxy boards, segregation of computer networks, frequent government reporting requirements, and data storage location restrictions, among others.

4. Trump Administration Puts Its Mark on Multiple CFIUS Initiatives

Despite relative consistency with previous years across relevant filing metrics, the Trump Administration has nevertheless attempted to influence CFIUS policies and procedures to align with its broader national security objectives.

Introduced in February 2025, the America First Investment Policy signaled an intent to streamline review for investors from allied countries and stated that the administration would “cease the use of overly bureaucratic, complex, and open-ended ‘mitigation’ agreements for United States investments from foreign adversary countries.” Despite the stated aims of reducing investor uncertainty and administrative burden, the 2025 mitigation figures (as noted above) remain consistent with 2024, though they represent a notable shift from 2023.

The Known Investor Program (KIP) announced in May 2025 (discussed in detail in our previous client alert) represents another effort by the Trump Administration to streamline CFIUS review for certain frequent filers. That effort was supplemented by the pre-filing consultation function added to the revamped CFIUS website in July 2026—each initiative aimed at engaging filers earlier and reducing the burden on transactions that present minimal national security risk.

The Annual Report also arrives amid a deliberate transparency push by the Committee. In an April 2026 speech, Assistant Secretary for Investment Security Chris Pilkerton expressed a desire to “increase our focus on customer service” by “demystify[ing] the process and increas[ing] transparency and predictability for filers.” On July 29, 2026, CFIUS issued a Risk Matrix identifying eight categories of transactions that pose elevated national security risks—critical infrastructure, cybersecurity, information security, personal data security, product integrity, proximity concerns, supply assurance, and technology transfer—and providing sample mitigation measures the Committee has imposed across sectors, as discussed in our recent client alert.

The Annual Report also highlighted the July 2025 Memorandum of Understanding between the U.S. Department of the Treasury and the U.S. Department of Agriculture (USDA), formalizing USDA’s role in CFIUS reviews in which agricultural equities are at stake and addressing a long-standing concern of certain CFIUS critics.

5. Enforcement: No Publicly Announced Penalties, but CFIUS Remains Vigilant

The Committee did not publicly announce any civil monetary penalties in 2025, compared to a record five publicly announced penalties in 2024 (four for breaches of material provisions of mitigation agreements and one for material misstatements in a notice and supplemental information). The Committee also reported two formal determinations of noncompliance (so-called “DONT Letters”) with mandatory filing requirements. The lack of publicly announced penalties does not, however, indicate that CFIUS enforcement is necessarily down. As noted in the Annual Report, the Committee continues to “receive and act on” voluntary self-disclosures regarding failures to file mandatory declarations and other violations.

Moreover, two presidential decisions were issued in 2025, one requiring the divestment of Jupiter Systems, LLC (Jupiter Systems) by China-based Suirui International Co., Limited and affiliates (collectively Suirui) and one novel determination to overturn President Biden’s decision to block the proposed acquisition of United States Steel Corporation (U.S. Steel) by Japan-based Nippon Steel Corporation.

While the U.S. Steel acquisition progressed with mitigation measures imposed, the Jupiter Systems divestment resulted in the first action by a federal district court to enforce a presidential divestment order. As discussed in our previous client alert, when Suirui failed to meet the divestiture deadline, the U.S. government sought injunctive relief. The district court granted the government’s request and appointed a receiver to take control of the assets of Jupiter Systems. Although an appeal is pending, the case demonstrates the government’s willingness and ability to impose its authority on companies seeking to evade the Committee’s requirements.

6. Non-Notified Reviews Remain a Central Focus

In 2025, CFIUS continued to review thousands of transactions for potential non-notified concerns and, consistent with recent years, initiated non-notified reviews for 90 transactions. Of these transactions, CFIUS opened 62 formal inquiries and requested filings for 9 cases. In two additional instances, parties received non-notified outreach and voluntarily filed a declaration or notice before receiving a formal request.

Non-Notified Inquiries, 2022–2025

Non-Notified Metric	2022	2023	2024	2025
Non-Notified Investigations	Not disclosed	Not disclosed	98	90
Formal Inquiries Opened	84	60	76	62
Filings Requested (%)	11 (~13%)	13 (~22%)	12 (~16%)	9 (~15%)
Voluntary Filings After Outreach	Not disclosed	3	5	2

Source: CFIUS Annual Reports to Congress, CY 2022–CY 2025.

These numbers support Assistant Secretary Pilkerton’s statement during his 2025 confirmation hearing that reviews of non-notified transactions would remain a priority for the administration. The aforementioned Risk Matrix also carries an implicit warning on this point by taking a broad view of potential national security risk across various commercial sectors. In recent years, the Committee has shown an increasing willingness to exercise its review authority through non-notified outreach, and parties to transactions should carefully weigh the non-notified risk before electing to forgo a voluntary filing.

7. Japan, the UAE, and Canada Lead in Distinct Transactions, but China Again Leads in Total Notices

The Finance, Information, and Services (FIS) sector accounted for approximately 50 percent, or 99 of the 200 non-real estate notices reviewed in 2025. Of these 200 notices, 166 involved acquisitions of U.S. critical technology businesses.

Measured by distinct transactions (i.e., counting only once those transactions that originated as a declaration and were then also filed as a notice, or notices that were refiled), the top notice filers in 2025 were Japan, the United Arab Emirates, and Canada. In terms of overall total notices, however, China retained the top spot for most notices, with 33 total notices, up from 26 in 2024. This trend underscores that Chinese investment in U.S. companies remains possible but subject to elevated scrutiny by CFIUS given the Committee’s stated concern regarding “foreign economic, industrial, and cyber espionage” by China and other foreign actors, as discussed in the Annual Report.

The Annual Report underscores that CFIUS remains an important national security tool that the Trump Administration, in line with previous administrations, continues to wield to address national security concerns. Transaction parties should remain aware of the significant implications that CFIUS considerations can have on a variety of transactions and should proactively plan to address such issues early in the deal timeline. We expect the enforcement trends, non-notified reviews, and focus on using CFIUS to address national security issues across a wide variety of industries to continue in the months and years to come.

[1] S&P Global Market Intelligence, “Global Private Equity Deal Value Up 20% in 2025” (Jan. 2026), https://www.spglobal.com/market-intelligence/en/news-insights/articles/2026/1/global-private-equity-deal-value-up-20-in-2025-96746998 (reporting that the total value of global M&A reached $3.13 trillion in 2025).

[2] Bain & Company, “Global M&A Stages Great Rebound in 2025 with $4.8 Trillion Deal Value to Mark Second-Highest Total on Record” (Dec. 11, 2025), https://www.bain.com/about/media-center/press-releases/20252/global-ma-stages-great-rebound-in-2025-with-$4.8-trillion-deal-value-to-mark-second-highest-total-on-record (reporting a projected $4.8 trillion, up 36 percent versus 2024); see also Jinny Choi et al. PitchBook 2025 Annual Global M&A Report (Jan. 30, 2026), https://pitchbook.com/news/reports/2025-annual-global-m-a-report (reporting nearly $5 trillion across an estimated 50,810 transactions, with deal value up 37 percent and deal count up 12.4 percent year over year).

[3] Bloomberg Law, “Analysis: 2025 Was the Year That Reignited Global M&A” (Jan. 16, 2026), https://news.bloomberglaw.com/bloomberg-law-analysis/analysis-2025-was-the-year-that-reignited-global-m-a (reporting deal value for U.S. target companies of approximately $2.6 trillion).

[4] U.S. Bureau of Economic Analysis, “New Foreign Direct Investment in the United States, 2025” (June 10, 2026), https://www.bea.gov/news/2026/new-foreign-direct-investment-united-states-2025 (reporting preliminary statistics released in June 2026).

[5] Id. (“Planned total expenditures, which include both first-year and planned future expenditures, were $284.5 billion.”).

The following Gibson Dunn lawyers prepared this update: Bill Huesken, Stephenie Gosnell Handler, Chris Mullen, and David Wolber.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these issues. For additional information about how we may assist you, please contact the Gibson Dunn lawyer with whom you usually work, the authors, or the following leaders and members of the firm’s International Trade Advisory & Enforcement practice group:

United States:
Adam M. Smith – Co-Chair, Washington, D.C. (+1 202.887.3547, asmith@gibsondunn.com)
Ronald Kirk – Co-Chair, Dallas (+1 214.698.3295, rkirk@gibsondunn.com)
Stephenie Gosnell Handler – Washington, D.C. (+1 202.955.8510, shandler@gibsondunn.com)
Donald Harrison – Washington, D.C. (+1 202.955.8560, dharrison@gibsondunn.com)
Christopher T. Timura – Washington, D.C. (+1 202.887.3690, ctimura@gibsondunn.com)
Matthew S. Axelrod – Washington, D.C. (+1 202.955.8517, maxelrod@gibsondunn.com)
David P. Burns – Washington, D.C. (+1 202.887.3786, dburns@gibsondunn.com)
Nicola T. Hanna – Los Angeles (+1 213.229.7269, nhanna@gibsondunn.com)
Courtney M. Brown – Washington, D.C. (+1 202.955.8685, cmbrown@gibsondunn.com)
Samantha Sewall – Washington, D.C. (+1 202.887.3509, ssewall@gibsondunn.com)
Roxana Akbari – Orange County (+1 949.475.4650, rakbari@gibsondunn.com)
Karsten Ball – Washington, D.C. (+1 202.777.9341, kball@gibsondunn.com)
Sarah Burns – Washington, D.C. (+1 202.777.9320, sburns@gibsondunn.com)
Hugh N. Danilack – Washington, D.C. (+1 202.777.9536, hdanilack@gibsondunn.com)
Justin duRivage – Palo Alto (+1 650.849.5323, jdurivage@gibsondunn.com)
Bill Huesken – Denver (+1 303.298.5948, bhuesken@gibsondunn.com)
Dorkas Laura Medina – Washington, D.C. (+1 202.777.9444, dmedina@gibsondunn.com)
Chris R. Mullen – Washington, D.C. (+1 202.955.8250, cmullen@gibsondunn.com)
Sarah L. Pongrace – New York (+1 212.351.3972, spongrace@gibsondunn.com)
Anna Searcey – Washington, D.C. (+1 202.887.3655, asearcey@gibsondunn.com)
Erika Suh Holmberg – Washington, D.C. (+1 202.777.9539, eholmberg@gibsondunn.com)
Audi K. Syarief – Washington, D.C. (+1 202.955.8266, asyarief@gibsondunn.com)
Scott R. Toussaint – Washington, D.C. (+1 202.887.3588, stoussaint@gibsondunn.com)
Shuo (Josh) Zhang – Washington, D.C. (+1 202.955.8270, szhang@gibsondunn.com

Asia:
Kelly Austin – Denver/Hong Kong (+1 303.298.5980, kaustin@gibsondunn.com)
David A. Wolber – Hong Kong (+852 2214 3764, dwolber@gibsondunn.com)
Fang Xue – Singapore (+65 6507 3692, fxue@gibsondunn.com)
Qi Yue – Beijing (+86 10 6502 8534, qyue@gibsondunn.com)
Dharak Bhavsar – Hong Kong (+852 2214 3755, dbhavsar@gibsondunn.com)
Soo-Min Chae – Singapore (+65 6507 3632, schae@gibsondunn.com)
Hui Fang – Hong Kong (+852 2214 3805, hfang@gibsondunn.com)
Arnold Pun – Hong Kong (+852 2214 3838, apun@gibsondunn.com)

Europe:
Attila Borsos – Brussels (+32 2 554 72 10, aborsos@gibsondunn.com)
Patrick Doris – London (+44 207 071 4276, pdoris@gibsondunn.com)
Michelle M. Kirschner – London (+44 20 7071 4212, mkirschner@gibsondunn.com)
Penny Madden KC – London (+44 20 7071 4226, pmadden@gibsondunn.com)
Irene Polieri – London (+44 20 7071 4199, ipolieri@gibsondunn.com)
Benno Schwarz – Munich (+49 89 189 33 110, bschwarz@gibsondunn.com)
Nikita Malevanny – Munich (+49 89 189 33 224, nmalevanny@gibsondunn.com)
Melina Kronester – Munich (+49 89 189 33 225, mkronester@gibsondunn.com)
Vanessa Ludwig – Frankfurt (+49 69 247 411 531, vludwig@gibsondunn.com)

This is, in our view, intended as a pointed reminder to the market that the SFC expects licensed corporations to maintain robust cybersecurity frameworks – and is willing to take action against firms whose frameworks fail to meet their expectations, even if clients are not directly affected.

On July 28, 2026, the Securities and Futures Commission (SFC) reprimanded and fined Luk Fook Securities (HK) Limited (LFSHK) HK$2.1 million for failing to implement adequate and effective cybersecurity control measures.[1] While the fine itself is not large, this matter is notable given that it is the first known example of the SFC taking disciplinary action against a licensed corporation because of a cyberattack against the firm’s trading systems. Importantly, the SFC took action notwithstanding the absence of client asset misappropriation, unauthorized trading, client complaints or client financial loss – factors which the SFC treated as mitigating rather than exculpatory. This is, in our view, intended as a pointed reminder to the market that the SFC expects licensed corporations to maintain robust cybersecurity frameworks – and is willing to take action against firms whose frameworks fail to meet their expectations, even if clients are not directly affected.

I. SFC ENFORCEMENT ACTION

LFSHK is licensed to carry on Type 1 (dealing in securities), Type 4 (advising on securities) and Type 9 (asset management) regulated activities. During the COVID-19 pandemic, LFSHK enabled remote working through a VMware virtual environment, which allowed employees, third-party vendors, and IT staff to access office systems remotely.

On September 19, 2022, a hacker exploited the VMware environment to gain access to LFSHK’s Active Directory (AD) server. The SFC described the resulting disruption to LFSHK’s critical IT infrastructure as sweeping, extending to its file servers, domain controllers, email servers, trading application servers and accounting servers. Throughout the resulting disruption, LFSHK’s clients lost access to both its internet and mobile trading channels, leaving orders placed through account executives as the only available route to market. Full restoration was achieved only on October 7, 2022, approximately three weeks after the attack, with systems brought back online in stages.

LFSHK reported the incident to the SFC on the day of the attack and engaged external experts, including an independent reviewer at the SFC’s request, to investigate the incident and assess its internal controls. The SFC found no evidence of client asset misappropriation, unauthorized trading, financial loss, data leakage, or client complaints.

However, the SFC’s investigation revealed various cybersecurity deficiencies across LFSHK’s IT environment, as follows:

Insufficient Network Security Controls: A number of LFSHK’s network devices and equipment lacked firewall protection and were not monitored by a Security Information and Event Management tool. This left the network exposed to external threats and enabled the attacker to access an internal system directly from the Internet.
Inadequate User Access and Privileged Account Management: LFSHK failed to establish effective controls over user access and privileged accounts, heightening the risk that a single compromised account could be used to move laterally across the network.
Use of Unsupported Legacy Systems: The infected VMware environment was running outdated operating systems (Microsoft Windows 2008 and Windows 7) that did not receive security updates and were incompatible with modern endpoint protection. This left critical vulnerabilities unpatched and exposed to exploitation.
Outdated Antivirus Protection: Antivirus signatures on LFSHK’s AD server were approximately one year out of date, which directly undermined their ability to detect and prevent malware such as ransomware.
Inadequate Controls over Remote Access: LFSHK did not implement sufficient controls for remote access, such as two-factor authentication, proper access restrictions, device security, and remote device management. These gaps increased the risk of unauthorized access.
Poor Password Management Practices: LFSHK staff did not receive effective training regarding password management, nor did LFSHK have effective policies with regards to management of passwords by staff. Additionally, system account credentials were stored in an unencrypted Excel file on the AD server, which created a critical vulnerability that attackers likely exploited to further compromise the network.
Lack of Controls over External Device Security: LFSHK did not restrict or monitor the use of USB devices, allowing users to connect external storage devices without oversight. This exposed the firm’s network to the risk of malware introduction and propagation.
Insufficient Cybersecurity Awareness Training: The last cybersecurity training session had been held in 2018 and focused solely on two-factor authentication for the trading system. No further training or regular updates were provided, which left staff unprepared for evolving cyber threats.

The SFC further found that LFSHK’s recovery was significantly delayed due to deficiencies in its business continuity and data backup arrangements. Daily data backups were stored on an external hard drive that was not consistently disconnected from the network, resulting in the compromise of backup files. LFSHK’s business continuity plan was inadequate, having failed to address specific scenarios such as ransomware attacks. Moreover, LFSHK had not established policies for incident management, data security, or record retention.

The SFC found that LFSHK’s cybersecurity failures breached requirements under the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission (Code of Conduct)[2] and the Guidelines for Reducing and Mitigating Hacking Risks Associated with Internet Trading (Cybersecurity Guidelines).[3] In summary, the Code of Conduct requires licensed corporations to exercise due skill, care and diligence, maintain adequate resources and controls, comply with regulatory requirements, ensure the security and resilience of electronic trading systems, and implement appropriate cybersecurity, contingency, staffing and documentation measures. The Cybersecurity Guidelines additionally obligate licensed corporations to maintain secure network infrastructure, robust access and remote-access controls, timely patch management, effective endpoint protection, adequate backup and recovery arrangements, cybersecurity contingency plans, and ongoing staff cybersecurity training.

In determining the sanction, the SFC took into account a number of mitigating factors, including LFSHK’s self-report, its co-operation in resolving the SFC’s concerns, the reviews it conducted to identify the root causes and extent of its failings (including the appointment of the independent reviewer), the remedial steps taken to prevent recurrence, the absence of evidence of client loss, and its clean disciplinary record.

II. KEY TAKEAWAYS

The LFSHK enforcement action should be viewed against the SFC’s broader focus on operational resilience and cyber risk management. The SFC’s Cybersecurity Guidelines, supplemented by the Circular on Management of Cybersecurity Risks Associated with Remote Office Arrangements,[4] set out detailed expectations for licensed corporations in areas including network security, access management, patch management, endpoint protection, data backup, and staff training.

More recently, the SFC has intensified its supervisory focus on cybersecurity risk:

In February 2025, the SFC published its report on the 2023/24 thematic cybersecurity review of licensed corporations, which identified control deficiencies relating to two-factor authentication for system login, security patch management, and the use of end-of-life software and unpatched VPN solutions. The report noted that phishing attacks remain the most common form of cyberattack, with large-scale SMS phishing campaigns targeting clients of internet brokers and VASPs.[5]
On June 2, 2026, the SFC reminded licensed virtual asset service providers (VASPs) and their associated entities to review and strengthen their cybersecurity measures in light of heightened risks posed by artificial intelligence (AI)-enabled cyberattacks.[6]
On July 9, 2026, the SFC issued a further circular to licensed corporations and VASPs to strengthen cybersecurity controls by implementing robust authentication measures and effective monitoring to detect suspicious activities. This includes undertaking phishing-resistant authentication (e.g., passkeys and bound devices), transaction and login monitoring, incident response and reporting procedures, as well as client education on phishing risks.[7]

Viewed in this context, the LFSHK enforcement action is not an isolated response to a ransomware incident, but part of an increasingly proactive strategy by the SFC to drive higher cybersecurity standards across the financial sector that addresses emerging threats, third-party dependencies and sector-wide cyber risk. Licensed corporations should therefore expect continued scrutiny by the SFC of their cybersecurity controls, outsourcing arrangements, incident response capabilities and senior management oversight.

Two further features of this case merit attention. First, the SFC’s action came almost four years after the September 2022 attack – a reminder that cyber incidents carry a long enforcement tail, and that incident records, board and committee minutes and vendor correspondence need to be retained and retrievable well beyond ordinary retention periods. That point is sharpened by the SFC’s criticism of LFSHK for having established no record retention policy at all. Second, the independent reviewer appointed at the SFC’s request both supplied much of the evidential foundation for the SFC’s findings. Firms asked to appoint a reviewer following an incident should therefore consider at the outset the reviewer’s scope, the basis on which findings will be reported, and the management of privilege, since that output is likely to shape both the regulatory outcome and any follow-on exposure.

The SFC did not pursue any individuals in this case. Firms should not read that as a settled position. The SFC’s June 2026 circular cited primary responsibility for cyber resilience with senior management and highlighted the role of the Manager-In-Charge of Information Technology, and we would expect questions of individual accountability to feature in future cases of this kind.

Given this, we recommend that licensed corporations proactively review their cybersecurity frameworks against the SFC’s requirements and expectations to identify potential deficiencies which could be the subject of criticism or action by the SFC. In particular, we recommend that firms benchmark their frameworks against each of the eight areas of deficiency identified in the SFC’s findings, together with the business continuity and data backup failings described above. Additionally, firms that have not already taken action to comply with the SFC’s June 2026 circular on AI-enabled cyberattacks and July 2026 circular on authentication and monitoring should ensure that they take prompt action to do so. This is particularly important given that while the SFC observed that no client losses occurred as a result of the LFSHK cybersecurity attack, the July circular warned that firms may be held accountable for client losses resulting from inadequate measures to prevent, detect or stop large-scale unauthorized transactions following hacking incidents.

[1] SFC reprimands and fines Luk Fook Securities (HK) Limited $2.1 million for inadequate cybersecurity control to fend off cyberattack, published by the Securities and Futures Commission on July 28, 2026, accessible at: https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=26PR118.

[2] Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission, published by the Securities and Futures Commission in January 2026, accessible at: https://www.sfc.hk/-/media/EN/assets/components/codes/files-current/web/codes/code-of-conduct-for-persons-licensed-by-or-registered-with-the-securities-and-futures-commission/Code_of_conduct-Dec-2025_Eng-Final-with-Bookmark_Jan-2026.pdf?rev=8768a10c17c44385ab1ad8c0a29d2844.

