A few years ago, we blogged about a federal jury verdict against Chiquita Brands holding the company liable for financing a Colombian paramilitary group. That blog noted that there are three specific statutes that can provide a basis for imposing liability for companies doing business in troubled parts of the world. The statutes are the Anti-Terrorism Act (ATA), the Alien Tort Statute (ATS) and the Torture Victim Protection Act (TVPA).
This Freshfields blog notes that the SCOTUS recently granted cert in the case of Cisco Systems, Inc. v. Doe I, in order to determine whether two of these statutes, the ATS and the TVPA, allow suits against individuals and entities for aiding and abetting violations of international law. The lawsuit is premised on allegations that Cisco built a nationwide surveillance system that allowed the Chinese government to identify and arrest members of the Falun Gong religious group, and that in doing so, the company aided & abetted violations of these statutes. This excerpt discusses the two statutes and provides an overview of how courts have approached them in recent years:
The lawsuit is based on two separate but related federal statutes. The ATS, enacted in 1789, allows federal courts to hear lawsuits brought by non-US citizens for actions that violate the “law of nations” (customary international law). The TVPA, passed in 1992, creates liability for torture and extrajudicial killings committed by a foreign nation. Unlike the ATS, the TVPA applies only to conduct committed by individual defendants, not corporations.
In recent years, the Supreme Court has significantly narrowed the scope of the ATS. In Sosa v. Alvarez-Machain (2004), the Court concluded that only certain conduct could give rise to liability under the ATS. In addition, the Court held in Kiobel v. Royal Dutch Petroleum (2013) that a plaintiff cannot sue under the ATS when the alleged conduct occurs entirely outside the United States. Relatedly, in Nestlé USA, Inc. v. Doe (2021), the Court determined that corporate decisionmaking is not enough to hold a company liable.
In July 2023, the Ninth Circuit allowed the claims against Cisco to continue. It held that aiding and abetting is actionable under the ATS, and that Cisco’s development of the surveillance system went beyond mere decisionmaking. The Ninth Circuit also held that the TVPA’s text and history permit aiding and abetting claims against Cisco’s executives.
The blog says that the stakes in the case are high – a favorable ruling for the plaintiffs would “create a pathway for holding US corporations and individuals responsible for facilitating human rights abuses,” while a decision in favor of Cisco could effectively shield corporations from liability absent federal legislation.
Deloitte’s Center for Board Effectiveness recently issued its report on board governance in 2026. The report addresses the topics that are likely to be on the agenda for boards during the upcoming year and suggests strategies that help position boards to better address the challenges they face. Board topics identified by Deloitte include economic and geopolitical volatility, AI and emerging tech governance, cybersecurity, and human capital management – particularly CEO succession. Here’s an excerpt from the report’s discussion of that topic:
According to the 2025 Spencer Stuart Board Index, CEO turnover at S&P 500 companies rose nearly 30% from 2024, to 61 new appointments in 2025 from 47 the year before.2 The report indicates many of these appointments involved internal promotions and first-time leaders. It also indicates a slight decrease in average tenure for departing leaders, with approximately one-third serving in their roles for less than five years.
A Russell Reynolds report indicates a trend toward elevated levels of CEO turnover and shortening tenures globally as well. Taken together, these data points indicate an increase in CEO turnover that should prompt boards to evaluate their approach to succession planning and consider whether the board is adequately prepared to deftly manage these changes in leadership at the top of the organization.
If CEO and other management succession topics are on your plate this year, be sure to check out our recent webcast, “The Secret of My Success: Best Practices for Management Succession Planning,” which is available for free on demand to members of TheCorporateCounsel.net. Not a member? We can fix that. Contact us today at info@ccrcorp.com or call 800.737.1271 to sign up for a no-risk trial.
The DOJ hasn’t made any secret of its plans to swing the False Claims Act club at companies that it believes engage in DEI programs that run afoul of federal civil rights laws. In a recent “D&D Diary” blog, Kevin LaCroix says that the Trump Administration’s use of the FCA in this manner creates all sorts of issues under D&O policies:
From a D&O insurance perspective, there are many concerns here. The first is, as I have noted previously on this site (most recently here), FCA claims are an awkward fit with the typical D&O insurance policy. There is in fact a long history of D&O insurance coverage disputes arising in connection with underlying FCA claims. (Refer, for example, here.) Notice timing issues are common.
Coverage for FCA claims under public company D&O insurance may be limited because the FCA claims are typically entity only claims, but the public company D&O insurance policy provides coverage only for securities claims (which the FCA action is not). The D&O insurers often contend that FCA claims are essentially non-covered contract disputes, or stem from excluded professional services liability issues.
Kevin says that the good news is that the authority increasingly appears to support of the conclusion that D&O insurers must cover FCA claims. However, he points out that the government’s use of the FCA in this area may also increase companies’ vulnerability to follow-on securities class action claims.
