President Trump has been firing off executive orders like his pen is a machine gun ever since taking office last Monday, and it can be very hard to keep up with the pace he’s setting. Fortunately, Akin Gump has set up this page on its website to help you keep track of those orders. The page contains links to the text of specific orders and indexes them by topic and chronologically. Check it out – it’s a very helpful resource!
On Friday, Meredith blogged about the SCOTUS’s decision to lift the 5th Circuit’s nationwide injunction against enforcement of the Corporate Transparency Act. However, she also noted that a separate injunction issued by a Texas federal district court remained in place. That left potential filers asking a familiar question: “What the heck are we supposed to do?” Fortunately, FinCEN weighed in later in the day and said filers can sit tight for now. Here’s what FinCEN posted on its website:
On January 23, 2025, the Supreme Court granted the government’s motion to stay a nationwide injunction issued by a federal judge in Texas (Texas Top Cop Shop, Inc. v. McHenry—formerly, Texas Top Cop Shop v. Garland). As a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in Texas Top Cop Shop. Reporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.
It’s possible that the injunction in Smith v. Treasury could soon meet the same fate as the one in Texas Top Cop Shop. As Gibson Dunn observed in their recent update on the status of the CTA, “given the Supreme Court’s recent order staying the Top Cop Shop order, the government could obtain a similar stay of the district court’s order in Smith if the government requests that relief (or if the district court stays its order unilaterally) in light of the Supreme Court’s decision.” Stay tuned.
One item that doesn’t deserve to get lost in the avalanche of last week’s news is the joint statement from Commissioners Uyeda, Peirce and Crenshaw on the departure of former SEC Chair Gary Gensler. This excerpt gives you a sense of its tone:
Although as Commissioners we approached policy issues from different perspectives, there was always dignity in our differences. Chair Gensler has been committed to bipartisan engagement and a respectful exchange of ideas, which has helped facilitate our service to the American public. For that we are deeply grateful.
We have finalized rules that have promoted market integrity and corporate governance, streamlined open-end fund disclosures, reduced settlement times, and passed needed reforms to the plans corporate insiders use to buy and sell company stock, among many other policy changes. Together we have returned billions of dollars to investors harmed by violations of the securities laws and helped educate the public on the risks and rewards of investing their savings. This record helps cement Chair Gensler’s legacy of unwavering commitment, not only to public service, but to the American investor.
It’s no secret that Commissioner Uyeda and Commissioner Peirce disagreed strenuously with many of the actions taken by the SEC under Gary Gensler’s leadership, so the graciousness of their statement saluting his service is notable. As I read it, I couldn’t help thinking about the old “Looney Tunes” cartoons featuring Ralph Wolf and Sam Sheepdog. Our Boomer & Gen X readers may recall that Ralph’s job was to steal sheep, and Sam’s job was to clobber Ralph. Both gave it their all during working hours, but they were chums before and after the whistle blew. You know, I think there’s a pretty good civics lesson for all of us baked into those old cartoons!
On Friday, the SEC announced that Acting Chair Mark Uyeda appointed several new acting senior staff members to fill vacancies created by recent departures. Here’s the new lineup, as laid out in the SEC’s press release:
– Jeffrey Finnell, Acting General Counsel
– Robert Fisher, Acting Director of the Division of Economic and Risk Analysis
– Kathleen Hutchinson, Acting Director of the Office of International Affairs
– Samuel Waldon, Acting Director of the Division of Enforcement
– Ryan Wolfe, Acting Chief Accountant
If you’re wondering about Corp Fin, remember that Cicely LaMothe was appointed Acting Director when Eric Gerding announced his departure last month.
Yesterday’s WSJ featured an editorial with a suggestion for Elon Musk to consider as part of DOGE’s hunt for federal agencies to “wish into the cornfield”. Interestingly, it’s an idea with a bipartisan history and one that just might resonate with incoming SEC Chair designee Paul Atkins – but also one that the crypto industry might not be as enthused about. Here’s an excerpt from the opinion piece by Duke University’s Lee Reiners:
If DOGE is to avoid the fate of prior blue-ribbon commissions and panels with a similar goal, it should begin with the low-hanging fruit and encourage Congress to merge the SEC and CFTC before taking up a crypto market structure bill.
DOGE would have an ally in this effort in Paul Atkins, Mr. Trump’s nominee to lead the SEC. Testifying in 2015 on the effect of Dodd-Frank, Mr. Atkins told the House Financial Services Committee that the legislation’s authors “blew” a “once-in-a-lifetime opportunity to streamline our crazy quilt of financial services regulators,” most notably by failing to merge “the SEC and CFTC to create one markets regulator.” Working alongside DOGE as well as artificial-intelligence and crypto czar David Sacks, Mr. Atkins has an opportunity to right this wrong. Let’s hope they don’t blow it.
The editorial points out one potential fly in the ointment – the crypto industry, which poured huge sums of money into Trump’s campaign, wants to make passage of the FIT21 legislation a top priority. That bill, which passed the House last summer, essentially divides regulatory responsibility for crypto between the SEC and the CFTC.