[3] Guidelines for Reducing and Mitigating Hacking Risks Associated with Internet Trading, published by the Securities and Futures Commission on October 27, 2017, accessible at: https://www.sfc.hk/-/media/EN/assets/components/codes/files-current/web/guidelines/guidelines-for-reducing-and-mitigating-hacking-risks-associated-with-internet-trading/guidelines-for-reducing-and-mitigating-hacking-risks-associated-with-internet-trading.pdf?rev=eb44681c436548c1bb37092f2145f45c.

[4] Circular on Management of Cybersecurity Risks Associated with Remote Office Arrangements, published by the Securities and Futures Commission on April 29, 2020, accessible here.

[5] Report on the 2023/24 thematic cybersecurity review of licensed corporations, published by the Securities and Futures Commission in February 2025, accessible at: https://www.sfc.hk/-/media/EN/files/IS/publications/Cybersecurity-thematic-review-report-20250206ENG-Final–Clean.pdf?rev=fb76dfc008ab49c48d3a6d9a937160f2.

[6] Circular to licensed corporations, SFC-licensed virtual asset service providers and associated entities: Enhanced cybersecurity measures to address evolving risks arising from artificial intelligence-enabled cyberattacks, published by the Securities and Futures Commission on June 2, 2026, accessible here. See also Hong Kong Regulators Call for Strengthened Cyber Resilience Against AI-Enabled Cyber Threats, published by Gibson, Dunn & Crutcher dated June 10, 2026, accessible at: https://www.gibsondunn.com/hong-kong-regulators-call-for-strengthened-cyber-resilience-against-ai-enabled-cyber-threats/.

[7] Circular to licensed corporations and SFC-licensed virtual asset service providers: Implementing (i) robust authentication methods to reduce and mitigate hacking risks from phishing attacks and (ii) adequate monitoring and surveillance measures to identify suspicious activities, published by the Securities and Futures Commission on July 9, 2026, accessible here.

The following Gibson Dunn lawyers prepared this update: William Hallatt, Emily Rumble, and Jane Lu.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. If you wish to discuss any of the matters set out above, please contact any member of Gibson Dunn’s Financial Regulatory team, including the following members in Hong Kong:

William R. Hallatt (+852 2214 3836, whallatt@gibsondunn.com)

Emily Rumble (+852 2214 3839, erumble@gibsondunn.com)

Arnold Pun (+852 2214 3838, apun@gibsondunn.com)

Becky Chung (+852 2214 3837, bchung@gibsondunn.com)

Jane Lu (+852 2214 3735, jlu@gibsondunn.com)

Gibson Dunn’s Workplace DEI Task Force aims to help our clients navigate the evolving legal and policy landscape following recent Executive Branch actions and the Supreme Court’s decision in SFFA v. Harvard. Prior issues of our DEI Task Force Update can be found in our DEI Resource Center.

Key Developments

On August 6, the Department of Justice’s Civil Rights Division announced its investigative findings that Duke University School of Law intentionally discriminated on the basis of race in admissions decisions for its incoming classes (2023–2025), in violation of Title VI of the Civil Rights Act of 1964, as interpreted by the U.S. Supreme Court in SFFA v. Harvard. Its investigation found that following the SFFA decision, Duke Law undertook a “deliberate effort to preserve race-based outcomes,” through revising its mission statement to reference a commitment to diversity of perspective and experience; inviting applicants to address that mission statement through short-answer essays; instructing admissions reviewers to “tag” responses to these short-answer questions with a “Diversity/Services” tag as well as to use tags to capture specific applicant characteristics that are, according to DOJ, commonly correlated with race, such as being a Pell grant recipient. According to the Department, these practices allowed admissions reviewers “to highlight applicant information that could be used to advance Duke Law’s racial diversity goals,” resulting in “a substantially higher likelihood of admission” for Black and Hispanic applicants as compared to white and Asian applicants with comparable academic credentials.

On August 4, the House of Delegates of the American Bar Association (“ABA”) voted to uphold Standard 206, the accreditation standard requiring law schools to demonstrate a commitment to diversity and inclusion. Soon thereafter, the House passed a second resolution that would allow the Council of the Section of Legal Education and Admissions to the Bar (“the Council”) to override the House of Delegates’ vote and remove the Standard, rendering the first vote effectively moot. The Council, which will meet later this month, is expected to repeal Standard 206 ahead of a September hearing before the U.S. Department of Education’s National Advisory Committee on Institutional Quality and Integrity. The votes likely reflect the ABA’s effort to respond to the Trump Administration’s threats to strip the ABA of its law school accreditation authority.

On July 23, the U.S. Department of Education’s Office for Civil Rights (“OCR”) announced that it is rescinding several disparate-impact provisions from the Department’s regulations implementing Title VI of the Civil Rights Act of 1964. OCR characterized the rescission as a deregulatory action taken in accordance with Executive Order (“EO”) 14281, issued in April 2025, which directed federal agencies to eliminate the use of disparate-impact liability. According to OCR, disparate-impact laws and regulations permit demographic data alone to establish a Title VI violation, even absent a facially discriminatory practice or discriminatory intent, which OCR argues has effectively required educational institutions to consider race and engage in racial balancing to comply with federal civil rights law. OCR asserts that removing these provisions aligns its regulations with Title VI’s statutory text. The action follows the Department of Justice’s December 2025 revision of its own Title VI regulations eliminating disparate-impact liability. OCR noted that Title VI continues to prohibit discrimination based on race, color, and national origin in federally funded educational programs.

On July 23, the University of Pennsylvania and the U.S. Equal Employment Opportunity Commission (“EEOC”) reached a resolution regarding the EEOC’s subpoena for information relating to the agency’s investigation into allegations that the school subjected faculty and staff to antisemitic harassment, failed to effectively address complaints of harassment, failed to take prompt and effective measures to end harassment, and allowed harassment to escalate. The subpoena requested, among other things, the identification of and contact information for witnesses to and victims of the religious-based harassment. It also sought the identification of and contact information for employees who have filed discrimination complaints relating to their Jewish faith, those who belong to Jewish clubs or campus groups, and anyone who works in the University’s Jewish studies program. In a joint stipulation of dismissal, the EEOC stated “that it will not take any further measures to enforce the subpoena” or the court’s March order requiring the University’s compliance in exchange for the University’s withdrawal of its appeal of the March decision. The EEOC also added that it would not “otherwise seek . . . any material sought by the subpoena[] during the pendency of the EEOC’s administrative investigation.” The case is EEOC v. Trustees of the University of Pennsylvania, No. 25-6502 (E.D. Pa. 2025).

On July 21, the EEOC announced it had voted to issue a Notice of Proposed Rulemaking that would rescind employers’ legal obligations to collect and file annual reports regarding workforce demographic data—moving one step closer to rescinding disclosure requirements that have been in place for 60 years. The proposal would rescind EEO-1 reporting requirements, which require private-sector employers with 100 or more employees and federal contractors with 50 or more employees to submit to the EEOC annual reports on workforce demographics. It also would eliminate EEO-2, EEO-3, EEO-4, EEO-5, and EEO-6 data collections from unions, state and local governments, public schools, and higher-education institutions, respectively. According to reporting by PBS, former Democratic EEOC commissioners and civil rights organizations have said the proposal will deprive the agency of a critical tool for uncovering discrimination patterns and measuring progress made by women and racial minorities since the passage of the 1964 Civil Rights Act. EEOC Chair Andrea Lucas stated that the reporting regime “may promote stereotyping at work, and may encourage employers to engage in discrimination,” due to the “mistaken view that it is permissible for employers to take race- and sex-based actions to correct statistical imbalances.” A 63-page draft Notice of Proposed Rulemaking was posted on the Federal Register on July 30 for a 30-day comment period, after which agency leadership will convene again to potentially finalize the rule.

On July 3, the U.S. Department of Education released its new regulatory agenda, which prioritizes a number of policy proposals, including those related to defining sex, eliminating DEI programs, and clamping down on foreign funding in education. Jessica Blake of Inside Higher Ed reports that the Department stated its intention to amend Title VI regulations—which it did on July 23, as explained above—as well as to explain how the law’s prohibitions affect DEI programs, bar race-conscious affinity groups and programs, and amend Title IX regulations to define sex as an individual’s “immutable biological classification.” According to Inside Higher Ed’s reporting, the agenda also includes proposals to reduce focus on disparate-impact actions, reduce college mergers and consolidations, limit foreign influence on educational institutions, and expand Title IV aid eligibility for certain for-profit and religious institutions.

On July 1, the EEOC released for public comment a draft of a new four-year strategic plan, laying out its overarching goals and priorities through fiscal year 2030. The 29-page document, which was open for comment through July 19, articulates three goals: combatting and preventing employment discrimination through the strategic application of the EEOC’s law enforcement authority; preventing discrimination and advancing equal employment opportunity through outreach and training; and striving for organizational excellence through the agency’s people, practices, and technology. To achieve the first goal, the EEOC plans to focus on its priorities as set forth in the agency’s National Enforcement Plan, using administrative and litigation mechanisms as well as federal sector adjudications and oversight activities to identify and eliminate discriminatory practices. The draft four-year plan sets forth 17 performance measures across its three goals, including a target that 97% of conciliation agreements and litigation resolutions contain targeted, equitable relief and a goal that in 80% of systemic investigations in which cause is found, the EEOC will achieve targeted equitable relief and at least $1 million in monetary relief. The plan also identifies external factors that may affect its implementation, including budgetary appropriations, demographic and economic shifts, Supreme Court and other judicial decisions interpreting the laws the agency enforces, the potential enactment of new legislation, and technological change—particularly the growth of generative AI, which the agency anticipates will affect how applicants apply for jobs, how employers screen candidates, and how the agency carries out its functions.

On June 30, the EEOC announced it had voted to rescind two decades-old policy documents on voluntary workplace affirmative action plans. The now-rescinded documents include a 1979 interpretive rule called “Affirmative Action Appropriate Under Title VII of the Civil Rights Act of 1964,” which outlined how employers could voluntarily implement affirmative action plans that comply with federal civil rights law, as well as a related Compliance Manual—Section 607—which discusses affirmative action. According to the EEOC, the stated purpose of the guidelines—to protect employers that had adopted “employment practices and systems to improve employment opportunities for minorities and women via race, sex, or national origin conscious . . . decisions”—contradicts the Supreme Court’s holding that Title VII provides the “same protections for every individual.” EEOC Chair Lucas stated that the Commission’s rescission is consistent with the text of Title VII and Supreme Court precedent and reaffirms that the statute’s protections apply equally to all American workers.

On June 24, the Office of Information and Regulatory Affairs (“OIRA”) approved an extension through June 30, 2029, of the Uniform Guidelines on Employee Selection Procedures (“UGESP”), pursuant to the EEOC’s comment request on October 29, 2024. The EEOC’s request, which was submitted during the Biden Administration with a Federal Register notice published on October 29, 2024, did not receive any feedback from the public during its 60-day comment period and was submitted to OIRA on January 6, 2025. The UGESP, which has been in place since 1978 and is enforced by various agencies, including the EEOC, DOJ, and Department of Labor (“DOL”), require that employers maintain internal race/ethnicity and sex self-identification data for applicants necessary to evaluate whether employers’ selection procedures produce adverse impacts against protected classes and to make those records available during an investigation or enforcement action. Notably, these are recordkeeping requirements, not reporting obligations: employers must collect and maintain the data internally and produce it upon request, but are not required to affirmatively report it. Given that the UGESP records exist principally to assess disparate impact, the approval of the extension is in tension with the current Administration’s rejection of disparate-impact theory—including EO 14281, the EEOC’s National Enforcement Plan prioritizing disparate treatment over disparate impact claims, and recent agency actions rescinding disparate-impact provisions, such as OCR’s regulatory overhaul described above. It also stands in apparent contrast to the EEOC’s recent proposed rule to rescind EEO-1 and related reporting requirements, although that proposal addresses demographic data reporting for current employees, whereas UGESP concerns the collection and retention of applicant data.

On June 22, the U.S. Supreme Court invited the Solicitor General to submit a brief expressing the views of the United States on a cert petition, which challenges a New Jersey Appellate Division decision that approved a New Jersey State Bar Association (“NJSBA”) procedure for fostering diversity in its leadership. The suit was brought in 2021 by Rajeh Saadeh, who alleged that the NJSBA’s practice of reserving eight board seats for members of certain demographic groups amounted to discrimination under New Jersey’s public accommodation law. The trial court ruled for Saadeh, but the Appellate Division reversed and remanded, holding that compelling the NJSBA to forgo the set-aside seats would burden NJSBA’s expressive associational rights and “infringe its ability to advocate the value of diversity and inclusivity in the Association and more broadly in the legal profession.” The court further held that the State’s compelling interest in eliminating discrimination did not justify that intrusion. The petition asks the Supreme Court to decide whether the First Amendment overrides antidiscrimination laws when the alleged discrimination is an expression of opinion about diversity, equity, or inclusion. Saadeh argues that the NJSBA’s system of status-based discrimination is conduct, not speech, and therefore receives no First Amendment protection. The case is Saadeh v. New Jersey State Bar Association, No. 25-1002 (U.S.).

On June 12, Judge George L. Russell III of the U.S. District Court for the District of Maryland granted the EEOC’s motion to dismiss a lawsuit challenging the agency’s decisions to cease processing certain EEOC charges tied to sexual orientation and gender identity and restrain state and local civil rights agencies from processing charges related to gender identity or transgender status. The suit was filed on July 29, 2025, by a Baltimore-based LGBTQ+ legal services nonprofit, FreeState Justice, against the EEOC and EEOC Chair Lucas. The plaintiff alleged that the EEOC’s non-enforcement policy violated the Civil Rights Act of 1964, the Equal Protection Clause of the Fifth Amendment, the Administrative Procedure Act (“APA”), and the Supreme Court’s holding in Bostock v. Clayton County, 590 U.S. 644 (2020). On October 15, 2025, the EEOC moved to dismiss for lack of subject matter jurisdiction, arguing, among other things, that the plaintiff lacked standing to challenge the EEOC’s enforcement discretion, and that the APA did not allow jurisdiction over the plaintiff’s claims. The district court largely agreed with the EEOC’s standing arguments and dismissed the case without prejudice. Although the court remarked that the EEOC’s policy was “troubling,” it concluded that the agency’s decision to alter its investigations of gender identity claims constituted “a discretionary decision . . . which the Court lack[ed] authority to review.” The case is FreeState Justice v. EEOC, No. 1:25-cv-02482 (D. Md. 2025).

On June 10, a group of attorneys general from 19 states and Washington, D.C. filed suit in the U.S. District Court for the District of Maryland against more than 50 federal officials and agencies, challenging EO 14398, issued on March 26, which prohibits federal contractors from engaging in “racially discriminatory DEI activities.” The coalition alleges that the executive order and its implementing actions were adopted without the public notice and comment period required by the APA, and that the new contract terms are arbitrary, capricious, and insufficiently clear in defining what conduct is prohibited. The coalition contends that the lack of clarity increases compliance costs, disrupts lawful efforts to prevent and remedy discrimination, and puts states at risk of losing federal contracts. The coalition further asserts that the required contract terms impose monitoring and reporting obligations regarding subcontractors that are unduly burdensome given the unclear scope of the prohibition and the potentially severe consequences of violating the EO. The EO provides that noncompliant contractors may have their contracts canceled, face debarment, or be subject to False Claims Act lawsuits. The plaintiffs are Maryland, California, Illinois, Colorado, Connecticut, Washington, D.C., Hawaii, Maine, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Virginia, Washington, and Wisconsin. The case is Maryland et al. v. Pete Hegseth et al., No. 1:26-cv-02322 (D. Md. 2026). For more reporting on EO 14398, see our March 30, 2026 client alert here.

On June 9, the Office of Legal Counsel (“OLC”) issued a memorandum opinion for the Chair of the EEOC, which concludes that certain of the EEOC’s Title VII guidelines are unconstitutional because “they contemplate liability based on disparate effects alone, without regard to an employer’s likely intent,” and because they “pressure employers to engage in race-based decisionmaking.” The OLC opinion specifically finds that two features of the EEOC’s existing interpretive rules and guidance are unlawful. First, OLC finds that the EEOC Uniform Guidelines on Employee Selection Procedures’ validation-study requirements impose burdens that far exceed what is required to meet Title VII’s business-necessity defense. According to the memo, an employer need only show that the challenged policy is a “reasonable” way of accomplishing a “valid interest,” whereas the Guidelines contemplate “an exceedingly high burden to validate an employer policy.” Second, the opinion notes that the EEOC’s affirmative-action regulations are unlawful because they “purport[] to authorize” and “expressly encourag[e] racial preferences . . . in response to actual or anticipated disparate impacts,” in violation of Title VII and the Equal Protection Clause. The opinion identifies three “corrections” which, taken together, could make disparate-impact liability lawful: (1) courts interpreting the business-necessity defense must give employers “significant leeway” to show that the challenged practice rationally serves a valid business purpose, including by presuming that background checks, aptitude tests, and SAT scores are likely job-related; (2) plaintiffs must satisfy a robust causality requirement by showing that the specific employment practice being challenged caused the disparate impact; and (3) plaintiffs must establish with particular evidence that an equally effective alternative practice exists that causes less disparate impact.

On June 8, the NAACP sued the EEOC in the U.S. District Court for the District of Columbia, alleging that the agency violated the Freedom of Information Act (“FOIA”) by wrongfully withholding documents in response to a records request for enforcement-related data and guidance on workplace discrimination. The NAACP filed the FOIA request in March after EEOC Chair Lucas released a video and social media posts in December 2025, encouraging white males to submit discrimination complaints. The FOIA request seeks eight categories of records, including guidance on workplace discrimination enforcement, data on race- and sex-based discrimination charges, and communications related to Chair Lucas’s video solicitation. The complaint alleges that the EEOC violated federal law by failing to conduct adequate searches and wrongfully withholding records after missing statutory deadlines for its response. The case is NAACP v. EEOC, No. 26-cv-02020 (D.D.C. 2026).

In May and June, the EEOC updated its webpage tracking the annual number of discrimination charges received by statute and type of discrimination alleged, removing a table that showed data on LGBTQ+ discrimination titled “Title VII Sex-Sexual Orientation and/or Transgender Status.” The updated tracker also eliminates a set of more granular data the agency had previously reported from its charge filings, broken out by the issue or job action underlying the bias claim, such as English-only rules, layoffs, maternity and paternity, recordkeeping violations, union representation, and benefits.