In another step toward the mainstreaming of all things crypto, the NYSE announced that it plans to launch a 24/7 trading platform for tokenized securities. Here’s an excerpt from the NYSE’s parent company’s press release with some details about the platform:
NYSE’s new digital platform will enable tokenized trading experiences, including 24/7 operations, instant settlement, orders sized in dollar amounts, and stablecoin-based funding. Its design combines the NYSE’s cutting-edge Pillar matching engine with blockchain-based post-trade systems, including the capability to support multiple chains for settlement and custody.
Subject to regulatory approvals, the platform will power a new NYSE venue that supports trading of tokenized shares fungible with traditionally issued securities as well as tokens natively issued as digital securities. Tokenized shareholders will participate in traditional shareholder dividends and governance rights. The venue is designed to align with established principles for market structure, with distribution via non-discriminatory access to all qualified broker-dealers.
A WSJ article about the initiative notes that some crypto firms have launched tokens that track popular stocks and trade 24/7 on exchanges outside the US. However, those platforms have been plagued by price deviations between the tokens and the underlying stocks. The WSJ says that if the platform receives regulatory approval, it could be used by blue-chip companies to issue tokenized versions of their stock that would be accessible to U.S. investors.
Yesterday, the SEC announced that Christina Thomas will rejoin the agency to as Deputy Director of the Division of Corporation Finance and chief advisor on disclosure, policy, and rulemaking. Christina is currently a partner at Kirkland & Ellis and previously served as a senior advisor at the SEC, most recently as Counsel to SEC Commissioner Elad L. Roisman. Here’s an excerpt from the SEC’s press release announcing her appointment:
“Christina brings her deep technical experience in disclosure, compliance, and international securities law back to the Commission at a critical time,” said SEC Chairman Paul S. Atkins. “Her expertise will contribute meaningfully to the Division’s goals of facilitating capital formation and protecting investors in the modern operating environment.”
“Christina is a talented attorney with a deep understanding of corporate disclosure matters,” said James Moloney, Director of the Division of Corporation Finance. “Her experience, intellect, and practical ideas will be wonderful assets to our work in the Division and will support the Commission’s mission.”
With the SEC contemplating an overhaul of both the executive compensation disclosure rules and Regulation S-K, Christina is certain to have a lot on her plate. Fortunately, she’ll have some help, because the SEC separately announced the members of the team of senior Corp Fin staff who will be responsible for advising Director Jim Moloney on all matters the Division has before the Commission, “including rulemaking efforts, corporate disclosure matters, and all day-to-day operations needed to fulfill the SEC’s mission.”
Over on Cooley’s CapitalXchange Blog, Liz recently posted about a Nasdaq proposal to amend Rules 5450 and 5550 to impose a $5 million minimum market cap requirement on companies listed on Nasdaq’s Global and Capital Markets. Here’s an excerpt from her blog with some details about the proposal:
Nasdaq has proposed a new continued listing standard for companies listed on its Global and Capital Markets tiers. The proposed rule, which would amend existing Rules 5450 and 5550, would require these companies to maintain a minimum Market Value of Listed Securities of at least $5 million.
Nasdaq believes that once the market identifies significant problems in a company by assigning a very low market value, that company is no longer appropriate for continued listing and trading on Nasdaq because challenges facing such companies, generally, are not temporary and may be so severe that the company is not likely to regain compliance within a compliance period and sustain compliance thereafter. In Nasdaq’s view, it is also more difficult for market makers to make markets in the securities of these nano-caps, and for there to be a fair and orderly market.
Nasdaq is also proposing an amendment to Rule 5810 that would suspend trading and immediately delist from Nasdaq the securities of companies that do not satisfy the proposed new market cap requirement for 30 consecutive business days. The staff’s delisting notice would inform the company that its securities are immediately suspended from trading and subject to delisting.
Companies would not have a cure period to regain compliance with the market cap standard or be entitled to any stay in effectiveness. A company would be permitted to appeal the delisting decision to the Hearings Panel, but its securities would generally trade on the over-the-counter market while the review is pending, rather than on the exchange, and the Hearings Panel would not be able to grant an exception to the continued listing standard.
The rule proposal would also tie the Hearings Panel’s hands pretty tightly – it could overturn a delisting decision only if it finds that Nasdaq got the math wrong and the company never actually failed to satisfy the minimum market cap requirement. Other matters, such as the company’s subsequently regaining compliance with the requirement, could not be considered by the Panel.
This hasn’t hit the SEC’s website yet, but keep an eye out for it. Also, Liz’s blog covers a bunch of other recent Nasdaq rulemaking, so be sure to check out the whole thing.
We’ve blogged a few times about New York’s Martin Act and the NY AG’s eagerness to capitalize on statute’s seemingly limitless scope (see 2nd & 3rd blogs). Last week, the NYT reported that NY AG Letitia James has recently trotted out the Martin Act to target an area usually addressed by the feds – insider trading. Here’s an excerpt:
Attorney General Letitia James of New York filed an insider trading lawsuit on Thursday against a former biotech chief executive, accusing him of turning a $7.6 million profit on the sale of the company’s stock before the public learned that millions of doses of a Covid-19 vaccine were contaminated.