This division of authority means that both agencies will need to spend money ramping up to regulate their piece of the action and makes inter-agency turf battles almost inevitable. That’s not exactly a recipe for enhanced governmental efficiency. Accordingly, the editorial calls for Congress to merge the SEC and CFTC prior to enacting legislation providing a regulatory scheme for the crypto industry. That kind of delay is unlikely to sit well with the crypto crowd.
Former President Jimmy Carter passed away over the weekend, and as I read some of the tributes to him, I thought it might be interesting to see if I could find some information about how he dealt with the SEC during his tenure. What I found was a reminder of just how differently policy makers approached securities regulation during that era. Here’s an excerpt from an SEC Historical Society article on the agency’s evolution during the period from 1973-1981:
President Carter’s view of the SEC and its role as a regulator of the markets stands in sharp contrast to his other initiatives to regulate the economy. Although willing to consider price and wage controls, President Carter took a hands-off approach to the SEC.
His archives provide clues as to why he took that approach. The public worries about inflation meant that that issue would remain the single most important of his Presidency. But nearly as important was Carter’s belief that the SEC was a non-partisan agency, and that once he made his appointments, he should refrain from attempts to influence its policies. He respected the SEC and its staff and believed that the SEC and the markets could manage without his political influence and interference. After appointing [Harold] Williams as SEC Chairman, Carter remained mostly neutral on SEC regulatory matters.
In light of the increasing politicization of the securities regulation process that we’ve witnessed over the past couple of decades, Carter’s non-partisan, technocratic approach seems rather quaint. Even so, it’s an approach that I think we should aspire to return to – and putting a stop to the practice of using the agency to accomplish political goals that the party in power can’t achieve through legislation would be a good first step in that direction.
As we say farewell to a turbulent 2024 and turn the corner into the start of a new year, I wanted to pause for a moment to say “thank you” on behalf of our entire editorial team to all our readers for following our blogs, sharing tips on newsworthy topics, and gently pointing us in the right direction when we go astray. We wish everyone a peaceful and prosperous 2025. Our blogs will be back in the new year, but to help close this one out in style, here’s the University College Dublin Choral Scholars’ rendition of “Auld Lang Syne.”
It’s been a little over a year since the SEC’s requirement to disclose material cybersecurity incidents on Form 8-K went into effect, and this Paul Hastings report provides some insight into how companies have responded. The report reviewed 75 disclosures from 48 public companies over the past year, and here are some of the key findings:
– Since the SEC rules became effective, there has been a 60% increase in the number of cyber incidents disclosed by public companies.
– Fewer than 10% of the disclosed incidents include a description of the material impact of the incident. 78% of disclosures were made within eight days of discovery of the incident, with 42% of companies providing an update by issuing an updated Form 8-K after the initial disclosure.
– Third-party breaches had the widest ranging impact for public companies, with one in four breaches stemming from a third-party incident.
This excerpt from the report notes that threat actors are apparently “blowing the whistle” on companies that have been the victims of a cyber attack, but haven’t reported it:
In an aggressive move to pressure victims into paying ransoms, some threat actors have filed whistleblower reports with the SEC, claiming that companies have failed to report active incidents on Form 8-K. The threat actor then makes its “whistleblower” report public, attempting to publicly shame victims and encourage payment. While such tactics have failed each time, they have generated significant media attention, with over 40 news articles published in publications such as The Wall Street Journal, Bloomberg, Security Week and others.
FinCEN has posted its response to the latest decision from the 5th Circuit vacating its earlier stay of the district court’s preliminary injunction against enforcement of the Corporate Transparency Act. Here’s the gist of it:
On December 23, 2024, a panel of the U.S. Court of Appeals for the Fifth Circuit granted a stay of the district court’s preliminary injunction entered in the case of Texas Top Cop Shop, Inc. v. Garland, pending the outcome of the Department of the Treasury’s ongoing appeal of the district court’s order. FinCEN immediately issued an alert notifying the public of this ruling, and recognizing that reporting companies may have needed additional time to comply with beneficial ownership reporting requirements, FinCEN extended reporting deadlines.
On December 26, 2024, however, a different panel of the U.S. Court of Appeals for the Fifth Circuit issued an order vacating the Court’s December 23, 2024 order granting a stay of the preliminary injunction. Accordingly, as of December 26, 2024, the injunction issued by the district court in Texas Top Cop Shop, Inc. v. Garland is in effect and reporting companies are not currently required to file beneficial ownership information with FinCEN.
FinCEN notes that reporting companies are not subject to liability if they fail to make a beneficial ownership filing while the order remains in force, but they may continue to voluntarily submit beneficial ownership information reports.
If you’re in a jurisdiction that requires you to report your CLE compliance on a calendar year basis, then you may be scurrying around this week trying desperately to find the hours you need to get into compliance. I’ve been in that boat myself, and it’s made for some pretty long and boring New Year’s Eves. To make matters worse, I often ended up with some pretty irrelevant CLE courses to choose from, including such gems as “Litigating Truck Accidents in Ohio.”
If you’re looking for a more relevant way to pick up your CLE credits, check out our inventory of “on -demand” webcasts. These are eligible for credit in most states, and come in bite-sized, one-hour portions. Be sure to follow the instructions on the webcast’s home page in order to obtain credit. If you have questions about CLE credit, please visit our CLE FAQ page or contact our CLE provider: CEU Institute, accreditation@ceuinstitute.net.
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