Media Coverage and Commentary

Below is a selection of recent media coverage and commentary on these issues:

New York Times, “At Trump’s Direction, Federal Agencies Are Abandoning Discrimination Cases” (July 5, 2026): Erica L. Green and Niko Gallogly of the New York Times report that, after President Trump issued an executive order directing federal agencies to “deprioritize” disparate-impact discrimination cases, agencies including the Departments of Education, Housing and Urban Development, and Justice and the EEOC have abandoned civil rights cases predicated on that theory. Green and Gallogly explain that disparate-impact liability, established by the Supreme Court in 1971 and codified by Congress in 1991, permits challenges to facially neutral policies where they disproportionately harm a protected group. The authors report that, consistent with the Administration’s guidance, the EEOC dropped a class-action lawsuit against Sheetz alleging that its criminal background checks disproportionately screened out applicants of color; the Department of Housing and Urban Development withdrew disparate-impact guidance; and the Department of Justice terminated an environmental justice settlement it characterized as “illegal DEI.” According to the article, the Office of Management and Budget separately proposed a rule barring federal funds from being used to promote disparate-impact theories.
HR Dive, “DEI’s next era? Reorientation, says SHRM’s Johnny Taylor Jr.” (June 24, 2026): Caroline Colvin of HR Dive reports on remarks by Johnny C. Taylor, Jr., president and CEO of the professional association Society for Human Resource Management (“SHRM”), who predicted at the organization’s annual conference in June 2026 that the future of corporate inclusion will be “bumpy” over the next two years. According to the article, Taylor noted that while the EEOC continues to file standard cases, it has increasingly focused on reverse discrimination claims. Taylor predicted that the human resources profession will have to “reorient” away from focusing on groups that have been historically underrepresented and discriminated against toward broadly opposing any form of discrimination. Taylor clarified that SHRM is not abandoning diversity and inclusion, citing its revamped Center for Inclusion and Diversity, but is instead encouraging a reframe, emphasizing that Title VII refers to “equal” treatment, rather than “equity,” and that employers must comply with the law as written.
Law360, “FCC’s Carr Calls Policy Against DEI ‘Right Thing To Do’” (June 23, 2026): Christopher Cole of Law360 reports that the Federal Communications Commission (“FCC”) released an exchange of letters between Chair Brendan Carr and 18 members of the U.S. House of Representatives regarding the FCC’s employment- and diversity-related regulatory actions. Cole reports that, in his role to date, Chair Carr has told regulated companies to eliminate policies that cause “invidious” discrimination and stated that the FCC’s mandate to enforce nondiscrimination under the Communications Act extends to DEI-related employment practices. The letters from 18 Members of Congress challenged whether Chair Carr possessed the authority to target “lawful internal” DEI programs. In response, Chair Carr stated in part that the FCC “takes seriously its responsibility to investigate and address allegations that regulated entities have been discriminating in violation of the federal nondiscrimination regulations.”
Law360, “Investors Nearly Unanimously Reject Anti-Diversity Proposals” (June 22, 2026): Sue Reisinger of Law360 Pulse reports that, according to a study published in the Harvard Law School Forum on Corporate Governance by attorneys David Bell and Wendy Grasso, anti-DEI shareholder resolutions have drawn average support of approximately 1% over the past two proxy seasons. Reisinger also reports that pro-diversity proposals, while garnering more support than their anti-DEI counterparts, are declining in number due to what the study describes as “legal and political headwinds.” The article notes that some proponents of anti-DEI proposals have tried to reframe these resolutions as “return-on-investment audits” of inclusion programs, or reports on “viewpoint discrimination,” but that this has not helped the popularity of such resolutions among shareholders.
Forbes, “Is DEI Dead? Not According To New Catalyst Data On Workplace Inclusion” (June 16, 2026): Michelle Travis of Forbes reports on a May 2026 survey by the nonprofit Catalyst and the Meltzer Center for Diversity, Inclusion, and Belonging at NYU School of Law, which found that 80% of organizations remain committed to DEI and workplace inclusion efforts. Furthermore, whereas 55% of organizations have publicly signaled a retreat from DEI, only 34% reported actually decreasing inclusion efforts, suggesting a gap between external messaging and internal practices. Travis also notes that companies which are not federal contractors were more likely to report increased inclusion efforts, while federal contractors reported scaling back inclusion efforts amid heightened scrutiny. Travis further states that business leaders and employees continue to associate inclusion efforts with positive impacts on reputation, recruiting, retention, sales, and innovation, and she cites legal experts who maintain that well-designed DEI initiatives remain lawful. Notably, Travis observes that DEI initiatives are more likely to “reduce rather than increase legal risk . . . because employers—particularly non-federal contractors—remain far more likely to be sued for discrimination by individuals from historically excluded groups than to be investigated by the government for diversity initiatives.”
Reuters, “Law firms loved diversity, until it became a liability” (June 15, 2026): Sara Randazzo of Reuters reports that Diversity Lab, the organization behind the legal industry’s “Mansfield Certification,” which required participating law firms to consider at least 30% underrepresented candidates for certain roles, has permanently closed. The closure followed a campaign by the Federal Trade Commission (“FTC”), which sent letters to 42 law firms in late January 2026 to raise antitrust concerns about those firms’ participation in the certification program. Randazzo reports that firms withdrew their participation after receiving the FTC letters, ultimately depriving Diversity Lab of the revenue needed to operate. Randazzo notes that Diversity Lab founder Caren Ulrich Stacy declined to sign a proposed FTC consent decree that, according to Stacy, would have prohibited the organization from continuing its work.
Bloomberg Law, “Worker Bias Suits Reveal DEI Dual Compliance Trap for Employers” (June 11, 2026): Bloomberg Law’s Khorri Atkinson reports that President Trump’s DEI-related EOs have left employers caught in what one attorney calls a “compliance pincer movement,” exposing employers to suits by both minority workers if employers rescind DEI practices and non-minority workers if they maintain them. As the report explains, federal contractors in particular face competing pressures, as they are subject to the Administration’s DEI-related EOs, state contracting policies promoting diversity, and recent litigation by minority former employees, alleging that the companies took adverse actions against them to appease the Administration. But, as the report notes, the tension also extends to private employers who are not government contractors, many of whom face bias suits from both sides. Practitioners quoted in the article opine that employers should not abandon DEI but should audit and document their practices to ensure employment decisions are made for race- and gender-neutral reasons to guard against litigation from all directions.
Inside Higher Ed, “DOJ Investigates CUNY’s Black Male Initiative” (June 10, 2026): Katherine Knott of Inside Higher Ed reports that the DOJ has opened a Title VI civil rights investigation into the City University of New York’s Black Male Initiative, which aims to support students underrepresented in higher education, including Black men. According to Knott, the Department of Justice has received reports that the program, which offers “academic and social support, such as peer-to-peer mentoring,” “provides educational benefits to minorities, particularly black males, on the basis of race.” The program’s website states that the initiative is geared toward Black, Caribbean, and Hispanic men, but is open to all students. In a press release announcing the investigation, Assistant Attorney General Harmeet K. Dhillon of DOJ’s Civil Rights Division stated that “[t]he program, as the name suggests, appears to favor select non-white minorities–primarily black males–over applicants of other races,” and that “race can never play a role when deciding how to distribute educational resources or opportunities.”
Los Angeles Times, “School programs to aid Black students under increased scrutiny as ‘illegal DEI’ under Trump” (June 9, 2026): Annie Ma of the Los Angeles Times reports that enforcement of federal civil rights laws under the Trump Administration has shifted to challenging programs originally designed to remedy historic, systemic discrimination against Black students and other students of color. The article notes that the DOJ has been investigating several such programs, including programs to increase the number of teachers of color in Rhode Island and Iowa and a program to increase access to advanced coursework for Black students in Chicago. According to Ma, the DOJ also has released certain school districts from court-ordered desegregation plans. Ma further reports that the Trump Administration has opened an investigation into a Los Angeles program designed to increase social work and counseling support for Black students, and has joined a lawsuit challenging another Los Angeles program offering smaller class sizes and other support for schools with 70% or more students of color.
The Hill, “DOJ opens 15 new investigations into medical schools’ admissions” (June 4, 2026): The Hill’s Finya Swai reports that the DOJ is investigating 15 medical schools regarding alleged racial discrimination in admissions. According to Swai, the DOJ is investigating whether the schools are complying with the Supreme Court’s ruling prohibiting the use of affirmative action in higher education admissions (SFFA v. Harvard). Swai reports that this announcement follows a recent DOJ notice of findings letter, which stated that Yale’s medical school unlawfully favored Black and Hispanic applicants over white and Asian applicants in its admissions process.

Case Updates

Below is a list of updates in new and pending cases:

1. Contracting claims under Section 1981, the U.S. Constitution, and other statutes

Landscape Consultants of Texas, Inc. v. Harris County, Texas et al., No. 4:25-cv-00479 (S.D. Tex.): On February 5, 2025, Landscape Consultants of Texas, Inc. sued Harris County, Texas and the Harris County Commissioners Court (“HCCC”), challenging Harris County’s Minority and Woman-Owned Business Enterprise (“MWBE”) Program. The plaintiff, a non-MWBE landscaping company, claims it “has been at a significant disadvantage when bidding on landscaping contracts” with the County, because a Harris County ordinance requires that the government grant a certain percentage of contracts to MWBEs. The plaintiff alleges that the MWBE Program is racially discriminatory in violation of Section 1981 and the Fourteenth Amendment because it treats companies bidding for public contracts differently based on the race of the company’s owners. On April 14, 2025, the HCCC moved to dismiss the plaintiff’s claims against it, contending that the court “lacks a separate legal existence” from Harris County and cannot “sue or be sued.” On May 5, 2025, the plaintiff voluntarily dismissed its claims against the HCCC without prejudice.
- Latest update: On May 11, 2026, Harris County filed a motion for partial summary judgment. Harris County argued that the plaintiff’s standing was limited to challenging the constitutionality of the County’s MWBE policy only as applied to landscaping contracts. On June 1, 2026, the plaintiff filed a response, arguing that it would be improper for a court to narrow an equal protection facial challenge before deciding whether the challenged policy is unconstitutional and before the close of discovery reveals a complete record. On June 11, 2026, Harris County filed a reply, reiterating that under Fifth Circuit precedent, standing is limited to the market in which the plaintiff competes.

American Alliance for Equal Rights v. Congressional Black Caucus Foundation, Inc., No. 1:26-cv-01123 (D.D.C. 2026): On April 2, 2026, the American Alliance for Equal Rights (“AAER”) sued the Congressional Black Caucus Foundation (“CBC Foundation”), alleging that its educational scholarships violate Section 1981. According to the complaint, the CBC Foundation administers the CBC Spouses Education Scholarship that allegedly limits eligibility to applicants who are African American or Black and who reside in or attend an academic institution in a district represented by a CBC Foundation member. The complaint alleges that these requirements unlawfully exclude non-Black applicants from applying and competing for the scholarships in violation of Section 1981. AAER seeks a declaratory judgment that the scholarship program violates Section 1981, as well as a temporary restraining order, preliminary injunction, and permanent injunction barring the CBC Foundation from considering race or race proxies in administering the scholarships.
- Latest update: On June 3, 2026, AAER filed an amended complaint, which maintains near-identical allegations but adds a second plaintiff, the education nonprofit organization Defending Education, whose mission, according to the complaint, is to “prevent . . . the politicization of education” and whose members allegedly “include students, parents, and others who are concerned about the state of education in America.” On July 16, 2026, CBC Foundation filed its motion to dismiss, arguing that the court lacks subject matter jurisdiction, that plaintiffs’ claims are not ripe and speculative, that plaintiffs’ lack standing, and that the Speech and Debate Clause of the U.S. Constitution prevents the court from interfering with the CBC’s membership decisions. CBC Foundation further argues that, even if the court concludes it has jurisdiction, the plaintiffs’ claims should be dismissed because the plaintiffs have not plausibly alleged any violation of Section 1981 and cannot establish intentional discrimination, but-for causation, or the existence of a contractual relationship. Finally, CBC Foundation argues that its charitable donations and related speech are protected by the First Amendment. (Gibson Dunn represents the CBC Foundation.)

2. Employment discrimination and related claims

American Alliance for Equal Rights v. Maestra Music, Inc., Arts Ignite Inc., Wicked LLC, No. 1:26-cv-04645 (S.D.N.Y. 2026): On June 3, 2026, AAER and Kevin Lynch, a white male composer and musician, filed suit against Maestra Music, Inc. (doing business as Musicians United for Social Equity, or “MUSE”); and Wicked LLC, the company that stages the Broadway musical Wicked, alleging race and sex discrimination. Specifically, the complaint alleges violations of Section 1981, the New York State Human Rights Law, the New York State Civil Rights Law, and the New York City Human Rights Law. AAER and Lynch contend that Maestra runs an employment directory open only to female and nonbinary musicians, and that MUSE runs a sister directory open only to musicians of color, both of which connect members with theater-industry work. The complaint further alleges that in 2023, Wicked collaborated with Maestra and MUSE to create the “Music Director Experience,” a paid apprenticeship open only to members of the two directories, and that plaintiff Lynch was qualified but excluded from the directories on account of his race and sex. The plaintiffs allege that the position was instead awarded to a “female and nonbinary person of color” who allegedly had less music-directing experience than Lynch. The plaintiffs seek an injunction, barring Maestra and MUSE from considering race or sex in directory admissions and further barring them from classifying directory members by race or sex in their directories. The plaintiffs seek compensatory, punitive, and nominal damages as well as attorneys’ fees.
- Latest update: An initial pretrial conference is set for August 6, 2026. None of the defendants has yet responded to the complaint.
Ardalan v. Wells Fargo, No. 3:22-cv-03811 (N.D. Cal. 2022): On June 28, 2022, a putative class of Wells Fargo stockholders brought a class action against the bank related to an internal policy requiring that half of the candidates interviewed for positions that paid more than $100,000 per year be from an underrepresented group. The plaintiffs alleged that the bank conducted sham job interviews to create the appearance of compliance with this policy and that this was part of a fraudulent scheme to suggest to shareholders and the market that Wells Fargo was dedicated to DEI principles. On August 23, 2024, Wells Fargo answered the amended complaint, admitting that the bank had “Diverse Slate Guidelines” to promote diversity but denying the allegations of unlawful conduct. On April 25, 2025, the court granted a motion for class certification.
- Latest update: On September 25, 2025, the parties notified the court that they had reached an agreement-in-principle to resolve the matter. On October 15, 2025, plaintiffs filed an unopposed motion for preliminary approval of settlement. Under the proposed settlement, the defendants will pay $85,000,000 in cash to be distributed among class members who submit valid claims in accordance with the plan of allocation set forth by the parties or a plan of allocation approved by the court. The class consists of all persons and entities who purchased or otherwise acquired Wells Fargo common stock between February 24, 2021 and June 9, 2022. On May 21, 2026, the court granted the plaintiffs’ motion for final approval of the class action settlement and plan of allocation and granted, as modified, class counsel’s motion for attorneys’ fees and litigation expenses.

3. Challenges to statutes, agency rules, executive orders, and regulatory decisions

State of California et al v. U.S. Department of Education et al, No. 1:25-cv-10548 (D. Mass. 2025): On March 6, 2025, the states of California, Massachusetts, New Jersey, Colorado, Illinois, Maryland, New York, and Wisconsin sued the Department of Education, the Secretary of Education, Linda McMahon, and former Acting Secretary of Education, Denise Carter, alleging that defendants arbitrarily terminated previously awarded grants under the Teacher Quality Partnership and Supporting Effective Educator Development programs in violation of the APA.  On April 16, 2026, the plaintiffs moved for summary judgment, alleging that the Department’s February 2025 directive, issued by then-Acting Secretary Denise Carter, unlawfully prohibited funding for DEI programs and effectively eliminated the two federal grant programs at issue. The plaintiffs reiterated their argument that the Department’s actions are unconstitutional and violate the APA and the General Education Provisions Act, requesting that the court hold unlawful and set aside the Department’s actions as arbitrary and capricious.
- Latest update: On June 1, 2026, the defendants filed a cross-motion for summary judgment, arguing that the plaintiffs’ prospective claims challenging the Department’s February 2025 guidance are moot because the Department has since issued new, superseding guidance that does not mandate grant terminations.  The defendants further argue that the plaintiffs lack Article III standing because it remains speculative whether they will apply for, receive, and then lose future grants under the challenged guidance. Finally, the defendants contend that the guidance is lawful because it directs program offices to review grants for “discriminatory activities” and does not conflict with the grants’ authorizing statutes. On July 1, 2026, the plaintiffs filed an opposition to the defendants’ cross-motion for summary judgment and reply in support of its motion for summary judgment. The plaintiffs argue that the guidance does not render their claims moot as it relates to a different grant process unrelated to the February 2025 directive. Further, the plaintiffs argue that they have standing because many of them have applied for grants anew since filing their motion for summary judgment. A hearing on the parties’ cross-motions for summary judgment took place on July 24, 2026, after which the court took the parties’ motions under advisement.
National Association of Diversity Officers in Higher Education et al v. Trump et al., No. 1:25-cv-00333 (D. Md.) No. 25-1189 (4th Cir.): On February 3, 2025, the National Association of Diversity Officers in Higher Education, the American Association of University Professors, the Restaurant Opportunities Centers United, and the Mayor and City Council of Baltimore, Maryland brought suit against the Trump Administration, challenging EOs 14151 and 14173, which targeted government-funded DEI programs and threatened to terminate or defund contracts. The plaintiffs contend that the EOs exceed presidential authority, violate the separation of powers and the First Amendment, and are unconstitutionally vague. On February 21, 2025, the Court granted in part a preliminary injunction to prevent the Administration from enforcing the EOs. On March 14, 2025, the Fourth Circuit stayed the injunction. On February 6, 2026, the Fourth Circuit vacated the preliminary injunction and remanded to the lower court, finding that the plaintiffs lacked standing to challenge the Enforcement Threat Provision and failed to show that they were likely to succeed on their claims that the Termination Provision and Certification Provision are facially unconstitutional. On April 30, 2026, in district court, the defendants filed a motion to dismiss for lack of subject matter jurisdiction and failure to state a claim. In the motion, the defendants argue that the plaintiffs lack standing to challenge the Enforcement Threat Provision because it is an intra-governmental action and does not create an imminent danger of injury. They alternatively argue that the allegations are moot because “[t]he at-issue report has already been ‘submitted … to the President,” that the plaintiffs’ First Amendment argument fails because the plaintiffs have no protected speech interest in operating unlawful programs, and that the plaintiffs’ Fifth Amendment vagueness challenge to the Termination Provision fails because courts tend to defer to government funding decisions and bar challenges based on facial vagueness where the government is “acting as a patron, rather than as sovereign.” Finally, the defendants assert that the plaintiffs’ Spending Clause and separation-of-powers claims fail because the EOs do not impose new funding conditions or usurp Congress’s authority.
- Latest update: On June 26, 2026, the plaintiffs filed a notice of voluntary dismissal without prejudice. The plaintiffs explained that they were dismissing the case because, in an appeal of the court’s grant of a preliminary injunction, the government had represented to the Fourth Circuit that the challenged EOs were much narrower in scope than they believed the Trump Administration’s initial statements reflected, and the Fourth Circuit accepted those representations, effectively mooting the plaintiffs’ allegations. Specifically, the plaintiffs cite statements by the government that the Termination Provision is not itself a “regulation” but instead is a directive that does not terminate any contracts or directly regulate private conduct, and that the Certification Provision “does not impose a new requirement on recipients—it merely requests that recipients certify that they are honoring their preexisting obligations to abide by anti-discrimination laws in operating any DEI programs.” (Stip. at ¶¶ 9-10, 12, 14.) The plaintiffs also point to representations by the government at oral argument that “[o]f course the label [DEI] doesn’t make [conduct] unlawful,” that the government was not suggesting that it would “come after anything labeled DEI and say it’s illegal,” and that there is “‘absolutely’ DEI activity that falls comfortably within the confines of the law.” ( at ¶ 11.) On June 30, 2026, the court entered dismissal.
FreeState Justice v. Equal Employment Opportunity Commission et al., No. 1:25-cv-2482 (D. Md.): On July 29, 2025, FreeState Justice sued the EEOC and acting chair Andrea Lucas for declaratory and injunctive relief. The plaintiff, a legal services non-profit organization serving LGBTQ+ people in Maryland, alleged that the EEOC had adopted a policy not to investigate charges of discrimination against transgender individuals, in violation of Title VII of the Civil Rights Act of 1964, the Fifth Amendment, and sections 706(2)(A)-(D) of the APA. On October 15, 2025, the defendants filed a motion to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). The defendants argued that the plaintiff did not have standing to challenge the EEOC’s discretionary decisions about how to enforce federal antidiscrimination law, as such functions are generally insulated from judicial review. The defendants also argued that the plaintiff lacked standing because it had not suffered a cognizable injury that was redressable by the court. Finally, the defendants argued that the plaintiff’s suit was deficient because the challenged policy was not a discrete, final agency action, as is required for claims brought under the APA.
- Latest update: On June 12, 2026, the court granted the defendants’ motion to dismiss. The court held that, although “deeply troubling,” the EEOC’s decision to change how it investigates claims of gender identity discrimination constituted a discretionary decision over which the court did not have jurisdiction. As a result, the court dismissed the case for lack of standing.
American Federation of Teachers, et al. v. U.S. Department of Education, et al., No. 1:25-cv-00628 (D. Md. 2025):On February 25, 2025, the American Federation of Teachers, the American Federation of Teachers – Maryland, and the American Sociological Association sued the U.S. Department of Education (“DOE”), challenging the DOE’s “Dear Colleague Letter” (“DCL”) issued on February 14, 2025. The plaintiffs allege that the letter—which purported to “clarify and reaffirm the nondiscrimination obligations of schools and other entities that receive federal financial assistance”— violated the First and Fifth Amendments and the APA. The letter had instructed educational institutions to ensure that their policies and actions “comply with federal civil rights laws,” and to cease efforts to circumvent prohibitions on the use of race through “relying on proxies,” “third-party contractors, clearinghouses, or aggregators.” On March 5, 2025, the plaintiffs amended their complaint to add the Eugene School District as a plaintiff and to add factual allegations about a subsequent DOE FAQ document published on February 28, 2025. After that point, on April 3, 2025, the DOE advised state education agencies that they would be required to certify compliance with the Administration’s interpretation of Title VI and the Supreme Court’s decision in SFFA. On April 9, 2025, the plaintiffs filed an expedited motion to preliminarily enjoin the certification requirement. On April 24, 2025, the court granted in part the plaintiffs’ motion for a preliminary injunction, finding the plaintiffs likely to succeed on their APA and First Amendment claims. The court declined to enjoin the certification requirement because the plaintiffs moved to enjoin it without raising any facts about it in their amended complaint, which they had filed prior to the DOE’s certification requirement announcement. On June 5, 2025, the plaintiffs filed a motion for summary judgment, arguing the letter and later certification requirement violated the APA, First Amendment, and Fifth Amendment. On July 1, 2025, the defendants filed a motion to dismiss or, in the alternative, for summary judgment, along with their opposition to the plaintiffs’ motion for summary judgment. The defendants argued that the plaintiffs lack standing because their alleged injuries are speculative and not traceable to the challenged guidance; that the DCL and the certification requirement are not final agency actions reviewable under the APA and, even if final, are exempt interpretive rules; and that the plaintiffs’ First and Fifth Amendment claims fail as a matter of law. The defendants also urged the court to narrow any relief to the parties with standing in light of Trump v. CASA, Inc., 606 U.S. 831 (2025). On July 17, 2025, the plaintiffs filed a second amended complaint adding counts alleging violations of the First Amendment, the Fifth Amendment, the APA, and the Paperwork Reduction Act. On August 14, 2025, the court held that the Dear Colleague Letter and the certification requirement were unlawfully promulgated in violation of the APA, the First Amendment, and the Fifth Amendment, and vacated both documents in their entirety. The court granted the plaintiffs’ motion for summary judgment as to the counts challenging the Dear Colleague Letter and the APA claim concerning the certification requirement and granted the DOE’s cross-motion only as to the plaintiffs’ First Amendment claim challenging the certification requirement. On October 13, 2025, the DOE appealed the order. On January 22, 2026, the Fourth Circuit granted the DOE’s motion to voluntarily dismiss the appeal.
- Latest update:On June 12, 2026, the parties filed a joint stipulation of dismissal, which the court granted on June 15.
Do No Harm v. Lee, No. 3:23-cv-01175-WLC (M.D. Tenn. 2023): On November 8, 2023, Do No Harm sued Tennessee Governor Bill Lee under the Equal Protection Clause, seeking to enjoin a 1988 Tennessee law requiring the governor to “strive to ensure” that at least one board member of the six-member Tennessee Board of Podiatric Medical Examiners is a racial minority. On February 2, 2024, Governor Lee moved to dismiss the complaint for lack of standing. On August 8, 2024, the court granted Governor Lee’s motion to dismiss and entered judgment in the case, holding that Do No Harm had not demonstrated injury in fact. On August 30, 2024, Do No Harm appealed the district court’s decision to the Sixth Circuit. On May 29, 2025, Do No Harm moved to dismiss the appeal, with the consent of the defendant-appellee, based on mootness and asked the court to vacate the decision of the lower court. The plaintiff-appellant argued that, since the filing of the appeal, Tennessee introduced and passed bills repealing the challenged statutes, thereby mooting the case.
- Latest update: On June 2, 2026, the Sixth Circuit granted in part Do No Harm’s motion to voluntarily dismiss the appeal. The Sixth Circuit agreed that the appeal was now moot but disagreed that vacatur was the appropriate remedy. Instead, the Sixth Circuit dismissed the case for lack of jurisdiction.
National Education Association, et al. v. Formella, et al., No. 1:25-cv-00293 (D.N.H. 2025):On August 7, 2025, the National Education Association (along with four New Hampshire school districts, DEI professionals, and a nonprofit that provides LGBTQ+ programming in schools) sued multiple New Hampshire state officials to enjoin enforcement of New Hampshire statutes RSA 21-I:112-116 and RSA 186:71-77. These statutes, effective July 1, 2025, prohibit DEI initiatives, programs, trainings, and policies in public schools and other public entities. The statutes require schools to submit a report identifying contracts “containing DEI-related provisions” by September 30, 2025, but the New Hampshire Department of Education requested that schools submit such reports by September 5, 2025. In the complaint, the plaintiffs allege that the statutes (1) violate the Supremacy Clause because they conflict with federal antidiscrimination laws, (2) violate the First Amendment rights of students and educators, and (3) are unconstitutionally vague and ambiguous under the United States and New Hampshire Constitutions. On October 2, 2025, the court granted the plaintiffs’ motion for a preliminary injunction, noting that the breadth of New Hampshire’s anti-DEI law was “startling” and holding that the law is likely to be unconstitutionally vague. The court also found that the plaintiffs were likely to succeed on their preemption claim, holding that the laws at issue are likely preempted by the Americans with Disabilities Act (“ADA”) and the Individuals with Disabilities Education Act (“IDEA”).
- Latest update: On May 20, 2026, the plaintiffs moved for summary judgment on three of their five claims, seeking to make the preliminary injunction permanent. The plaintiffs argue that the relevant laws violate the Fourteenth Amendment’s prohibition on vagueness because they are devoid of objective guidelines and lack a scienter requirement; violate the First Amendment by discriminating against specific viewpoints; and are preempted by federal statutes such as the ADA and the IDEA. On June 5, 2026, six New Hampshire public school districts and a school administrative unit filed an amicus brief in support of the motion.