Filed in a New York State court, the lawsuit said that Robert G. Kramer, who was the chief executive of Emergent BioSolutions, knew of the systemic problems involving a vaccine it was helping AstraZeneca produce as part of the federal government’s Operation Warp Speed when he exercised his stock options.
The vaccine makers had to discard the tainted material and suspend production, sending Emergent’s stock into a free fall from its high of $134.46 a share in August 2020, according to the lawsuit.
Aside from the legal action against Mr. Kramer, who retired from Emergent in 2023, Ms. James announced on Thursday that the company, which is based in Gaithersburg, Md., would pay $900,000 as part of a settlement in connection with the insider trading case.
The Times says that the AG alleges that the former CEO’s conduct violated the Martin Act, while the former CEO denies wrongdoing. Interestingly, this isn’t the first time NY has used the Martin Act to target insider trading. In 2021, AG James used the statute to compel testimony and document production in an insider trading investigation aimed at Eastman Kodak.
Tune in at 2:00 pm Eastern today – Tuesday, January 20th – for our annual 90-minute webcast, “The Latest: Your Upcoming Proxy Disclosures.” We’ll hear from Mark Borges of Compensia and CompensationStandards.com, Alan Dye of Hogan Lovells and Section16.net, Dave Lynn of Goodwin Procter and TheCorporateCounsel.net and Ron Mueller of Gibson Dunn on a variety of compensation “hot topics” – including:
– Status of SEC Executive Compensation Disclosure Requirements
– Other Possible Topics for SEC Review
– Incentive Compensation – Disclosure Considerations for Tariff Challenges and Discretionary Adjustments
– Executive Security and Other Key “Perks” Disclosures
– Investor Perspectives: “Homogenization” and Performance Equity
– Proxy Advisors – Impact of the Executive Order
– Proxy Advisors – Voting Policy Updates for 2026
– Proxy Advisors – Impact of Announced Move Towards “Customization” of Voting Policies
– Proxy Advisors – Status of Legal Challenges in Texas and Florida
– New Challenges with Shareholder Engagement
– Clawback Policies – Lessons from 2025
– Compensation-Related Shareholder Proposals in 2026
– ESG and DEI Goals: Impact of Shifting and Conflicting Perspectives
– Managing Stock Price Volatility When Granting Equity
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This program will also be eligible for on-demand CLE credit when the archive is posted, typically within 48 hours of the original air date. Instructions on how to qualify for on-demand CLE credit will be posted on the archive page.
Foley & Lardner’s Patrick Daugherty recently shared his article “10 FAQ About Crypto for Corporate Directors” with us. This resource covers a lot of the basics about digital assets and serves as a good starting point for helping you to educate private and public company directors about crypto. This excerpt addresses the differences between the traditional financial system and decentralized finance typically associated with crypto assets:
Traditional finance (sometimes called “TradFi”) differs from decentralized finance (“DeFi”) with respect to control. TradFi is controlled by banks and governments. DeFi is controlled by code. US dollar deposits, stocks and bonds are traditionally custodied in and by banks, broker-dealers and clearing agencies and are bought, transferred and sold using exchanges and those other TradFi institutions. The assets are controlled by centralized entities and identifiable human beings. Most crypto assets, in contrast, can be held and transferred without an intermediary. They can be transferred using personal computers and the internet from one person’s “wallet” to another’s wallet.
Metamask and Ledger are two well-known wallet providers. This is “peer-to-peer” transfer. That said, there are centralized crypto exchanges, such as Coinbase and Crypto.com, that can be used to transfer and custody crypto assets. And there are decentralized exchanges, such as Uniswap, where crypto assets are bought and sold peer-to-peer, with no human involvement other than the buyer and the seller. The Cube Exchange is a hybrid exchange, combining centralized ordermatching with decentralized custody and settlement.
Topics addressed in the FAQs include, among others, “what is crypto?” “Is crypto lawful?” “What do Miners do? What is Proof of Work? Proof of Stake?” “What are ‘utility tokens’?” and “What is a ‘stablecoin,’ and how does it compare to crypto assets like BTC and ETH?”
Public company boards are accustomed to scrutiny from a variety of sources, including regulators, investors, analysts, reporters, influences, and whistleblowers. This Skadden memo says that “watchdogs” that don’t have a stake in the company but demand board action on their hot-button issues should be added to that list, and that boards should take their demands seriously:
Boards may wonder whether they are obligated to respond to watchdogs or other third parties raising concerns about critical company issues. The board must exercise judgment in each instance about whether and how to respond. As a practical matter, however, the board should at least consider a watchdog’s demands and document its response and reasoning. Doing nothing can be risky for several reasons:
– Watchdogs may identify real issues that, if addressed, could benefit the company.
– If ignored, these demands could later be cited as “red flags” in litigation or regulatory investigations, suggesting the board failed in its oversight duties.
– Plaintiffs’ lawyers and regulators often use hindsight to argue that ignored warnings were clear signs of deeper problems.
The memo provides guidance to boards on how to evaluate and respond to watchdogs, and says that in order to appropriately fulfill their oversight responsibilities, boards “should respond as they would to similar issues raised by whistleblowers, shareholders or government agencies.”