City of Seattle v. Trump, et al., No. 2:25-cv-01435 (W.D. Wash. 2025): On July3 1, 2025, the City of Seattle sued the Trump Administration, challenging EOs 14173 and 14168, which respectively voided affirmative action requirements for government contractors and outlined the federal government’s policy to “recognize two sexes.” On October 31, 2025, the court granted Seattle a preliminary injunction, finding that Seattle was likely to succeed on the merits because EOs 14173 and 14168 likely violate the separation of powers doctrine. Additionally, the court found that the harm to Seattle in the absence of a preliminary injunction would be irreparable and certain because Seattle would lose government grants that support a wide array of public safety, law enforcement, and other services. On December 29, 2025, the defendants filed a notice of appeal of the district court’s order granting a preliminary injunction; the appeal was stayed on January 12, 2026. On April 7, 2026, Seattle filed an amended complaint, adding as plaintiffs the cities of Cleveland, Columbus, Durham, and Portland, as well as Allegheny County, Pennsylvania, Minnesota’s Hennepin County and Ramsey County, and Prince George’s County, Maryland. The amended complaint also added numerous federal agencies as defendants. The substantive allegations remain the same. On May 1, 2026, the plaintiffs filed a second motion for a preliminary injunction, seeking to extend to the additional plaintiffs the injunctive relief granted to Seattle.
- Latest update: On May 22, 2026, the defendants filed their opposition to the plaintiffs’ second motion for a preliminary injunction, arguing that the plaintiffs failed to show they were likely to succeed on the merits. According to the defendants, the challenged conditions do not violate the APA, the Spending Clause, the Fourteenth Amendment’s prohibition on vagueness, or the Tenth Amendment. The defendants also asked the court to refrain from ruling until the Ninth Circuit issues a decision in King County v. Turner, No. 25-3664, in which the district court enjoined the Departments of Transportation, Housing and Urban Development, and Health and Human Services from enforcing the challenged grant conditions relevant to Seattle’s case. On June 29, 2026, the court granted Seattle’s second motion for a preliminary injunction.

4. Actions against educational institutions

Do No Harm et al. v. University of California et al., No. 2:25-cv-4131 (C.D. Cal. 2025): On May 8, 2025, Do No Harm, Students for Fair Admissions, and a rejected applicant filed a class action complaint against the David Geffen School of Medicine at UCLA, UCLA, and the Regents of the University of California, along with numerous individual defendants including regents, university administrators, and admissions committee members. The plaintiffs allege that UCLA Medical School unlawfully uses race as a factor in admissions decisions in violation of Section 1983, Title VI, Section 1981, and California’s Unruh Civil Rights Act. The complaint also alleges that the University effectively shut down an internal investigation into its admissions practices by requiring admissions committee members to sign nondisclosure agreements and refusing to assure cooperating witnesses they would not face retaliation. On December 23, 2025, the plaintiffs filed a second amended complaint, omitting claims under the Unruh Act and instead raising only federal claims under Title VI, Section 1981, and Section 1983. On January 28, 2026, the United States filed a motion to intervene as a plaintiff-intervenor. On February 19, 2026, the court granted that motion. On February 24, 2026, the United States filed an intervenor complaint, alleging that the defendants violated the Equal Protection Clause of the Fourteenth Amendment by intentionally engaging in racial balancing that confers preferences in admissions without a legitimate governmental purpose. On March 16, 2026, the plaintiff-intervenor and the defendants filed a joint stipulation of dismissal without prejudice as to the individual defendants. On March 17, 2026, the court entered the stipulated dismissal. On March 20, 2026, the defendant the Regents of the University of California filed an answer to the complaint, denying all claims and asserting various affirmative defenses, including lack of standing.
- Latest update: On July 14, 2026, the United States filed a first amended complaint that added additional breach of contract and Title VI claims.
Sullivan v. Howard University, No. 1:24-cv-01924 (D.D.C. 2024): On July 1, 2024, a male administrator at Howard University who was transferred to another department filed suit against the university, bringing claims of sex discrimination and retaliation in violation of Section 1981, and sex discrimination, retaliation, and a hostile work environment in violation of the D.C. Human Rights Act (“DCHRA”). On September 16, 2024, Howard University filed a partial motion to dismiss, arguing for the dismissal of both claims brought under Section 1981 because it does not protect against sex-based discrimination, and the hostile work environment claim because the alleged conduct was not severe, pervasive, or even linked to the plaintiff’s sex. On April 18, 2025, the court granted the university’s motion to dismiss the Section 1981 claims but denied the motion as to the hostile work environment claim. On May 2, 2025, Howard University filed an answer denying the remaining allegations in the complaint. On May 7, 2026, Howard University moved for summary judgment on Sullivan’s remaining DCHRA claims for sex discrimination, retaliation, and hostile work environment. Howard argued that Sullivan cannot establish a prima facie case of sex discrimination because (1) he suffered no cognizable adverse action, as none of the employment actions he identified caused “objectively tangible harm,” (2) none of the challenged conduct was motivated by his gender, given that the same senior administrator who allegedly discriminated against him had also created the position for him and advocated for his hiring, and (3) he cannot show that Howard’s proffered non-discriminatory reasons for each alleged adverse action were pretextual. Howard further argued that Sullivan failed to identify any DCHRA-protected activity to support his retaliation claim, or conduct severe or pervasive enough to sustain his hostile work environment claim.
- Latest update: On June 17, 2026, Sullivan filed his opposition to Howard University’s motion for summary judgment, arguing that genuine disputes of material fact exist as to all three DCHRA claims. He contended that he suffered multiple adverse actions; that statements allegedly made by the Howard senior administrator who hired him constituted direct evidence of gender-based animus; and that Howard’s proffered reasons for the adverse actions remain pretextual. He further argued that Howard’s escalating adverse treatment following each of his complaints supports his retaliation claim, and that the cumulative pattern of conduct created a hostile work environment.
Hooley v. Regents of the University of California et al., No. 3:25-cv-01399 (N.D. Cal. 2025):On February 11, 2025, the mother of a minor high school student sued the Regents of the University of California (“UC”), alleging that UC San Francisco Benioff Children’s Hospital Oakland discriminates against white students by offering its Community Health and Adolescent Mentoring Program for Success (“CHAMPS”) internship only to “underrepresented minority students.” The plaintiff alleges that her daughter applied for CHAMPS and was rejected based on her race. The plaintiff challenges the CHAMPS program as violating the Fourteenth Amendment of the United States Constitution, Title VI, Section 1981, and the California Constitution. On November 26, 2025, the parties filed a notice of conditional settlement and joint stipulation to vacate all upcoming deadlines. On December 1, 2025, the court entered the stipulation as an order.
- Latest update: On June 12, 2026, the plaintiffs filed a notice of voluntary dismissal, informing the court that the parties had reached a settlement agreement. The court dismissed the case the same day.
Johnson v. Fliger, et al., No. 1:23-cv-00848 (E.D. Cal. 2023), on appeal at No. 24-6008 (9th Cir. 2024): On June 1, 2023, Daymon Johnson, a professor at Bakersfield College in California, sued several Bakersfield and Kern Community College District officials, alleging that the District’s commitment to “embrac[e] diversity” and “anti-racism” through state and local district statutes, regulations, and policies imposes an “ideological orientation” on faculty and suppresses opposing viewpoints and political speech in violation of Section 1983 and the First and Fourteenth Amendments. On September 23, 2024, the court dismissed the complaint, reasoning that the plaintiff failed to allege sufficient injury. On July 14, 2025, after the plaintiff appealed, the Ninth Circuit reversed the district court’s decision, holding that (1) the plaintiff sufficiently alleged “an intention to engage in a course of conduct arguably affected with a constitutional interest” under the First Amendment, (2) his intended conduct was “arguably proscribed” by the regulations, and (3) the plaintiff adequately alleged a “credible threat” of enforcement. The court remanded the plaintiff’s motion for preliminary injunction for the district court to consider in the first instance. On February 20, 2026, the district court granted in part the plaintiff’s motion for a preliminary injunction as to the plaintiff’s as-applied viewpoint discrimination and compelled speech challenges. The court denied the preliminary injunction as to the plaintiff’s facial challenges to the regulations. On March 24, 2026, the parties filed a joint motion to stay the proceedings to focus on a prospective settlement.
- Latest update: On July 6, 2026, the parties filed a joint motion for entry of a proposed stipulated order for a permanent injunction. On July 7, 2026, the court ordered the stipulated permanent injunction. The permanent injunction enjoins the defendants from investigating, disciplining, or terminating the plaintiff based on his proposed social or political speech but does not preclude the defendants from requiring that the plaintiff take Bakersfield College’s mandatory DEI training to be eligible to serve on a faculty screening committee nor does the injunction apply to official speech made as a faculty screening committee member.

Legislative Updates

On June 26, 2026, Illinois Governor JB Pritzker signed House Bill 1700 into law. The bill amends multiple Illinois energy and economic development laws by expanding labor, workforce development, and clean-energy initiatives, while revising regulations governing renewable energy projects, energy storage, utility programs, and energy project siting. The law will require certain applicants selected to supply renewable energy credits or receive grants for new energy storage facilities for procurement events to submit DEI plans with numerical goals for expenditures directed to businesses owned by minorities, women, persons with disabilities, LGBTQ individuals, veterans, or businesses in environmental justice communities. Selected applicants will also be required to file regular progress reports with the Illinois Commerce Commission.

The following Gibson Dunn attorneys assisted in preparing this client update: Jason Schwartz, Mylan Denerstein, Anna McKenzie, Cynthia Chen McTernan, Zakiyyah Salim-Williams, Molly Senger, Katherine Smith, Cate Harding, Cate McCaffrey, Anna Ziv, Benjamin Saul, Amy Pan, David Offit, Olympia Karageorgiou, Simon Moskovitz, Teddy Okechukwu, Beshoy Shokralla, Angelle Henderson, Lauren Meyer, Kameron Mitchell, Taylor Bernstein, Jerry Blevins, Chelsea Clayton, Sonia Ghura, Samarah Jackson, Shanelle Jones, Elvys Morales, Allonna Nordhavn, Felicia Reyes, Eric Thompson, Laura Wang, Taylor-Ryan Duncan, Sam Moan, Shreya Sarin, and Rachel Schwartz.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. Please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm’s Labor and Employment practice group, or the following practice leaders and authors:

Jason C. Schwartz – Partner & Co-Chair, Labor & Employment Group
Washington, D.C. (+1 202-955-8242, jschwartz@gibsondunn.com)

Katherine V.A. Smith – Partner & Co-Chair, Labor & Employment Group
Los Angeles (+1 213-229-7107, ksmith@gibsondunn.com)

Mylan L. Denerstein – Partner & Co-Chair, Public Policy Group
New York (+1 212-351-3850, mdenerstein@gibsondunn.com)

Zakiyyah T. Salim-Williams – Partner & Chief Diversity Officer
Washington, D.C. (+1 202-955-8503, zswilliams@gibsondunn.com)

Molly T. Senger – Partner, Labor & Employment Group
Washington, D.C. (+1 202-955-8571, msenger@gibsondunn.com)

Greta B. Williams – Partner, Labor & Employment Group
Washington, D.C. (+1 202-887-3745, gbwilliams@gibsondunn.com)

Cynthia Chen McTernan – Partner, Labor & Employment Group
Los Angeles (+1 213-229-7633, cmcternan@gibsondunn.com)

Anna M. McKenzie – Partner, Labor & Employment Group
Washington, D.C. (+1 202-955-8205, amckenzie@gibsondunn.com)

In France, an employee exposed to a toxic or harmful substance may, under certain conditions, seek compensation for anxiety resulting from the risk of developing a serious illness, even when no disease has yet been diagnosed.

In a ruling dated May 29, 2026 (Court of Cassation, Joint Chambers, May 29, 2026, No. 24-17.384), the Court of Cassation clarified that employees’ anxiety claims arising from exposure to chemical substances posing a high risk of serious illness are subject to a ten-year statute of limitations. Although the decision is procedural in nature, its practical implications are significant, as it substantially extends the period during which employers may be exposed to claims relating to past occupational exposure.

Claims for anxiety-related harm were originally recognized by French courts in cases involving asbestos exposure. Subsequent case law expanded the scope of this cause of action, allowing employees to seek compensation for anxiety arising from exposure to any chemical substance that presents a high risk of serious illness. The Court of Cassation’s decision of May 29, 2026 further broadens the scope of anxiety-related claims by extending the applicable limitation period. As a result, employers should take this risk into account when assessing and managing employee exposure to hazardous substances subject to enhanced health surveillance requirements.

I. The French Legal Framework in Brief

The French system distinguishes between compensation paid by social security and the employer’s supplementary liability.

A. Compensation Initially Covered by Social Security

The French Primary Health Insurance Fund (Caisse Primaire d’Assurance Maladie – CPAM), a local branch of the French social security system, determines whether an accident or illness is work-related. If it is recognized as such, the CPAM covers medical care and pays the employee compensation or a pension.

This system is funded by specific contributions paid on wages by employers for work-related accidents and occupational illnesses. The amount of these contributions may vary depending on the number of recognized work-related accidents and occupational illnesses within the company.

B. Additional Financial Liability in the Event of Employer Negligence

When the employer was, or should have been, aware of the danger and failed to take the necessary measures to protect the employee, French courts may hold that such conduct amounts to “inexcusable negligence.” In practice, this concept corresponds to a particularly serious breach of the duty of prevention and safety.

The victim may then be entitled to additional compensation. This compensation is generally fronted by the CPAM, which then seeks reimbursement from the employer. The final financial cost is therefore borne by the company.

Finally, and in addition, employees, even those who are not ill, may be awarded compensation for anxiety-related damages, which compensates for the constant worry experienced by an employee due to exposure to a toxic or harmful substance that poses a risk of developing a serious illness. Initially recognized in asbestos-related litigation, this remedy is now available to any employee who can demonstrate such exposure, regardless of the substance involved (Cass. plen. ass., Apr. 5, 2019, No. 18-17.442; Cass. soc., Dec. 15, 2021, No. 20-11.046).

II. The Court of Cassation Upholds a Ten-Year Statute of Limitations

Until the May 29, 2026, ruling, French courts differed on the applicable statute of limitations for claims relating to anxiety-related harm: five years under general civil law regime or ten years for claims based on bodily injury.

The Joint Chamber has just ruled in favor of the ten-year statute of limitations. It holds that anxiety-related harm resulting from exposure to a toxic or harmful substance constitutes harm resulting from bodily injury and therefore falls under Article 2226 of the French Civil Code.

In principle, this statute of limitations begins to run from the date the injury is considered to have stabilized, that is, from the moment the victim’s condition is deemed medically stable. However, when no date of stabilization has been medically determined and the victim claims only anxiety-related harm, the statute of limitations begins to run from the date on which the victim becomes aware of the exposure, the identity of the liable party, and the risks involved, provided that this date cannot precede the end of the exposure.

For companies, this decision extends the period during which a claim for compensation may be filed and, in practice, reinforces the importance of maintaining, over the long term, records related to risk assessment, preventive measures, employee information, and exposure monitoring.

III. A Clarification of the Statute of Limitations, Without Calling into Question the Conditions for Compensation

The ruling does not make compensation automatic. The employee must still establish:

exposure to a toxic or harmful substance;
a high risk of developing a serious medical condition; and
genuine, personal anxiety directly related to that exposure.

Merely being exposed to a hazardous substance is therefore not sufficient. The claimant must demonstrate damages specific to their situation, without benefiting from an automatic presumption (Cass. soc., Oct. 13, 2021, No. 20-16.584). Nor can they receive double compensation if the same anxiety disorders have already been compensated for under another claim.

Why Is This Decision Important for International Corporations?

This decision is of particular interest to international corporations conducting industrial operations in France. Anxiety-related damages may arise from exposure to any toxic or harmful substance that poses a high risk of causing a serious medical condition, and are therefore not limited to asbestos-related litigation. Companies may thus face this type of claim for up to ten years from the date on which the employees become aware of the health hazard.

The following Gibson Dunn lawyers prepared this update: Pierre-Emmanuel Fender and Mélanie Gerrer.

Gibson Dunn lawyers are available to assist in addressing any questions you may have about these issues. Please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any leader or member of the firm’s Transnational Litigation or ESG: Risk, Litigation, & Reporting practice groups:

Pierre-Emmanuel Fender – Paris (+33 1 56 43 13 00, pefender@gibsondunn.com)

Mélanie Gerrer – Paris (+33 1 56 43 13 00,mgerrer@gibsondunn.com)

Ferdinand Fromholzer – Munich (+49 89 189 33-270, ffromholzer@gibsondunn.com)

Markus S. Rieder – Munich (+49 89 189 33.260, mrieder@gibsondunn.com)

Robert Spano – London/Paris (+33 1 56 43 13 00, rspano@gibsondunn.com)

From the Derivatives Practice Group: This week, the CFTC reported on its first Agricultural Advisory Committee meeting of 2026.

New Developments

CFTC’s Agricultural Advisory Committee Joins Chairman Selig in Washington at First Meeting of 2026. On July 31, the CFTC reported on its first Agricultural Advisory Committee (AAC) meeting of 2026. Following opening remarks from CFTC Chairman Michael Selig, Senator Tommy Tuberville (R-AL), and AAC Chairman Ed Prosser, membership discussed the Basel III proposal, risk management tools for agricultural end users, 24/7 trading and emerging markets, and recent CFTC activity in the agricultural industry. The full report is available here. [NEW]

CFTC Seeks Public Comment on Notice of Proposed Rulemaking Concerning Affiliations Among Certain CFTC-Regulated Entities. On July 30, the CFTC published a Notice of Proposed Rulemaking seeking public comment on amendments to Part 37, Part 38, and Part 39 of the CFTC’s regulations, as well as Commission regulations 1.52 and 1.55. Comments will be accepted for 60 days following publication in the Federal Register.

CFTC Releases Advisory on Self-Certification of an Event Contract Series. On July 24, the CFTC’s Division of Market Oversight issued an advisory reminding designated contract markets about the proper procedures for submitting self-certifications of an event contract series. The advisory addresses concerns about the practice of submitting broad, template-style certifications that combine many potential event contract variations into a single certification.

CFTC Staff Issues No-Action Position on Designated Contract Market Procedures. On July 24, the CFTC’s Division of Market Oversight announced it has issued a no-action letter to Kraken Derivatives Exchange Inc., formerly Small Exchange Inc., a designated contract market, which addresses certain procedures related to dormancy. The no-action position is time-limited and subject to the terms and conditions in the division’s no-action letter. This position is in response to a request from Kraken Derivatives Exchange Inc. to extend the no-action position granted to KDE in CFTC Letter No. 25-46.

CFTC Extends Public Comment Period on Proposed Rule on the Extension of Standard Futures Contracts to 24/7 Trading and on Perpetual Contracts Referencing Physically Delivered or Storable Energy Commodities. On July 23, the CFTC announced it is extending the deadline for public comment on two related developments in the energy derivatives markets: the extension of standard futures contracts to 24/7 trading and the potential listing of energy commodity perpetual contracts. Based on requests by commenters and the addition of several questions to the request, the deadline is being extended by 30 days to August 26, 2026.

Chairman Selig Announces Agenda for July 29 Agricultural Advisory Committee Meeting in Washington. On July 23, CFTC Chairman Michael S. Selig, sponsor of the Agricultural Advisory Committee (AAC), released the agenda for the AAC’s first meeting of 2026. Among other topics, attendees will discuss the Basel III proposal, risk management tools for agricultural end users, 24/7 trading and emerging markets, and recent CFTC activity in the agricultural industry. The full agenda can be found here.

New Developments Outside the U.S.

EBA, EIOPA and ESMA Call for Enhanced Governance and Consistent Supervision to Mitigate ICT Risks from Frontier AI Models. On July 31, the European Supervisory Authorities (ESAs) published a statement calling for a cross-sectoral, risk-based and consistent supervisory approach to mitigate the ICT risks stemming from frontier AI models. The ESAs outlined measures to help financial entities strengthen their operational resilience against cyber risks linked to frontier AI models.

ESMA Authorizes EuroCTP as the Consolidated Tape Provider for Shares and Exchange-traded Funds. On July 27, ESMA authorized EuroCTP B.V. (EuroCTP) to operate as the Consolidated Tape Provider (CTP) for shares and exchange-traded funds (ETFs). According to ESMA, EuroCTP will be responsible for operating the consolidated tape for shares and ETFs for a period of five years under ESMA’s direct supervision. The five-year period will begin on the date EuroCTP starts its operations.

New Industry-Led Developments

ISDA Publishes US Basel III Endgame Trading and Capital Markets Impact 2026 Update. On July 31, ISDA published a quantitative impact study with input from eight US global systemically important banks. The report shows that the market risk portion of the framework, known as the Fundamental Review of the Trading Book, would increase market risk capital by approximately 89% under the standardized approach applied across the full portfolio, and by approximately 30% under a blend of internal models and standardized approach that reflects current model approvals.

ISDA Publishes Research Note on CDS Market Dynamics. On July 29, ISDA published a report that concluded global credit default swap (CDS) market activity reached a record $41.8 trillion in 2025, surpassing the previous peak of $38.7 trillion in 2022. Index CDS drove the increase, accounting for 93.3% of total activity and reaching a record $39.0 trillion.

ISDA Publishes ISDA-Actrix US Treasury Repo Market Clearing Indicators for June 2026. On July 27, ISDA published the ISDA-Actrix US Treasury Repo Market Clearing Indicators for June 2026, which illustrate central clearing adoption in the US Treasury repo market. According to ISDA, sponsored cleared repo volumes are used as a proxy to monitor client participation in central clearing, a key objective of the Securities and Exchange Commission’s US Treasury clearing mandate.

ISDA Submits Letter to CFTC on Public Interest Determinations for Event Contracts. On July 27, ISDA submitted a letter to the CFTC on the CFTC’s proposed rulemaking on public interest determinations for event contracts published in the Federal Register on June 12, 2026. According to ISDA, its letter emphasized the importance of market integrity as well as legal and regulatory certainty regarding the scope of event contracts that are swaps and/or security-based swaps.

ISDA Responds to ASIC Consultation on Pre-hedging Guidance. On July 27, ISDA submitted a response to the Australian Securities and Investments Commission’s (ASIC) consultation on its proposed regulatory guide on pre-hedging. ISDA’s response emphasized the importance of international consistency, including alignment with the International Organization of Securities Commissions’ (IOSCO) final report on pre-hedging, and supports a proportionate, principles-based and risk-based approach.

The following Gibson Dunn attorneys assisted in preparing this update: Jeffrey Steiner, Adam Lapidus, Hayden McGovern, Karin Thrasher, and Alice Wang.

Jeffrey L. Steiner, Washington, D.C. (202.887.3632, jsteiner@gibsondunn.com)

Michael D. Bopp, Washington, D.C. (202.955.8256, mbopp@gibsondunn.com)

Michelle M. Kirschner, London (+44 (0)20 7071.4212, mkirschner@gibsondunn.com)

Darius Mehraban, New York (212.351.2428, dmehraban@gibsondunn.com)

Jason J. Cabral, New York (212.351.6267, jcabral@gibsondunn.com)

Adam Lapidus, New York (212.351.3869, alapidus@gibsondunn.com )

Stephanie L. Brooker, Washington, D.C. (202.887.3502, sbrooker@gibsondunn.com)

William R. Hallatt, Hong Kong (+852 2214 3836, whallatt@gibsondunn.com )

David P. Burns, Washington, D.C. (202.887.3786, dburns@gibsondunn.com)

Marc Aaron Takagaki, New York (212.351.4028, mtakagaki@gibsondunn.com)

Hayden K. McGovern, Dallas (202.887.3569, hmcgovern@gibsondunn.com)

Karin Thrasher, Washington, D.C. (202.887.3712, kthrasher@gibsondunn.com)

Alice Yiqian Wang, Washington, D.C. (202.777.9587, awang@gibsondunn.com)

Gibson Dunn announces release of “Lexology Panoramic: Defamation & Reputation Management 2026 (USA).”

Gibson Dunn is pleased to announce the release of Lexology Panoramic: Defamation & Reputation Management 2026 (USA). The publication is the U.S. chapter of Lexology Panoramic’s Defamation and Reputation Management global guide. The chapter is a survey of key laws, legal tests, rules on libel and slander, case management, anti-SLAPP statutes, and criminal issues concerning defamation jurisprudence and the First Amendment in the United States.

Gibson Dunn partners Amer S. Ahmed and Connor S. Sullivan, and associate Apratim Vidyarthi authored the chapter.

The chapter is live and FREE for a limited time to access HERE.

The following Gibson Dunn lawyers contributed to this publication: Amer S. Ahmed, Connor S. Sullivan, and Apratim Vidyarthi.

Gibson Dunn’s renowned First Amendment and Free Expression practice brings decades of experience advising and representing clients in matters involving private claims and government actions and regulations that affect fundamental freedoms and the free exchange of ideas. The firm’s leading Media, Entertainment and Technology practice represents the biggest and the brightest in the Media, Entertainment, and Technology industries.

Amer S. Ahmed is a partner in the New York office of Gibson Dunn and a member of the firm’s Litigation; Appellate and Constitutional Law; First Amendment and Free Expression, and Media, Entertainment and Technology practice groups. Amer’s practice focuses on representing institutional and individual clients in a variety of high-profile litigation matters at the investigatory, trial, and appellate levels, ranging from witness preparation to product-liability actions, white-collar criminal defense, and commercial disputes.

Connor S. Sullivan is a partner in Gibson Dunn’s New York office and Co-Chair of the First Amendment and Free Expression practice group with significant experience in litigation involving the First Amendment, especially defamation defense, for technology companies, media and entertainment clients, and news media organizations. A member of the Media, Entertainment and Technology practice group, he represents companies in high-stakes litigation in state and federal court, including multiple jury trials involving billions of dollars in potential damages.

Contact Information:

For assistance navigating these issues, please contact the Gibson Dunn lawyer with whom you usually work, the leaders or members of the firm’s First Amendment & Free Expression or Media, Entertainment & Technology practice groups, or the following authors:

Amer S. Ahmed – New York (+1 212.351.2427, aahmed@gibsondunn.com)
Connor S. Sullivan – New York (+1 212.351.2459, cssullivan@gibsondunn.com)

Gorobets v. Jaguar Land Rover North America, LLC, S287946 – Decided August 6, 2026

The California Supreme Court held today that a settlement offer under Code of Civil Procedure section 998 may present a choice between alternative sets of terms, so long as the offer clearly presents the alternatives and at least one alternative is sufficiently certain to permit an accurate valuation at the time the offer is made.

“There is nothing inherently uncertain about asking an offeree to evaluate alternative sets of settlement terms before deciding whether to accept either or neither of them.”

Justice Corrigan, writing for the Court

Background:

Code of Civil Procedure section 998 encourages settlement by incentivizing parties to make reasonable offers and penalizing parties that reject them. If a plaintiff does not accept a defendant’s valid settlement offer and then fails to obtain a more favorable judgment, it cannot recover its postoffer costs and must pay the defendant’s postoffer costs. To be valid under section 998, the offer’s terms must be sufficiently certain or specific.

Vadim Gorobets leased a Land Rover LR4 and later sued Land Rover, claiming the car was a lemon. Land Rover made a section 998 offer proposing two alternative sets of terms for the plaintiff to choose from: (1) a lump-sum payment of $85,000 or (2) reimbursement of a few categories of costs. Gorobets did not elect either. The case proceeded to trial, and the jury awarded Gorobets $76,000 in damages. The trial court ruled that Land Rover’s section 998 offer was valid and thus awarded Land Rover postoffer costs. It denied Gorobets’s bid for postoffer attorneys’ fees, which had climbed to over half a million dollars.

The Court of Appeal affirmed. The court held that section 998 prohibits what the court characterized as two simultaneous offers, but it concluded that Gorobets had made only one valid offer—the lump-sum offer—because the category-based offer was insufficiently certain. The California Supreme Court then granted review.

Issue Presented:

Is a settlement offer under Code of Civil Procedure section 998 that contains two options inherently invalid, presumptively invalid, or invalid or partially or entirely valid depending on a separate and independent evaluation of each option?

Court’s Holdings:

A section 998 offer that presents two alternative sets of terms and gives the offeree the right to choose between them can be valid so long as (1) the offer is structured so that it clearly presents the available alternatives and (2) at least one of the alternatives is sufficiently certain to permit an accurate valuation at the time the offer is made.

What It Means:

The decision reinforces section 998’s policy of encouraging early settlement through financial incentives. Permitting alternative-choice offers promotes this policy, the Court explained, by providing the parties with the flexibility to explore multiple avenues toward resolution.
The decision lets offerors fashion alternative settlement terms that are best suited to the circumstances of their cases. It also means offerees must carefully evaluate each alternative before deciding whether to accept or reject the offer.
The decision emphasizes that an offeror still bears the burden of showing the validity of its offer. An offer should clearly delineate the specific terms attributable to each choice, specify that the alternatives are mutually exclusive so that only one may be selected, and clearly communicate how the offeree’s acceptance is to be conveyed. And to be valid, an offer’s terms also must be independently capable of an accurate valuation, both at the time it is made and by the trial court in hindsight.
Because cost-shifting is measured against the highest-value valid alternative, defendants making section 998 offers have a strong incentive to pair a complex alternative with a clean, easily valued lump sum. Plaintiffs, for their part, must measure any expected recovery against the most valuable valid alternative.

The Court’s opinion is available here.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the California Supreme Court. Please feel free to contact the following practice group leaders:

Appellate and Constitutional Law

Thomas H. Dupree Jr. +1 202.955.8547 tdupree@gibsondunn.com	Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com	Julian W. Poon +1 213.229.7758 jpoon@gibsondunn.com	Jeffrey B. Wall +1 202.955.8533 jwall@gibsondunn.com
Bradley J. Hamburger +1 213.229.7658 bhamburger@gibsondunn.com	Michael J. Holecek +1 213.229.7018 mholecek@gibsondunn.com	Daniel R. Adler +1 213.229.7634 dadler@gibsondunn.com

This alert was prepared by Matt Aidan Getz and Yan Zhao.

With the Regulations now in force, parties have a detailed procedural framework for merger notification, absent since the introduction of the 2023 Competition Law.

On 30 July 2026, the Executive Regulations (Cabinet Resolution No. 59 of 2026) (the Regulations) to the UAE Competition Law (Federal Decree-Law No. 36 of 2023) (the Competition Law), came into effect.

When the Competition Law was introduced in 2023, the Ministry positioned the updated regime as a catalyst for domestic and foreign investment and a core part of the UAE’s broader economic diversification agenda, rather than a purely technical reform. A significant driver was the growth of the UAE’s digital economy, which had outpaced the 2012 regime. The Competition Law expanded the substantive framework and introduced a more comprehensive merger control regime, aligning the UAE with international best practice as the volume of trade and transactions with a UAE nexus continues to rise.

The Regulations are the much anticipated, procedural building block of the UAE’s updated Competition Law framework. Alongside Cabinet Resolution No. 3 of 2025, which sets the thresholds for mandatory merger filings, and the Guidelines on Relevant Market Definition (the Guidelines) published by the Ministry of Economy and Tourism (the Ministry) in July 2026, the Regulations give practical effect to the regime established by the Competition Law in 2023.

Scope and Applicability

Like other jurisdictions with robust competition law regimes, the Competition Law reaches beyond the UAE’s borders. This is reflected in Article 3, which extends the Competition Law to undertakings carrying on economic activities in the UAE, the exploitation of intellectual property rights inside and outside the UAE, and economic activities carried on outside the UAE affecting competition within it.

This effects-based reach has particular significance for digital businesses. As the Competition Law treats a relevant market as capable of being digital as well as physical, an online platform or service supplied from outside the UAE may, therefore, fall within scope where its activities affect competition in the UAE, even without any physical presence in the country.

General Exemptions

Pursuant to Article 4 of the Competition Law, the following activities are exempt from its application:

activities involving goods and services that are regulated by another law or regulatory body with specific procedures to regulate anti-competitive practices;
activities involving Federal government-owned undertakings, where supported by a Cabinet Resolution; and
activities involving Emirate government-owned undertakings, where supported by a resolution of the relevant Emirate-level government.

These exemptions are narrower than under the 2012 regime, and their boundaries are still being drawn. The government ownership exemption now operates by specific designation: the federal list has been issued by Cabinet Resolution No. 33/6F of 2024[1] and the Emirate of Ajman (Executive Council Resolution No. 6 of 2024) has also published its own list, while equivalent legislation for the remaining emirates is awaited. The previous regime extended exemptions to entities owned or controlled by the government, but Article 4 confines the exemptions to those specifically designated by law or supported by a resolution. Government-owned or related entities should therefore not assume that they fall outside the regime. Consolidated, publicly accessible guidance from the Ministry identifying the exempt entities and the resolutions designating them would be a welcome development to aid certainty as the position develops.

Specific Exemptions

In addition, where activities fall within the scope of the Competition Law, parties can apply to the Ministry for specific exemptions under Article 9(1) of the Competition Law, by establishing certain criteria are met, namely, that the activity:

promotes economic development, improves the undertakings’ performance and competitiveness, develops production or distribution systems, or otherwise benefits consumers; and
does not: (i) impose limitations or restrictions that go beyond what is necessary to achieve the objectives, or (ii) eliminate competition in the relevant market (or a significant part of the relevant market).

In practice, a specific exemption may be useful but will require substantive economic justification, including a relevant market study, three years of audited financials and a report establishing that the activity is genuinely necessary. Ultimately, the onus is on the applicant to prove that the claimed efficiencies outweigh any harm to competition, meaning this form of exemption carries both an evidentiary burden and a timing cost that are best factored in early.

Merger Control

The UAE competition law framework operates as a mandatory and suspensory merger control regime for “economic concentrations”. Under Article 12(1) of the Competition Law, parties involved in a transaction with an economic concentration in the UAE are prohibited from completing such transaction before obtaining clearance from the Ministry.

What is an economic concentration?

In essence, an economic concentration is a transaction that transfers control of one undertaking to another. It captures mergers, and acquisitions of shares, assets or other rights that give an undertaking, alone or together with others, direct or indirect control over another entity. The concept is drawn broadly and turns on the acquisition of control rather than on the form of the transaction itself. Whilst “control” is not defined in the legislation, parties would be prudent to assume it will be construed broadly. For instance, in jurisdictions such as the EU, control includes the ability to exercise decisive influence over an undertaking, which can include veto or approval rights over strategic commercial decisions such as the business plan, budget, or the appointment of senior management.

Merger control filing: a wider net of notifiable transactions

A transaction with an economic concentration, that is not otherwise exempt, is notifiable to the Ministry if it meets the turnover threshold or the market share threshold, which are each set out in Article 3 of Cabinet Resolution No. (3) of 2025 to the Competition Law:

a. Turnover threshold

If the total value of annual sales of such undertakings in the relevant market within the UAE, during the last fiscal year, exceeds three hundred million dirhams (AED 300,000,000).

b. Market share threshold

If the total share of such undertakings exceeds forty percent (40%) of the total transactions in the relevant market within the UAE during the last fiscal year.

Both the turnover and market share thresholds are measured by reference to the relevant market (see further on “Relevant Market” below), with the turnover threshold being a new test brought in pursuant to the Competition Law in 2023. Under the previous regime, notification turned on market share alone.

Notably, either notification threshold may be met by one party alone. A filing obligation may therefore theoretically arise from the acquirer’s pre-existing position in the relevant market, rather than from the incremental effect of the transaction. Consequently, even a relatively small acquisition by a large incumbent may require prior notification.

If either threshold, turnover or market share, is met, the transaction is notifiable and the parties must submit an application for approval of the economic concentration to the Ministry.

Securing clearance

A filing must be made at least 90 days before completion of the transaction (Article 12(1) of the Competition Law). The obligation falls on the acquiring undertaking (the purchaser) in the case of an acquisition, and on all parties jointly in the case of a merger or joint venture (Article 11 of the Regulations).

The Regulations set out the contents of a filing (Article 10 of the Regulations). These include the parties’ constitutional documents and general KYC information, the agreement(s) underlying the proposed concentration, audited financial statements for the preceding three financial years and, most substantively, a report on the “economic dimensions” of the transaction, covering the relevant market, competitors, customers, affected markets, and the transaction’s likely positive and negative effects on the relevant market, together with any commitments proposed to mitigate them.

Once the Ministry confirms the application is complete, the Minister for Economy and Tourism has 90 days to issue a decision, extendable by a further 45 (Article 13(2) of the Competition Law). If no decision approving the transaction is issued within the period, the application is deemed rejected. This is significant: unlike many other merger control regimes (including the US), where expiry of the statutory review period results in the concentration being deemed cleared, silence here counts against the parties. Parties will therefore need to build adequate time into their transaction timetable to secure an express clearance. In practice, clearance should be a condition precedent to completion of the transaction.

Gun-jumping and failure to notify

Closing a notifiable transaction before the Ministry has granted clearance (“gun-jumping”) exposes the parties to a fine of between 2% and 10% of the annual sales of the goods or services concerned during the most recent fiscal year or, where those sales cannot be calculated, a fine of between AED 500,000 and AED 5,000,000 (Article 25 of the Competition Law). The same exposure applies to a failure to notify a notifiable transaction at all; the Ministry may examine an economic concentration, and impose the resulting penalties, whether before or after completion (Article 18 of the Regulations).

Notably, the Regulations do not expressly provide for the unwinding of a completed economic concentration. The principal consequences of closing without clearance, or of failing to notify, are therefore financial, together with the Ministry’s power to review the transaction after completion and to require the parties to comply with its requirements, including the provision of information and, potentially, conditions of the kind that may be attached to a clearance. The courts may also impose broader judicial sanctions, including ordering the temporary closure of the undertaking for a period of between three and six months, and in competition proceedings generally may order a stay or suspension of the relevant conduct pending final judgment (Articles 29 and 31 of the Competition Law).

Which authority has jurisdiction?

By default, review of an economic concentration sits with the Ministry, which is the authority the parties will engage in practice. Competence can, however, rest elsewhere in two cases: (i) an emirate’s competent authority may handle a transaction confined to a single emirate (Article 21 of the Competition Law; Article 29 of the Regulations); and (ii) a sectoral regulator with no competition rules of its own may take on the review with the Ministry’s approval (Article 22 of the Competition Law; Article 30 of the Regulations). In each case the same substantive and procedural rules apply and the Ministry remains involved.

Third-party participation

The Regulations formalise a role for third parties in the review of merger control filings filed with the Ministry. Once the Ministry publishes basic details of a notified transaction on its website, interested parties have 15 working days to submit their views, or to lodge a reasoned objection under a defined objection timetable (Articles 15 and 16 of the Regulations; Article 13(4)–(6) of the Competition Law). A party wishing to participate must establish that it is genuinely affected (Article 15(3) of the Regulations). This is a new development as UAE merger control filings had not previously carried this degree of public visibility. For sensitive deals, the involvement of third parties raises two considerations, which transacting parties should factor into their planning: (i) anticipating who is likely to object to the transaction; and (ii) marking confidential material carefully and providing non-confidential summaries of such material, when the filing is assembled (Article 10(4) of the Regulations).

Relevant Market

In July 2026, the Ministry published the Guidelines setting out the methodology parties are expected to apply when defining the relevant market. This is the first published methodology for that exercise, with the Guidelines drawing expressly on European Commission practice. As both notification thresholds are measured by reference to the relevant market, defining it is the practical starting point of any merger control filing analysis.

The Guidelines apply the Competition Law’s definition of a relevant market, which looks to the substitutability of relevant products and services within a relevant geographic area. The product market analysis focuses primarily on demand-side substitutability: whether customers would switch to alternative goods or services in response to a small but significant and non-transitory price increase, typically of 5% to 10% (the SSNIP test). Where price and sales data are available, that switching can be measured through the price elasticity of demand test, which gauges how far demand falls or moves to substitutes as price rises.

A quality-based test, the Small but Significant and Non-Transitory Decrease in Quality (SSNDQ) test, is also introduced in the Guidelines. This test is drawn from European Commission practice on the quality of digital services and used where price is not the main parameter of competition. This test asks whether a hypothetical monopolist could profitably degrade quality rather than raise price. The Guidelines note that it is harder to apply, given the difficulty of measuring quality, and that it is more likely to feature in abuse of dominance cases than in merger control.

The analysis of the relevant market also requires determination of its geographic scope, which may be Emirate-level, UAE-wide, or broader. The Guidelines look to whether competitive conditions are homogeneous across the geographies being examined. For example, similar services subject to strict licensing and regulatory requirements in one geography but not the other indicate that competitive conditions are not homogeneous, potentially narrowing the geographic scope of a relevant market. That scope is not fixed by where the parties operate today, instead the assessment considers whether demand or supply would move to alternatives elsewhere if local prices rose. Barriers to that movement, such as transport cost and distance, import barriers, or limited infrastructure, tend to point to a narrower geographic market. For digital businesses, the relevant area may be an online marketplace rather than a physical territory. Where it is, the physical barriers above may not be relevant, and the boundary turns instead on factors such as whether language or regulation confine users to a specific geography or point to a wider, cross-border market.

Conclusion

With the Regulations now in force, parties have a detailed procedural framework for merger notification, absent since the introduction of the 2023 Competition Law. The Guidelines also give parties for the first time in the UAE, a published methodology for defining the relevant market. Both are welcome developments that provide a clearer and more predictable path to clearance.

[1] No publication of Cabinet Resolution No. 33/6F of 2024 in the UAE Official Gazette has been identified.

The following Gibson Dunn lawyers prepared this update: Andrew Steele, Attila Borsos, Alana Tinkler, Caitlin Moss, and Sherif Hashem.

Gibson Dunn lawyers are available to assist in addressing any questions you may have regarding the issues discussed in this update. Please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any leader or member of the firm’s Mergers and Acquisitions or Antitrust and Competition practice groups:

Andrew Steele – Mergers and Acquisitions, Abu Dhabi
(+971 2 234 2621, asteele@gibsondunn.com)

Attila Borsos – Head of Cross-Border Merger Control and Foreign Investment, Brussels
(+32 2 554 72 10, aborsos@gibsondunn.com)

Alana Tinkler – Antitrust and Competition, London
(+44 20 7071 4906, atinkler@gibsondunn.com)

Caitlin Moss – Mergers and Acquisitions, Dubai
(+971 4 318 4615, cmoss@gibsondunn.com)

Sherif Hashem – Mergers and Acquisitions, Abu Dhabi
(+971 2 234 2623, shashem@gibsondunn.com)

We are pleased to provide you with Gibson Dunn’s Accounting Firm Quarterly Update for Q2 2026. The Update is available in .pdf format at the below link, and addresses news on the following topics that we hope are of interest to you:

PCAOB, SEC Add Enforcement Senior Leadership
PCAOB Staff Launches Firm Consultation Process Regarding Application of PCAOB Standards
SEC and PCAOB Seek Public Comment on Strategic Plans and Agendas
PCAOB Proposes Targeted Amendments to QC 1000
PCAOB Restricts Naming of Audit Clients and Drops “Gag Rule” in Settled Enforcement Actions
Recent PCAOB Board Member Christina Ho Publishes Article Criticizing PCAOB and Calling for Structural Reforms
Supreme Court Holds SEC May Obtain Disgorgement Without Proving Investor Pecuniary Harm in Sripetch v. SEC
Senator Warren Urges PCAOB to Strengthen Standard-Setting, Inspections, and Enforcement
Other Recent SEC and PCAOB Developments

Please let us know if there are topics that you would be interested in seeing covered in future editions of the Update.

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Warmest regards,
Jim Farrell
Michael Scanlon
David Ware

Accounting Firm Advisory and Defense Practice Group, Gibson, Dunn & Crutcher LLP

In addition to the practice group chairs, this update was prepared by Monica Limeng Woolley, Hayden McGovern, Nicholas Whetstone, Ty Shockley, Garrick R. Donnelly, and Jimmy Scoville.

Practice Group Contacts:

Jim Farrell – Co-Chair, New York (+1 212-351-5326, jfarrell@gibsondunn.com)

Michael Scanlon – Co-Chair, Washington, D.C. (+1 202-887-3668, mscanlon@gibsondunn.com)

David Ware – Washington, D.C. (+1 202-887-3652, dware@gibsondunn.com)

Unit will focus resources on investigation of suspected accounting and financial reporting fraud and other related misconduct in accounting and auditing.

Earlier today, the Securities and Exchange Commission announced it is establishing a new specialized Financial Reporting and Accounting Unit within the Division of Enforcement. As we anticipated in our 2026 Securities Enforcement Mid-Year Update, accounting, financial reporting, and disclosure matters are shaping up to occupy a significant share of the Division’s docket.

The unit will be led by Timothy Zimmerman, who served as Deputy General Counsel of accounting firm RSM US following twelve years in practice at Gibson Dunn. Mr. Zimmerman will report to Principal Deputy Director Osman Nawaz.

The creation of the Financial Reporting and Accounting Unit is a natural step for Director Woodcock, who has consistently emphasized the importance of accounting and financial-reporting disclosures. Director Woodcock previously chaired the Division’s Financial Reporting and Audit Task Force and began his career as an auditor with a national accounting firm. Director Woodcock described the unit as “expand[ing] on the Division’s current and historical efforts to crack down on bad actors in the accounting and auditing profession.”

The SEC’s press release notes that the unit will “pursue accounting and financial reporting fraud cases as well as general misconduct in the accounting and auditing areas.” The unit will work with staff across all SEC divisions and will be staffed by attorneys and accountants.

In anticipation of this renewed focus, public companies should continue their efforts in ensuring robust financial reporting reviews in periodic reports, evaluating and strengthening internal controls over financial reporting, and responding thoroughly to complaints alleging potential accounting fraud and other financial reporting irregularities. See our Mid-Year Update for a discussion of recent cases highlighted by Director Woodcock in his remarks at the MFA Legal & Compliance Conference, which are examples of the types of actions one likely can expect to see in the future.

The following Gibson Dunn lawyers prepared this update: Mark Schonfeld, Jina Choi, Jim Farrell, Tina Samanta, Michael Scanlon, David Ware, and Liesel Schapira.

Gibson Dunn lawyers are available to assist in addressing any questions you may have about these developments. Please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any leader or member of the firm’s Securities Enforcement practice group:

Mark K. Schonfeld – New York (+1 212.351.2433, mschonfeld@gibsondunn.com)

Jina L. Choi – San Francisco (+1 415.393.8221, jchoi@gibsondunn.com)

Jim Farrell – New York (+1 212.351.5326, jfarrell@gibsondunn.com)

Tina Samanta – New York (+1 212.351.2469, tsamanta@gibsondunn.com)

Michael Scanlon – Washington, D.C.(+1 202.887.3668, mscanlon@gibsondunn.com)

David C. Ware – Washington, D.C. (+1 202.887.3652, dware@gibsondunn.com)

This edition of Gibson Dunn’s Federal Circuit Update for June 2026 summarizes the current status of petitions pending before the Supreme Court, Federal Circuit news, and recent Federal Circuit decisions concerning attorney’s fees under 35 U.S.C. § 285, verdict forms, estoppel under 35 U.S.C. § 351(e)(2), and claiming priority to a provisional application.

Federal Circuit News

Noteworthy Petitions for a Writ of Certiorari:

There was a potentially impactful petition filed before the Supreme Court since our last update:

Intel Corp. v. Squires (US No. 26-73): The question presented is “whether 35 U.S.C. § 314(d), which bars judicial review of ‘[t]he determination . . . whether to institute an inter partes review,’ applies even when no institution decision is challenged to preclude review of PTO rules that set standards governing institution decisions, particularly when those rules are based on a misinterpretation of § 314(a) to supposedly confer unlimited discretion on the Director to deny institution for any reason.” The response brief is due August 17, 2026.

We provide an update below of the petitions pending before the Supreme Court, which were summarized in our May 2026 update:

In Sunoco Partners Marketing & Terminals L.P. v. Powder Springs Logistics, LLC (US No. 25-1387), the respondents waived their right to respond. The Court will consider this petition at its September 28, 2026 conference.
In Google LLC v. VirtaMove, Corp. (US No. 25-1230), after the respondents waived their right to file a response, the Court requested a response. VirtaMove filed its response brief on July 13, 2026. The USPTO requested an extension and its response brief is due Septmeber 11, 2026. Seven amicus briefs have been filed.

Federal Circuit News:

Notice of Proposed Amendments to the Federal Circuit Rules of Practice. The Federal Circuit announced proposed amendments to Federal Circuit Rules of Practice 32 (eliminating the use of passim) and the Practice Note to Rule 32 (incorporation by reference cannot be used to exceed word count). The full article is here.

Federal Circuit Schedules October 2026 Session for Chicago. The Federal Circuit announced that it intends to sit in Chicago, Illinois as part of its October 2026 session. The announcement is here.

Key Case Summaries (June 2026)

AGI SureTrack LLC v. Farmers Edge Inc., Nos. 24-1730, 24-1830 (Fed. Cir. June 2, 2026): AGI sued Farmers Edge for infringing patents relating to automated systems for capturing, processing, and sharing farming data. At summary judgment, the district court held the asserted patents were directed to patent-ineligible subject matter under 35 U.S.C. § 101 and held that the case was not exceptional for purposes of awarding attorney’s fees under 35 U.S.C. § 285.

The Federal Circuit (Mayer, J., joined by Moore, C.J. and Lourie, J.) affirmed-in-part, vacated-in-part, and remanded . The Court affirmed the district court’s determination that the patents were patent ineligible under § 101, because the claims were directed to the abstract idea of collecting, analyzing, and transmitting “farming data” and there was no inventive concept in “automation to speed up the process of collecting and decoding data,” a feature inherent with applying an abstract idea on a computer. Regarding exceptionality, Farmers Edge argued that the district court erred in entering a no exceptionality judgment without providing any explanation for its ruling and that it should have been afforded an opportunity to present argument and evidence. The Court agreed and vacated the district court’s no exceptionality ruling because “there was nothing” in “the record on appeal which would” allow the Court to “appropriately review whether the court abused its discretion in concluding that the case was not exceptional.” The Court remanded with instructions to reassess exceptionality and determine if attorney’s fees under § 285 is appropriate after giving both parties an adequate opportunity to present argument on the issue.

Ollnova Technologies Ltd. v. ecobee Technologies ULC, Nos. 25-1045, 25-1046 (Fed. Cir. Jun. 4, 2026): Ollnova sued ecobee for infringement of four patents directed to an integrated system of components that automates a process control within a building, such as components used to manage HVAC in a building. The district court held a jury trial, and despite the parties’ agreement to require separate questions on the verdict form for each patent as to infringement, included only a single infringement question covering all the asserted patents. The jury found at least one of the patents infringed and awarded $11.5 million. Additionally, even though the district court held that one of the patents was directed to an abstract idea, it held that factual disputes remained at Alice step two. However, the jury was not instructed so and the verdict form did not specify that the claims were directed to an abstract idea. The jury ultimately found the claims were not directed only to well understood, routine, and conventional technology at Alice step two.

The Federal Circuit (Chen, J., joined by Cunningham and Stark, JJ.) affirmed-in-part, dismissed-in-part, and vacated and remanded . First, the Court held that the single combined infringement question on the verdict form was an abuse of discretion because it violated “the defendant’s right to a unanimous verdict on each legal claim against it as it relates to infringement,” and therefore vacated the infringement verdict and the damages award. The Court also held that the § 101 instructions for the one patent that the district court held was directed to an abstract idea were erroneous and not harmless because, by failing to identify the abstract idea, it permitted the jury to treat the abstract idea itself as supplying the inventive concept. The Court nonetheless affirmed the denial of judgment as a matter of law of ineligibility for that patent, finding sufficient evidence from which a reasonable jury could have found that the claimed dual-network architecture was not well-understood, routine, or conventional.

Ironburg Inventions Ltd. v. Valve Corp., No. 24-2088 (Fed. Cir. June 18, 2026): After Ironburg sued Valve for infringement of its patent directed to a video game controller, Valve petitioned for inter partes review (IPR) of Ironburg’s patent. A third-party, Collective Minds Gaming Co. (CMG), subsequently filed an IPR petition on two new grounds of obviousness. Valve then amended its invalidity contentions to include the two CMG grounds. The district court granted Ironburg’s motion for IPR estoppel, which Valve appealed. On the first appeal, the Federal Circuit held the district court improperly placed the burden of proof on Valve to show it could not have reasonably raised the CMG grounds in its petition. Instead, the burden of proof rests with Ironburg to prove that these were grounds Valve reasonably could have raised. On remand, the district court permitted additional limited discovery on this issue, after which Ironburg filed a renewed motion for IPR estoppel, which the district court granted.

The Federal Circuit (Hughes, J., joined by Chen and Stark, JJ.) reversed and remanded. Petitioners are estopped from asserting invalidity theories based on any grounds that a skilled searcher conducting a diligent search reasonably could have expected to discover prior to the filing of an IPR petition. The Court held that a classification search that “returns an unreviewable number of search results” is not enough for estoppel—rather, “something more is required.” Because the record included only the results of the classification search with no further narrowing, the Court found this evidentiary basis insufficient to support a finding of discoverability and reversed the judgment of the district court.

Judge Stark concurred, clarifying that in his view, estoppel under § 315(e)(2) requires both that the prior art reference were findable by a skilled searcher conducting a diligent search and that the skilled searcher would have been expected to discovery the invalidity ground at issue. Judge Stark noted that the Court’s opinion only focused on the first step of the analysis as Valve did not separately challenge whether the grounds for invalidity were reasonably discoverable.

Enanta Pharmaceuticals, Inc. v. Pfizer Inc., No. 25-1427 (Fed. Cir. June 23, 2026): Enanta’s patent is directed to compounds and methods of inhibiting coronavirus replication activity. The patent attempts to claim priority from a provisional application filed July 20, 2020. However, while the patent defines a substituent of C₁-C₁₂-alkyl, the provisional recites C₂-C₁₂-alkyl. The subscripted numbers identify the number of carbon atoms in the alkyl group: C₂-C₁₂ denotes alkyl groups containing two to twelve carbon atoms, while C₁-C₁₂ additionally includes a one-carbon alkyl. On April 6, 2021, Pfizer publicly disclosed a protease inhibitor (nirmatrelvir) used in its Paxlovid® product, which has a substituent of a C₁-alkyl group. On July 9, 2021, Enanta contends that it realized its provisional application contained a typographical error and that C₂-C₁₂-alkyl should have been C₁-C₁₂-alkyl. Accordingly, on July 19, 2021, Enanta’s non-provisional application listed the relevant substituent with the C₁-C₁₂-alkyl. Enanta sued Pfizer alleging Paxlovid® infringed its patent. Pfizer moved for summary judgment that Enanta’s patent was invalid as anticipated because Enanta could not claim priority to the provisional as it did not provide written description support for a C₁-alkyl. Enanta argued that the provisional contained an obvious typographical error and no new matter had been added. The district court granted Pfizer’s motion concluding that the change from C₂ to C₁ was not an obvious typographical error, and thus, the patent could not claim priority to the provisional application. Therefore, Pfizer’s disclosure of nirmatrelvir anticipated the asserted claims.

The Federal Circuit (Lourie, J., joined by Bryson and Chen, JJ.) affirmed. The Court distinguished this current case from its line of cases concerning the correction of errors in issued patents. The Court agreed with the district court that there was no obvious typographical error in the provisional. The Court then explained that in order to gain the benefit of the filing date of the provisional, the provisional must comply with the written description requirement. The Court concluded that the provisional does not convey to a skilled artisan that the inventors possessed the C₁-alkyl at the time of the provisional’s filing date, because the provisional’s disclosure of two to twelve carbon atoms (C₂-C₁₂) “notably does not include an alkyl group with one carbon atom” (C₁). Therefore, the provisional provided no written description support for the patent, and the patent could not be afforded the provisional’s priority date. The Court therefore affirmed the district court’s grant of summary judgment that the claims were anticipated by Pfizer’s disclosure of nirmatrelvir.

The following Gibson Dunn lawyers prepared this update: Blaine Evanson, Jaysen Chung, Audrey Yang, Julia Tabat, Michelle Zhu, and Elmira Adili.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Federal Circuit. Please contact the Gibson Dunn lawyer with whom you usually work, any leader or member of the firm’s Appellate and Constitutional Law or Intellectual Property practice groups, or the following authors:

Blaine H. Evanson – Orange County (+1 949.451.3805, bevanson@gibsondunn.com)
Audrey Yang – Dallas (+1 214.698.3215, ayang@gibsondunn.com)

Appellate and Constitutional Law:
Thomas H. Dupree Jr. – Washington, D.C. (+1 202.955.8547, tdupree@gibsondunn.com)
Allyson N. Ho – Dallas (+1 214.698.3233, aho@gibsondunn.com)
Julian W. Poon – Los Angeles (+ 213.229.7758, jpoon@gibsondunn.com)
Jeffrey B. Wall – Washington, D.C. (+1 202.955.8533,jwall@gibsondunn.com)

Intellectual Property:
Kate Dominguez – New York (+1 212.351.2338, kdominguez@gibsondunn.com)
Josh Krevitt – New York (+1 212.351.4000, jkrevitt@gibsondunn.com)
Jane M. Love, Ph.D. – New York (+1 212.351.3922, jlove@gibsondunn.com)

The first half of 2026 brought the second change of Enforcement leadership in under a year, the first comprehensive overhaul of the Enforcement Manual since 2017, and the first full-year enforcement statistics of the Atkins era — each reinforcing a consistent “quality over quantity,” back-to-basics enforcement philosophy.

Three developments defined the first half of 2026 at the SEC’s Division of Enforcement: a second change of Director in under a year, the first comprehensive overhaul of the Enforcement Manual since 2017, and the release of the first full-year enforcement statistics of Chairman Paul Atkins’ tenure. Each reinforced the same message — a “quality over quantity,” back-to-basics enforcement program focused on fraud and manipulation, with process discipline and cooperation incentives now formalized in writing. At the same time, the Commission continued to unwind legacy litigation, entered into a landmark memorandum of understanding with the CFTC, and stood up new task forces and working groups.

Despite lower headline numbers, Division leadership has signaled — and early indicators suggest — a coming uptick in core fraud enforcement, with accounting and disclosure fraud, private funds, cross-border misconduct, and retail-facing fraud at the top of the agenda. This update summarizes the leadership changes, statistics, process reforms, dismissals, and significant enforcement actions of the first half of 2026, and what they suggest for the remainder of the year.

Leadership Turnover and “Quality Over Quantity” in Practice

The Enforcement Director Turnover

Judge Margaret Ryan resigned as Director of the Division of Enforcement effective March 16, 2026, after roughly six months in the role.[1] The release announcing her departure credited her with overseeing a “critical course correction” in the enforcement program, away from approaches that prioritized volume over impact, together with a renewed focus on holding individual wrongdoers accountable.

On April 8, 2026, the Commission announced the appointment of David Woodcock as Director of the Division of Enforcement, effective May 4, 2026, with then Acting Director Waldon continuing to serve in the interim.[2] Director Woodcock returned to the agency after serving as Director of the Fort Worth Regional Office from 2011 to 2015 and as creator and chair of the Financial Reporting and Audit Task Force; he began his career as a Big Four auditor and most recently practiced as a partner and co-chair of the Securities Enforcement Practice Group at Gibson Dunn.

The Division’s national leadership continued to take shape around the new Director. In July, Osman Nawaz rejoined the Commission as a Deputy Director of the Division of Enforcement. Nawaz had previously spent more than 14 years in the Enforcement Division — including as Chief of the Complex Financial Instruments Unit — before departing in December 2024 to join Gibson Dunn as a partner in its Securities Enforcement and White Collar Defense and Investigations Practice Groups.[3] On July 22, the Commission announced that Deputy Director Nawaz will succeed Mr. Waldon as Principal Deputy Director following Mr. Waldon’s departure at the end of July.[4]

Turnover extended to the Commissioners as well: Commissioner Caroline Crenshaw departed in January 2026,[5] and Commissioner Hester Peirce will leave the SEC to join Regent University School of Law as an associate professor in November 2026.[6]

Continuity of Philosophy Across Three Leaders

Although the Division has had three leaders in twelve months, their public statements reflect a common through line that echoes the themes of Chairman Atkins’ Keynote Address at the 25th Annual A.A. Sommer, Jr. Lecture on Corporate, Securities, and Financial Law.[7]

Judge Ryan’s first public remarks, delivered to the Los Angeles County Bar Association in February 2026, targeted bad actors, “which Chairman Atkins refers to as the liars, cheats, and thieves.”[8] Then Acting Director Waldon carried that message forward at the 2026 SEC Speaks conference in March 2026, assuring attendees that the enforcement program remained “full steam ahead” and that the Division would pursue “quality over quantity.”[9] And Director Woodcock, in his May 2026 remarks at the MFA Legal & Compliance Conference, pledged a return to “back to basics” enforcement, with “hands-on leadership” and a “focus on the fundamentals.”[10]

Each of the three leaders has identified the same core priorities: offering and retail fraud, accounting and disclosure fraud, insider trading, market manipulation and wash trading, and breaches of fiduciary duty or misuse of client assets by investment advisers. At the same time, leadership has consistently signaled that non-fraud violations — reporting, books-and-records, internal-controls, and broker-dealer and adviser compliance failures — occupy a different tier. As Judge Ryan put it: “Are violations of these provisions on par with fraud? No, not necessarily.”[11] Then Acting Director Waldon struck the same balance at SEC Speaks: “If you make an honest mistake, and fix it, take steps to remediate, improve internal controls, and help harmed investors — those are not the cases we are looking at. If you don’t do that, that is a different story.”[12]

Early Indications of Increased Enforcement Activity

The Division has brought slightly fewer enforcement actions in the first half of 2026 compared to the first half of 2025, which is not unexpected given the Director turnover in 2026 and the SEC’s actions under former Chairman Gary Gensler in January 2025. The Commission announced 122 standalone and follow-on enforcement actions in the first half of 2026, compared to 146 in the first half of 2025. The intra-year trend, however, points upward: enforcement activity quickened as the half progressed, with more new actions announced in the second quarter than in the first and June filings up roughly 25% over May — including a near-tripling of new district-court actions and a cluster of administrative orders in the final week of the quarter.

Hiring tells a similar story. The Division has named three Deputy Directors this year, beginning with Paul H. Tzur and David M. Morrell in January[13] and followed by Deputy Director Nawaz in July. It has also posted multiple open positions, including postings for staff attorneys, accountants, and assistant directors, and the agency recently posted for an “Enforcement Liaison” in the Division of Trading and Markets.[14] Together with the new Retail Fraud Working Group and the Division’s stated priorities, discussed below, these indicators suggest that the pace of investigations and enforcement actions will accelerate in the second half of 2026.

The FY 2025 Enforcement Results — The First Full Statistical Picture of the Atkins Era

Chairman Atkins has long invoked a classic management adage — “you get what you measure.”[15] As he explained in the Sommer Address:

If we reward the staff only for bringing enforcement actions, then we have discouraged the staff from determining not to recommend an enforcement action. A basic tenet of management is, ‘You get what you measure.’ The wrong incentives make it more difficult for the staff to follow the evidence and the law wherever it leads and instead encourage the staff to stretch the boundaries of existing law.[16]

Our 2025 Year-End Update noted that official FY 2025 statistics had not yet been released and cited an estimate by The Brattle Group of 506 actions (a 13% decline from FY 2024). The official results, announced April 7, 2026, came in materially lower.[17] The release arrived months after the Commission’s usual November/December cadence — and, notably, one day before the announcement of Director Woodcock’s appointment.

The headline figures: 456 total enforcement actions — reported as the lowest total in roughly 20 years — comprising 303 standalone actions (down approximately 30% from FY 2024), 69 follow-on administrative proceedings, and 84 delinquent-filing actions. Monetary relief totaled approximately $17.9 billion, consisting of $10.8 billion in disgorgement and prejudgment interest and $7.2 billion in civil penalties. Excluding the monies ordered from the Stanford International Bank Ltd. action, totaling $14.9 billion, judgments and “deemed satisfied” offsets, FY 2025 produced approximately $1.4 billion in disgorgement and prejudgment interest and $1.3 billion in civil penalties — roughly a one-third year-over-year reduction — and approximately $262 million was returned to harmed investors, down about 24%.

By case mix, investment adviser/investment company, securities offering, delinquent-filing, and broker-dealer actions together accounted for roughly 75% of FY 2025 actions. Conspicuously absent relative to FY 2024 were off-channel communications,[18] whistleblower-rule, non-fraud crypto offering, and cybersecurity disclosure and controls cases. For the first time, the Commission disclosed the number of matters closed without enforcement action: 1,095 in FY 2025.

The Commission’s announcement of FY 2025 enforcement results was as much policy statement as scorecard. The announcement explicitly criticized the prior Commission’s “regulation by enforcement” and volume-driven metrics, while emphasizing individual accountability: approximately two-thirds of standalone actions named at least one individual, a 27% increase over FY 2024. Chairman Atkins stated that “the Commission has put a stop to regulation by enforcement and recentered its enforcement program on the Commission’s core mission.” Commissioner Mark Uyeda added: “I fully support the move away from using enforcement as a tool for policymaking, and the return to the Commission’s historical norms.”[19] Measured against the Chairman’s own yardstick, the FY 2025 results were less a retreat than a recalibration of what the Commission has chosen to measure.

Process and Policy Institutionalized

The Enforcement Manual Overhaul

On February 24, 2026, the Division announced the first comprehensive revision of its Enforcement Manual since 2017, together with a commitment to review the Manual annually going forward.[20] The updated Manual formalized changes across the life cycle of an investigation. It included a restructured Wells process, with Director-level approval for Wells notices, four-week submission windows, and prompt post-Wells meetings with senior leadership. It also restored the simultaneous consideration of settlement offers and related collateral-consequence waiver requests (well-known seasoned issuer status, and Regulation D and forward-looking-statement safe harbors). Finally, it adopted a framework, rooted in the Seaboard report,[21] for evaluating cooperation and remediation — including their effect on civil penalties and the express possibility of zero-penalty resolutions. Chairman Atkins called the overhaul “an important and long-overdue step.”[22]

Cooperation and Self-Reporting Messaging

Director Woodcock’s MFA remarks reinforced the cooperation framework in practical terms, urging counsel and firms to “engage early, engage seriously, and engage candidly” and placing the onus on firms to take advantage of pre-enforcement dialogue. To date, however, the Commission has stopped short of quantifying cooperation credit in the manner of DOJ or the CFTC,[23] and as FINRA has signaled it plans to do.[24] The Manual also institutionalized a structure for the approval of any cooperation agreements, deferred prosecution agreements, non-prosecution agreements, and immunity requests. Section 6.2.1 provides that the “cooperation program is overseen and administered by the Division’s Cooperation Committee,” which “ensures that decisions regarding cooperation are made in an appropriate and consistent manner,” and that “Staff should seek Cooperation Committee approval for all cooperation agreements.”[25]

“Material Matters” Podcast

On April 16, 2026, Chairman Atkins launched the “Material Matters” podcast, providing “exclusive interviews and insights around the agency’s policy and rulemaking agenda,” with guests including fellow Commissioners, division directors, legal and policy experts, authors, and corporate leaders.[26] The inaugural episode featured Commissioners Uyeda and Peirce discussing regulatory philosophy and interagency coordination.[27]

Podcast participants have reinforced the Commission’s current fraud-first mantra and emphasized enforcement’s outer boundary: no interpretive enforcement and no jurisdictional overlap with the CFTC.

Rescission of the “Gag Rule”

On May 18, 2026, the Commission rescinded its 1972 policy barring settling defendants from publicly denying the Commission’s allegations and stated that it will not enforce no-deny provisions in existing settlements.[28] Chairman Atkins explained: “Speech critical of the government is an important part of the American tradition. This rescission ends the policy prohibiting such criticism by settling defendants.”[29]

Structural Priorities: Task Forces and Working Groups

Cross-Border Task Force

The Cross-Border Task Force, formed on September 5, 2025, and reaffirmed by Director Woodcock, remains focused on foreign-based issuers, pump-and-dump and other market-manipulation schemes, and the gatekeepers — principally auditors and underwriters — that facilitate access to U.S. capital markets.[30]

Continuing the trend reported in our 2025 Year-End Update, trading suspensions have remained the Task Force’s most visible enforcement tool. Thus far this year, the Commission suspended trading in the securities of three offshore-incorporated, Asia-headquartered, U.S.-exchange-listed issuers — two based in Hong Kong and one in Singapore — citing suspected “ramp” manipulation of their securities promoted through social media.[31]

Retail Fraud Working Group

On July 7, 2026, the Commission formally announced the Retail Fraud Working Group[32] — a revival of the first-Trump-Administration group that Director Woodcock had previewed in his May remarks as one of his earliest priorities.[33] Its mandate covers offering frauds, microcap pump-and-dump schemes, market manipulation, unsuitable products, and breaches of duties to retail customers, with an emphasis on proactive case generation and coordination with state and foreign regulators. Chairman Atkins described the group as “a return to the core values and principles of the enforcement program,” and Director Woodcock said it “will bring focused energy and resources to that mission.”[34]

Office of the Whistleblower

Leadership of the Office of the Whistleblower has quietly turned over: long-time Chief Nicole Creola Kelly left the SEC early in 2025 amid the staff reductions, and Jonathan Carr, previously an Assistant Director in the Office, was most recently identified as Acting Chief[35]; no permanent successor has been announced.

The Commission has continued to grant awards in 2026, but announced them exclusively through redacted final orders posted to the Office’s Final Orders page.[36] It has not issued a press release announcing an award this year or at any point during Chairman Atkins’s tenure (other than on the day of Chairman Atkins’s swearing-in), a departure from the prior administration’s practice of publicizing significant awards. Thus far this year, the Commission has ordered 18 awards totaling at least $80 million, and 38 denials.

The awards issued in 2026 have quickly exceeded the value of those issued in all of 2025. In 2025, total awards fell to roughly $60 million[37] from $255 million in 2024.[38] Thus far this year, the SEC has issued one award exceeding $50 million[39] and another of approximately $20 million,[40] eclipsing the total amount awarded in all of FY 2025.

The Commission also pursued a whistleblower protection action: In May, the SEC settled an action against a national athletic footwear retailer, imposing a $148,000 civil penalty, for separation agreements that required departing employees to waive SEC whistleblower awards in violation of Rule 21F-17(a).[41] The settlement is a notable data point that contrasts with the Commission’s stated focus on “lying, cheating, or stealing,” as it represents a technical violation involving no fraud or direct investor harm. The order — a single action, resolved with cooperation and remediation credit and a comparatively modest penalty — contrasts with the sweep-style Rule 21F-17 enforcement of the prior administration.

Dismissals Continue

The Commission continued to unwind legacy litigation in the first half of 2026, extending the pattern of discretionary dismissals we described in our 2025 Year-End Update.

In early January, the Commission stipulated to the dismissal, with prejudice, of its remaining claims against the former chief financial officer of a global mining company[42] — a 2017 fraud action arising from the alleged inflated valuation of coal assets — ending more than eight years of litigation notwithstanding that the claims against the defendant had survived summary judgment in February 2025.[43]

In February, the Commission also stipulated to the voluntary dismissal of two other legacy district-court actions against individual defendants: a 2022 action pending in the Northern District of California,[44] and a 2023 action, also in the Northern District of California, against a former public-company chief financial officer.[45]

In March:

The Commission and the founder of a crypto social-media platform jointly stipulated to the dismissal of a 2024 fraud action against him, related individuals, and affiliated entities.[46]

In litigation against a blockchain entrepreneur, related foundations, and an affiliated entity, the Commission filed a proposed final judgment as part of a global resolution under which the affiliated entity will pay a $10 million civil penalty to resolve a wash-trading claim and all remaining claims against the entrepreneur and the related entities will be dismissed with prejudice; the original 2023 case had alleged unregistered offerings, wash trading involving more than 600,000 trades, and undisclosed celebrity-promoter payments.[47]

The Commission filed a joint stipulation dismissing, with prejudice, its action against a restaurant franchising company, its founder, and two other executives following the U.S. Department of Justice’s July 2025 dismissal of a parallel criminal case.[48]

Separately, the Commission resolved its beneficial-ownership reporting action against Elon Musk. The SEC had filed the action after Musk allegedly acquired more than five percent of Twitter, Inc.’s outstanding common stock without timely filing the required beneficial-ownership report, alleging that “Musk saved at least $150 million at the expense of Twitter shareholders by failing to timely file the beneficial ownership report.”[49] In May, the Elon Musk Revocable Trust was added as a defendant and consented to entry of a final judgment, subject to court approval, ordering payment of a civil penalty of $1.5 million.[50] A federal judge approved the settlement in July.

From Enforcement to Framework: Project Crypto and SEC–CFTC Harmonization

On March 11, 2026, the SEC and CFTC entered into a memorandum of understanding committing the agencies to “clarify, coordinate, and harmonize” their regulatory frameworks, including a “fit-for-purpose” framework for crypto assets, and simultaneously launched a Joint Harmonization Initiative spanning policymaking, examinations, and enforcement.[51]

Six days later, on March 17, 2026, the Commission issued — and the CFTC joined — an interpretive release addressing how the federal securities laws apply to certain crypto assets and transactions, establishing a five-category taxonomy: digital commodities, digital collectibles, digital tools, stablecoins, and digital securities.[52] CFTC Chairman Selig endorsed the release, saying that the “joint agency action reflects a shared commitment to developing workable, harmonized regulations for the new frontier of finance.”[53]

While working to establish a workable regulatory framework for crypto, and notwithstanding the dismissal of registration-based crypto cases, the Commission continues to bring crypto-adjacent fraud and misappropriation actions — a distinction market participants should not overlook. Two actions brought in 2026 illustrate the point.

In April, the Commission filed an action against an individual and two entities he controlled that accused the defendants of “allegedly defrauding hundreds of investors across the United States in a $16 million securities offering of ‘Simple Agreements for Future Tokens’ that purported to give investors the right to receive a crypto asset . . . at a future point.”[54] According to the complaint, the individual made false claims that the token was “the world’s first insured digital asset” with “up to $1 billion coverage” even though no such insurance ever existed; that the token was asset-backed and that an “existing trust” secured its value, but no such trust was ever created; and “80% or more” of offering proceeds would support the token’s underlying value, while in reality he used investor funds for his personal benefit.

In May, the Commission filed an action against a Texas resident in a crypto asset trading scheme in which he “allegedly raised approximately $12.3 million from about 150 investors based on various misrepresentations and omissions, including that he would use proprietary AI-based trading bots to engage in high-frequency arbitrage trading in crypto assets.”[55] The complaint alleges that the defendant falsely promised some investors returns in excess of 40–50% within 30 to 45 days and guaranteed profits exceeding 100% in as little as 21 days; falsely claimed investor funds were secured by a surety bond, insured by the FDIC, and protected by a professional-liability policy; misappropriated at least $6.2 million for personal expenses; used approximately $5.5 million to make Ponzi-like payments; and lulled investors with fake account statements and fabricated correspondence from phony entities.

Back-to-Basics Enforcement by Category

Offering Fraud and Large-Scale Retail Fraud

Offering fraud is the Division’s most clearly stated priority, and the FY 2025 data bears it out: offering-fraud actions roughly doubled under Chairman Atkins. The Commission has continued to pursue such cases in 2026.

In March, the Commission filed a settled action alleging that a college-student fund manager raised approximately $7.8 million through two funds he managed and misappropriated nearly $7 million of investor assets.[56]

In April, the Commission filed an action in the Northern District of California against an individual who allegedly raised approximately $43 million from more than 400 investors, largely members of the Indian American community solicited through Telegram chatrooms, for a purported pooled trading operation promising annual returns of 20–40%.[57] The complaint alleges Ponzi-like payments of roughly $18 million and fabricated account statements.

Public Company Accounting, Financial Reporting, and Disclosure

Accounting, financial reporting, and disclosure enforcement is Director Woodcock’s signature area. He chaired the Division’s Financial Reporting and Audit Task Force when he was last at the Commission, began his career as an auditor with a national accounting firm, and spoke on the importance of “good corporate accounting and disclosures.”[58] In the Director’s words, the Enforcement Division is “prioritizing financial reporting matters that are important to ensure good corporate accounting and disclosures.”[59] This priority aligns with Chairman Atkins’ insistence that the Commission “must operate within its mandate as a disclosure agency.”[60] Policing the accuracy of what public companies tell the markets is disclosure regulation at its core, and issuers should expect these cases to remain at the center of the Division’s docket in the second half of 2026.

Against this backdrop, it is little surprise that, in his remarks at the MFA Legal & Compliance 2026 Conference, Director Woodcock pointed to the Division’s early-2026 docket as proof of concept: in his telling, the first half of the year already supplies a template for how the Division intends to approach financial-reporting cases. Two matters from the first half of this year that Director Woodcock noted in his remarks illustrate the point.

First, the Commission brought actions against “a large agricultural processing and commodities trading company and three former executives for allegedly inflating the performance of a key business segment touted as an important growth driver.”[61] The company paid a $40 million civil penalty and settled together with two of the former executives, who agreed to disgorgement and civil penalties totaling approximately $525,000 and $650,000 respectively.[62] Another of the company’s former executives is litigating the Commission’s enforcement action.

Second, the Commission “settled with a manufacturing company that [the Commission] alleged violated the internal accounting controls and books and records provisions related to false entries in [the Company’s] inventory system and adjustments it made after reversing the improper income from those entries. In addition, [the Commission] settled with two of the company’s executives for allegedly causing the violations.”[63]

Investment Advisers and Private Funds

Director Woodcock also identified private funds as a focus area during his MFA remarks. He noted recurring risk areas, such as valuations, fees and expenses, liquidity and suitability, and conflicts of interest, and stressed that the Division is watching for such issues “not only at the private fund adviser level but throughout the distribution chain,” including whether firms’ representatives understand the products they sell and the risk tolerance and liquidity needs of the clients who buy them.[64] He also singled out private credit, an asset class with “stresses in some portfolios” that the Commission is actively monitoring.[65] And he promised that “the Enforcement Division will remain active” in its oversight of investment advisers more broadly, listing misappropriated client assets, misleading strategy disclosures, undisclosed fees and expenses, fraudulent valuations and mismarking, and undisclosed conflicts of interest as continuing staples of the Division’s docket.[66]

In February, the Commission settled claims against a formerly registered investment adviser and private fund manager for allegedly selling loans without reasonably determining whether the trades were made at fair market value, in violation of its obligations under its advisory agreements and contrary to its representations to investors.[67] The adviser agreed to settle to negligence-based violations of the Advisers Act and pay a $900,000 penalty. The adviser also voluntarily reimbursed the funds more than $5 million plus interest. For more information, please refer to Gibson Dunn’s client alert.

In April, the Commission instituted a settled order against three affiliated Florida advisory firms and their owner for fraud and other violations arising from misrepresentations to venture-fund investors, including fabricated institutional co-investments and overstated performance, imposing approximately $1.75 million in disgorgement and a $600,000 civil penalty and a bar against the individual from association with an investment adviser.[68]

Notably, the Division of Examinations’ 2026 priorities emphasize alternative investments, private credit, and extended lock-up structures[69] — the same areas Enforcement leadership has flagged as areas of interest. As historical experience demonstrates, the Commission’s Examination program can often be a source of referrals to the Enforcement Division for investigation.

Insider Trading

Insider trading remains a core priority of the Enforcement Division — and the first half of the year produced both a headline-grabbing ring and a steady stream of individual actions, large and small. At the same time, a heightened, and novel, risk of insider trading enforcement has arisen from a state attorney general.

Most prominent among the Commission’s insider trading actions thus far this year, in May, the Commission charged 21 individuals in what it described as a wide-reaching insider trading scheme.[70] The scheme was allegedly orchestrated by a Los Angeles mergers-and-acquisitions attorney who, together with a business partner, misappropriated material nonpublic information from the attorney’s law firm’s clients concerning more than a dozen pending corporate transactions between 2018 and 2024, recruited a second corporate lawyer as the scheme expanded, and passed tips through friends and family. The action was filed in the District of Massachusetts, where the U.S. Attorney’s Office brought parallel criminal charges.

In other notable actions, in March, the Commission filed a settled enforcement action against the former president and chief operating officer of a publicly traded pet-health company alleging he traded ahead of the company’s acquisition by a private equity firm using brokerage accounts belonging to his ex-wife. The Commission also charged a friend whom the executive allegedly tipped and who purchased call options.[71] Their combined illicit profits exceeded $200,000. The executive pled guilty in a parallel criminal proceeding and is awaiting sentencing. The friend was criminally charged.

Also in March, the Commission filed a settled action against the former chief revenue officer of a publicly traded company alleging he traded ahead of two quarterly earnings calls, thereby avoiding losses and generating illicit gains totaling more than $2.5 million, and for failing to file required reports of his trading.[72] The individual consented to injunctions and a permanent officer and director bar, and pled guilty in a parallel criminal case brought by the United States Attorney’s Office for the Southern District of New York in January.

The Commission continued to bring small-dollar insider trading cases: an action filed in January in the District of Massachusetts against an individual who allegedly avoided losses of less than $20,000;[73] an action filed in April against an individual with alleged ill-gotten gains of approximately $54,000;[74] and a settled administrative proceeding against an individual with alleged ill-gotten gains of approximately $41,000.[75] These cases signal that there is no de minimis floor for insider-trading enforcement.

Earlier this year, in SEC v. Panuwat, the Ninth Circuit Court of Appeals heard oral argument on the defendant’s appeal of his adverse trial court judgment. The Commission continued to defend its position in this first-of-its-kind “shadow trading” case.

Finally, in a client alert earlier this year, we discussed a novel insider trading action brought by the New York Attorney General (NYAG). In January, the NYAG brought a Martin Act insider-trading action against the former chief executive officer of Emergent BioSolutions, alleging that he adopted a Rule 10b5-1 trading plan while aware of material nonpublic information about manufacturing-contamination problems and then sold roughly $10.1 million in stock before those problems became public; the company simultaneously settled through an assurance of discontinuance with a $900,000 penalty, while the litigated case against the former executive remains pending.[76] The case is extraordinary in multiple respects, not least of which being that it is rare for state attorneys general to bring insider trading cases, which are the traditional purview of the U.S. Department of Justice and the Commission. It is particularly surprising that the NYAG did so here, where the alleged insider trading involves a Rule 10b5-1 plan and the company had entered into a negligence-based settlement with the SEC for alleged disclosure violations relating to the manufacturing issues.[77]

Market Manipulation and Wash Trading

In June, a federal jury in the Central District of California convicted the founder of a prominent short-selling research firm on 13 of 17 counts of securities fraud arising from his alleged “scalping” scheme, which consisted of publicly recommending positions he intended to, and did, quickly reverse for profit, with sentencing scheduled for August 31, 2026.[78] The SEC’s parallel civil action, filed in 2024, remains pending.[79]

Also in June, the Commission filed a settled action against an individual, a California-based day trader, alleging a years-long spoofing scheme involving more than 150 thinly traded American Depositary Receipts that generated more than $1.3 million in ill-gotten gains.[80] According to the complaint, the scheme ran from October 2021 through at least November 2024 and followed three steps: the trader placed buy and sell orders he never intended to execute to move the price of a targeted security, executed genuine trades at the manipulated prices through accounts at a different brokerage firm, and then canceled the non-bona fide orders — conduct he admitted to investigators was designed “to walk the price up [to] my advantage.” The defendant consented to a judgment that includes restrictions from opening or trading in brokerage accounts without first providing the broker-dealer a copy of the complaint and judgment for five years, and reserves disgorgement and civil penalties for court determination. The Department of Justice filed parallel criminal charges.

Gatekeepers — Auditors and Accountants

In April, the Commission instituted a settled order against an outside audit engagement partner responsible for the audits of a crypto asset trading platform, finding that the audits departed from generally accepted auditing standards because the partner lacked a sufficient understanding of the platform and its relationship with an affiliated trading firm, and denying him the privilege of appearing or practicing before the Commission as an accountant, with a right to seek reinstatement after two years.[81]

The Commission also resolved a settled administrative proceeding against a national accounting firm.[82] The order alleged that, in auditing the 2020 financial statements of a mutual fund client whose investment adviser was later found to have orchestrated a large-scale overvaluation scheme, the firm failed to obtain a sufficient understanding of the internal controls around the valuation process, failed to obtain sufficient appropriate evidence in its valuation testing, and did not exercise due professional care and professional skepticism. The firm consented to a censure, a cease-and-desist order, and an undertaking to certify its remedial efforts in writing within 60 days. Notably, the Commission imposed no civil penalty, expressly on the basis of the firm’s prompt remediation, which includes new national-office consultation requirements for model-based fair-value measurements and annual risk-profiling of fund clients, but reserved the right to seek to reopen the matter and pursue a penalty if the firm was found to have knowingly provided materially false or misleading information.

Looking ahead, the Division has created a new enforcement team to investigate and litigate violations by audit professionals of Sarbanes-Oxley auditing standards. In response to media inquiries, an SEC spokesperson said the initiative would “continue the Commission’s longstanding efforts to crack down on bad actors in the profession,” describing auditors as “critical gatekeepers.”[83]

Broker-Dealers

In remarks at SEC Speaks, senior Enforcement leaders discussed the Division’s focus on broker-dealers, as well as investigation of potential misappropriation, churning, cherry-picking, and unauthorized trading.[84] Two actions illustrate the Division’s focus.

In April, the Commission filed an action against a former registered representative and investment adviser representative alleging misappropriation of client securities.[85] According to the complaint, between September 2017 and February 2024 the representative misappropriated more than $800,000 worth of securities from twelve of his advisory and brokerage clients through a sham investment program of his own creation. He allegedly told clients he had created a program to purchase discounted securities through a third-party transfer agent and sell them at a profit, when in reality he used the clients’ funds to purchase the securities at no discount and used falsified documents and signatures to divert some of them to his personal brokerage account.

In May, the Commission instituted a settled order against a New York-based retail broker-dealer for violations of Regulation Best Interest’s Care and Compliance Obligations arising from more than 253 mutual-fund “switch” recommendations between June 2020 and September 2024 that generated approximately $230,088 in new upfront Class A sales charges without adequate consideration of cost. The firm consented to a censure, disgorgement of $141,600 and a $60,000 civil penalty.[86]

[1] SEC Press Release, SEC Announces Enforcement Division Director Judge Margaret A. Ryan Has Resigned From Agency (Mar. 16, 2026), available at https://www.sec.gov/newsroom/press-releases/2026-27-sec-announces-enforcement-division-director-judge-margaret-ryan-has-resigned-agency.

[2] SEC Press Release, SEC Appoints David Woodcock as Director of the Division of Enforcement (Apr. 8, 2026), available at https://www.sec.gov/newsroom/press-releases/2026-35-sec-appoints-david-woodcock-director-division-enforcement.

[3] David Woodcock, LinkedIn post announcing Osman Nawaz as Deputy Director of the Division of Enforcement (July 5, 2026), available at https://www.linkedin.com/posts/dwoodcock_sec-enforcement-publicservice-activity-7479668520687960064-ZEkq/.

[4] SEC Press Release, SEC Announces Departure of Principal Deputy Director of Enforcement Sam Waldon (July 22, 2026), available at https://www.sec.gov/newsroom/press-releases/2026-68-sec-announces-departure-principal-deputy-director-enforcement-sam-waldon.

[5] Paul S. Atkins, Chairman, U.S. Securities and Exchange Commission, et al., Statement on Departure of Commissioner Caroline Crenshaw (Jan. 2, 2026), available at https://www.sec.gov/newsroom/speeches-statements/statement-departure-commissioner-crenshaw-010226.

[6] Regent University, Regent Law Welcomes Gregory F. Jacob and Hester M. Peirce to Faculty (May 19, 2026), available at https://www.regent.edu/news/regent-law-welcomes-gregory-f-jacob-and-hester-m-peirce-to-faculty/.

[7] Paul S. Atkins, Chairman, U.S. Securities and Exchange Commission, Keynote Address at the 25th Annual A.A. Sommer, Jr. Lecture on Corporate, Securities, and Financial Law (Oct. 7, 2025), available at https://www.sec.gov/newsroom/speeches-statements/atkins-100925-keynote-address-25th-annual-aa-sommer-jr-lecture-corporate-securities-financial-law. (Sommer Address)

[8] Margaret A. Ryan, Director, Division of Enforcement, U.S. Securities and Exchange Commission, Remarks to the Los Angeles County Bar Association (Feb. 11, 2026), available at https://www.sec.gov/newsroom/speeches-statements/margaret-ryan-02-11-26-remarks-los-angeles-county-bar-association.

[9] See SEC Enforcement Speaks in 2026, JD Supra (Mar. 2026), available at https://www.jdsupra.com/legalnews/sec-enforcement-speaks-in-2026-7974774/ (summarizing remarks at PLI’s SEC Speaks in 2026 conference).

[10] David Woodcock, Director, Division of Enforcement, U.S. Securities and Exchange Commission, Remarks at the MFA Legal & Compliance 2026 Conference (May 13, 2026), available at https://www.sec.gov/newsroom/speeches-statements/woodcock-remarks-mfa-legal-compliance-2026-conference-051326. (MFA Remarks)

[11] Margaret A. Ryan, Director, Division of Enforcement, Remarks to the Los Angeles County Bar Association (Feb. 11, 2026), available at https://www.sec.gov/newsroom/speeches-statements/margaret-ryan-02-11-26-remarks-los-angeles-county-bar-association.

[12] See SEC Enforcement Speaks in 2026, JD Supra (Mar. 2026), available at https://www.jdsupra.com/legalnews/sec-enforcement-speaks-in-2026-7974774/ (summarizing remarks at PLI’s SEC Speaks in 2026 conference, held March 19–20, 2026; the Commission has not published the remarks).

[13] SEC Press Release, Paul Tzur and David Morrell Named Deputy Directors of the Division of Enforcement (Jan. 12, 2026), available at https://www.sec.gov/newsroom/press-releases/2026-4-paul-tzur-david-morrell-named-deputy-directors-division-enforcement.

[14] USAJOBS, Enforcement Liaison, Division of Trading and Markets, available at https://www.usajobs.gov/GetJob/ViewDetails/876787800.

[15] Sommer Address.

[16] Sommer Address.

[17] SEC Press Release, SEC Announces Enforcement Results for Fiscal Year 2025 (Apr. 7, 2026), available at https://www.sec.gov/newsroom/press-releases/2026-34. (2025 Enforcement Results)

[18] But cf. SEC, Agency Rule List – 2026, Office of Info. and Regul. Affs., Office of Mgmt. and Budget, Exec. Office of the President, https://www.reginfo.gov/public/do/eAgendaMain (last visited July 29, 2026) (indicating planned revisions to broker-dealer and registered investment adviser recordkeeping rules and the meaning of “business as such”).

[19] 2025 Enforcement Results.

[20] SEC Press Release, SEC’s Division of Enforcement Announces Updates to Enforcement Manual (Feb. 24, 2026), available at https://www.sec.gov/newsroom/press-releases/2026-20-secs-division-enforcement-announces-updates-enforcement-manual.

[21] SEC, Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934 and Commission Statement on the Relationship of Cooperation to Agency Enforcement Decisions, Exchange Act Release No. 34-44969 (Oct. 23, 2001), available at https://www.sec.gov/litigation/investreport/34-44969.htm#P54_10936.

[22] SEC Press Release, SEC’s Division of Enforcement Announces Updates to Enforcement Manual (Feb. 24, 2026), available at https://www.sec.gov/newsroom/press-releases/2026-20-secs-division-enforcement-announces-updates-enforcement-manual.

[23] MFA Remarks.

[24] A Message from FINRA’s President and CEO Regarding the External Review of FINRA’s Enforcement Program, 21 (June 30, 2026), available at https://www.finra.org/sites/default/files/2026-06/Recommendatons-Based-on-Review-of-FINRA-Enforcement-Program.pdf.

[25] SEC, Division of Enforcement, Enforcement Manual at § 6.2.1 (Feb. 24, 2026), available at https://www.sec.gov/divisions/enforce/enforcementmanual.pdf.

[26] SEC Press Release, Chairman Atkins Launches “Material Matters” Podcast (Apr. 16, 2026), available at https://www.sec.gov/newsroom/press-releases/2026-39-chairman-atkins-launches-material-matters-podcast.

[27] Material Matters with SEC Chairman Paul Atkins, Commissioners Set the Course: 2026 Priorities, SEC (Apr. 16, 2026), available at https://www.sec.gov/newsroom/podcasts/material-matters-sec-chairman-paul-atkins/commissioners-set-course-2026-priorities.

[28] SEC Press Release, SEC Rescinds Policy Regarding Denials of Settlements in Enforcement Actions (May 18, 2026), available at https://www.sec.gov/newsroom/press-releases/2026-45-sec-rescinds-policy-regarding-denials-settlements-enforcement-actions.

[29] Id.

[30] SEC Press Release, SEC Announces Formation of Cross-Border Task Force to Combat Fraud (Sept. 5, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-113-sec-announces-formation-cross-border-task-force-combat-fraud.

[31] JM Group Limited, Order of Suspension of Trading, Exchange Act Release No. 34-104613 (Jan. 14, 2026), available at https://www.sec.gov/files/litigation/suspensions/2026/34-104613.pdf; TechCreate Group Ltd., Order of Suspension of Trading, Exchange Act Release No. 34-104763 (Feb. 1, 2026), available at https://www.sec.gov/files/litigation/suspensions/2026/34-104763.pdf; Happy City Holdings Limited, Order of Suspension of Trading, Exchange Act Release No. 34-105675 (June 11, 2026), available at https://www.sec.gov/files/litigation/suspensions/2026/34-105675.pdf.

[32] SEC Press Release, SEC Forms New Retail Fraud Working Group (July 7, 2026), available at https://www.sec.gov/newsroom/press-releases/2026-63-sec-forms-new-retail-fraud-working-group.

[33] MFA Remarks.

[34] SEC Press Release, SEC Forms New Retail Fraud Working Group (July 7, 2026), available at https://www.sec.gov/newsroom/press-releases/2026-63-sec-forms-new-retail-fraud-working-group.

[35] SEC Press Release, SEC Awards $6 Million to Joint Whistleblowers (Apr. 21, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-67-sec-awards-6-million-joint-whistleblowers.

[36] SEC, Office of the Whistleblower, Final Orders and Award Determinations, available at https://www.sec.gov/enforcement-litigation/whistleblower-program/final-orders-whistleblower-award-determinations.

[37] SEC, Annual Report to Congress on the Whistleblower Program, Fiscal Year 2025, available at https://www.sec.gov/files/fy25-annual-whistleblower-report.pdf.

[38] SEC, Annual Report to Congress on the Whistleblower Program, Fiscal Year 2024, available at https://www.sec.gov/files/fy24-annual-whistleblower-report.pdf.

[39] SEC, Order Determining Whistleblower Award Claims (Apr. 7, 2026), available at https://www.sec.gov/files/final-order-04072026.pdf.

[40] SEC, Order Determining Whistleblower Award Claims (June 25, 2026), available at https://www.sec.gov/files/fo-2026-26.pdf.

[41] SEC Administrative Proceeding Summary, SEC Institutes Settled Order as to Foot Locker for Violating Whistleblower Protection Rule (May 22, 2026), available at https://www.sec.gov/enforcement-litigation/administrative-proceedings/34-105542-s.

[42] SEC Litigation Release, SEC Announces Dismissal of Civil Enforcement Action Against Former Rio Tinto Executive Guy Elliott, Litigation Release No. 26459 (Jan. 9, 2026), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26459.

[43] SEC v. Elliott, No. 17-cv-7994-AT, 2025 U.S. Dist. LEXIS 30554 (S.D.N.Y. Feb. 20, 2025).

[44] SEC Litigation Release, SEC Dismisses Civil Enforcement Action Against Former Infrastructure Company Executive, Litigation Release No. 26471 (Jan. 29, 2026), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26471.

[45] SEC Litigation Release, SEC Dismisses Civil Enforcement Action Against Former Chief Financial Officer (Feb. 27, 2026), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26495.

[46] SEC Litigation Release, SEC Announces Dismissal of Civil Enforcement Action Against Nader Al-Naji and Relief Defendants (Mar. 12, 2026), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26499.

[47] SEC Litigation Release, SEC Files Proposed Settlement with Respect to Wash Trading Claims Against Rainberry, Inc.; Dismisses All Remaining Claims (Mar. 5, 2026), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26496.

[48] SEC Litigation Release, SEC Announces Dismissal of Civil Enforcement Action Against FAT Brands, Inc. and Its Executives (Mar. 27, 2026), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26510.

[49] SEC Litigation Release, SEC Charges Elon Musk for Violating the Beneficial Ownership Reporting Requirements of the Federal Securities Laws (Jan. 2025), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26219.

[50] SEC Litigation Release, SEC Amends Complaint and Files Proposed Final Judgment Against Trust for Violating the Beneficial Ownership Reporting Requirements of the Federal Securities Laws (May 4, 2026), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26548.

[51] SEC Press Release, SEC and CFTC Announce Historic Memorandum of Understanding Between Agencies (Mar. 11, 2026), available at https://www.sec.gov/newsroom/press-releases/2026-26-sec-cftc-announce-historic-memorandum-understanding-between-agencies.

[52] SEC Press Release, SEC Clarifies the Application of Federal Securities Laws to Crypto Assets (Mar. 17, 2026), available at https://www.sec.gov/newsroom/press-releases/2026-30-sec-clarifies-application-federal-securities-laws-crypto-assets.

[53] Id.

[54] SEC Litigation Release, SEC Charges Bitcoin Latinum Founder and Affiliated Companies with Allegedly Defrauding Investors in $16 Million Securities Offering (Apr. 17, 2026), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26530.

[55] SEC Litigation Release, SEC Charges Texas Resident in Alleged Multi-Million Dollar Crypto Asset Fraud Scheme (May 29, 2026), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26558.

[56] SEC Litigation Release, SEC Files Settled Action as to Oklahoma Resident for Allegedly Defrauding Investors in Two Offerings (Mar. 27, 2026), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26507.

[57] SEC Litigation Release, SEC Charges San Francisco Bay Area Trader and Investment Adviser in Alleged Multimillion Dollar Ponzi-Like Scheme and Offering Fraud (Apr. 17, 2026), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26529.

[58] MFA Remarks.

[59] Id.

[60] Paul Atkins, Chairman, U.S. Securities and Exchange Commission, Remarks at the Stanford Rock Center for Corporate Governance (May 26, 2026), available at https://www.sec.gov/newsroom/speeches-statements/atkins-052626-remarks-stanford-rock-center-corporate-governance.

[61] Id.

[62] SEC Press Release, SEC Charges ADM and Three Former Executives with Accounting and Disclosure Fraud (Jan. 27, 2026), available at https://www.sec.gov/newsroom/press-releases/2026-15-sec-charges-adm-three-former-executives-accounting-disclosure-fraud.

[63] MFA Remarks.

[64] Id.

[65] Id.

[66] Id.

[67] SEC Administrative Proceeding Summary, SEC Charges Illinois Investment Adviser for Breaching Its Fiduciary Duty and Contravening Its Disclosures (Feb. 25, 2026), available at https://www.sec.gov/enforcement-litigation/administrative-proceedings/ia-6948-s.

[68] SEC Administrative Proceeding Summary, SEC Institutes Settled Order as to Florida Investment Advisory Firms and Owner for Fraud and Other Violations (Apr. 8, 2026), available at https://www.sec.gov/enforcement-litigation/administrative-proceedings/33-11413-s.

[69] SEC, Division of Examinations, Fiscal Year 2026 Examination Priorities, available at https://www.sec.gov/files/2026-exam-priorities.pdf.

[70] SEC Press Release, SEC Charges 21 Individuals with Alleged Wide-Reaching Insider Trading Scheme (May 6, 2026), available at https://www.sec.gov/newsroom/press-releases/2026-44-sec-charges-21-individuals-alleged-wide-reaching-insider-trading-scheme.

[71] SEC Litigation Release, SEC Charges Former Executive and his Friend with Insider Trading (Apr. 1, 2026), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26518.

[72] SEC Litigation Release, SEC Files Settled Action as to Former Chief Revenue Officer Charged with Insider Trading (Mar. 17, 2026), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26501.

[73] SEC Litigation Release, SEC Files Settled Action as to Massachusetts Resident for Alleged Insider Trading in Massachusetts-Based Biopharmaceutical Company (Jan. 26, 2026), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26466.

[74] SEC Litigation Release, SEC Files Settled Insider Trading Action Against Texas CPA and Former Internal Audit Head of Public Company (Apr. 29, 2026), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26542.

[75] Verma, Exchange Act Release No. 104,651 (Jan. 21, 2026), available at https://www.sec.gov/files/litigation/admin/2026/34-104651.pdf.

[76] Press Release, Office of the New York State Att’y Gen., Attorney General James Sues Former CEO of Emergent BioSolutions for Insider Trading (Jan. 15, 2026), available at https://ag.ny.gov/press-release/2026/attorney-general-james-sues-former-ceo-emergent-biosolutions-insider-trading.

[77] See Emergent BioSolutions, Inc., Securities Act Release No. 11371 (Apr. 7, 2025), available at https://www.sec.gov/files/litigation/admin/2025/33-11371.pdf.

[78] U.S. Attorney’s Office, Central District of California, Press Release, Founder of Citron Research Found Guilty of Scheming to Manipulate Stock Market with Media Campaigns (June 1, 2026), available at https://www.justice.gov/usao-cdca/pr/founder-citron-research-found-guilty-scheming-manipulate-stock-market-media-campaigns.

[79] SEC Press Release, SEC Charges Andrew Left and Citron Capital for $20 Million Fraud Scheme (July 26, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-89.

[80] SEC Litigation Release, SEC Files Settled Action as to California Day Trader in Alleged Manipulative Spoofing Scheme (June 25, 2026), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26574.

[81] SEC Administrative Proceeding Summary, SEC Institutes Settled Order as to Audit Engagement Partner for Failures Related to Audit of FTX (Apr. 8, 2026), available at https://www.sec.gov/enforcement-litigation/administrative-proceedings/34-105184-s.

[82] SEC Administrative Proceeding Summary, SEC Institutes Settled Order as to Auditor for Failures Related to Audit of Infinity Q’s Mutual Fund (Mar. 6, 2026), available at https://www.sec.gov/enforcement-litigation/administrative-proceedings/34-104936-s.

[83] Douglas Gillison & Chris Prentice, US SEC Forming New Team to Police Accounting Issues, Reuters (Mar. 19, 2026), available at https://www.reuters.com/legal/government/us-sec-forming-new-team-police-accounting-issues-2026-03-19/.

[84] See SEC Enforcement Speaks in 2026, JD Supra (Mar. 2026), available at https://www.jdsupra.com/legalnews/sec-enforcement-speaks-in-2026-7974774/ (summarizing remarks at PLI’s SEC Speaks in 2026 conference).

[85] SEC Litigation Release, SEC Charges Former Investment Adviser for Allegedly Misappropriating Securities From His Clients (Apr. 6, 2026), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26521.

[86] SEC Administrative Proceeding Summary, SEC Institutes Settled Order as to New York-Based Broker-Dealer for Regulation Best Interest Violations (May 27, 2026), available at https://www.sec.gov/enforcement-litigation/administrative-proceedings/34-105556-s.

The following Gibson Dunn lawyers prepared this update: Mark Schonfeld, Jina Choi, Tina Samanta, Lauren Jackson, and Hayden McGovern.

Gibson Dunn lawyers are available to assist in addressing any questions you may have about these developments. Please contact the Gibson Dunn lawyer with whom you usually work, any leader or member of the firm’s Securities Enforcement practice group, or the authors:

Mark K. Schonfeld – New York (+1 212.351.2433, mschonfeld@gibsondunn.com)

Jina L. Choi – San Francisco (+1 415.393.8221, jchoi@gibsondunn.com)

Tina Samanta – New York (+1 212.351.2469, tsamanta@gibsondunn.com)

Lauren Cook Jackson – Washington, D.C. (+1 202.955.8293, ljackson@gibsondunn.com)

Hayden K. McGovern – Dallas (+1 202.887.3569, hmcgovern@gibsondunn.com)