We are of course keeping track of all of the latest tariff developments here at TheCorporateCounsel.net, and you can find coverage of these developments in our “Trump Administration Tariffs” Practice Area. This Practice Area includes:
If you do not have access to the Practice Areas and all of the other practical guidance that is available here on TheCorporateCounsel.net, I encourage you to email info@ccrcorp.com to sign up today, or sign up online.
The WSJ noted in an article this week that U.S. companies are repurchasing their own shares at a record pace, with stock buybacks expected to total over $1.1 trillion in 2025, which would mark an all-time high. The article notes that the pace of buybacks is led by financial institutions and technology companies, with the 20 largest companies accounting for almost half of repurchases.
What we do not hear now amidst this latest buyback frenzy is the steady drumbeat of criticism of stock repurchases from regulators and legislators. Over the course of the past several years, corporate share repurchase activity has gotten a “bad rap” from a wide range of sources, including the SEC, the media, legislators, academics and some investors and analysts. Much of their focus has been on the use of share repurchases to accomplish short-term objectives over long term investments, managing reported per-share earnings metrics, and enriching insiders who sell their stock at the rising prices resulting from the repurchase activity. We saw a significant amount of criticism of corporate share repurchases during the volatile markets of the COVID-19 pandemic and in the uncertain economic and market environment that followed the pandemic. At the time, Congress enacted provisions of the CARES Act that prohibited companies from conducting share repurchases if they received emergency loans from the government and a 1% excise tax on stock buybacks by publicly traded corporations.
It is hard to believe now that just a little over two years ago, the SEC adopted amendments to the share repurchase disclosure requirements that would have required companies to disclose detailed daily quantitative repurchase data at the end of every quarter (rather than on a daily basis as proposed) in an exhibit to their periodic report on Form 10-Q and Form 10-K. In a blog from back then, I tried to get to the “why” behind these rule changes, noting that the amendments reflected a mistrust of share repurchase activity even though the SEC’s own adopting release for the rules noted:
Existing studies, including a review by Commission staff in 2020, have considered the rationales and effects of repurchases. As our staff concluded, repurchases are often employed in a manner that may be aligned with shareholder value maximization. Together with dividends, repurchases provide an avenue for returning capital to investors, which may be efficient if the issuer has cash it cannot efficiently deploy. Such returns of capital may also send signals to investors that managers are operating the issuer efficiently rather than retaining excess cash for potentially suboptimal use.
The SEC’s repurchase rulemaking was doomed from the start, however, and in December 2023, the Fifth Circuit Court of Appeals vacated the SEC’s rule amendments. In March 2024, the SEC adopted technical amendments that restored the share repurchase disclosure rules back to their pre-2023 quarterly disclosure format. The SEC under former Chair Gary Gensler’s leadership did not seek to resurrect the share repurchase rulemaking following the defeat in the courts.
While today’s relative calm in the war against share repurchases allows companies to proceed with their share repurchase activity with fewer distractions, it is always important to consider all of the corporate, securities and governance considerations that go into developing, approving, announcing and conducting a share repurchase program. Be sure to check out all of the great resources that we have available in our “Share Repurchases” Practice Area.
I hope you have had an enjoyable summer filled with some memorable activities. Even though we still have a couple weeks to go until Labor Day, I am already feeling the twinge of back-to-school jitters, as I make final preparations for the course I co-teach during the Fall semester and get ready to take my youngest child back to college.
One summer activity that is not so enjoyable is tackling a public company’s filer status determination. As we noted in the May-June 2021 issue of The Corporate Counsel, the many companies with calendar year-end fiscal years must use June 30 as their determination date for deciding what they have to disclose and how fast they have to disclose it. As we noted in that issue:
Primarily to make things easier on what are perceived as smaller public companies, the SEC and Congress have created what is often a bewildering maze of filer status tests that are used to determine when a company files its reports with the SEC and the content of those reports. In the old days, there was a relatively clear line of demarcation between the “regular” companies and companies that were designated as “small business issuers,” and small business issuers had their own integrated disclosure regime codified in Regulation S-B and their own registration forms.
Over the years, for a variety of reasons, that approach gave way to a patchwork of sometimes overlapping filer designations that are generally still geared toward the goal of scaling the SEC reporting and disclosure system to the size and sophistication of the reporting company. As recently as last year, the SEC revisited the various tests used for determining filer status in an effort to “right-size” the burdens on public companies (see our July-August 2020 issue at page 2). In this issue, we revisit this topic with a comprehensive guide to filer status.
Much like back-to-school jitters are a true summer phenomenon, filer status determination jitters are a real thing as well. Changing filer status can represent a significant development for companies, both positive and negative. In The Corporate Counsel article, we offered these important suggestions to keep in mind:
– Disclosure Committee Involvement – If the company has a disclosure committee, it is important that the committee be aware of and discuss the implications of changes in filer status. The disclosure committee should prepare contingency plans for situations when filer status changes and significant disclosure changes may be required, such as moving from non-accelerated filer to accelerated filer status (which results in the need to provide a Sarbanes-Oxley Section 404 auditor attestation) or losing smaller reporting company status (which would result in the need to provide more, e.g., financial and executive compensation disclosure). The disclosure committee can also consult with the financial reporting and accounting functions to discuss the preparations necessary for meeting accelerated filing deadlines.
– Audit Committee Involvement – For some companies, it may be important to keep the audit committee apprised of the company’s filer status, particular at times when the filer status has changed or is likely to change. With this information, the Audit Committee can be prepared for, e.g., obtaining an auditor attestation for a company transitioning from non-accelerated to accelerated filer status or for providing more financial information when a company loses smaller reporting company status.
– Ownership – The filer status determination can tend to get lost in the press of other business, so it is important to assign one person or department within the company with ownership of the filer status determination to make sure that it happens in a timely manner and is communicated to the appropriate people within the company once the determination is made. Adding the relevant filer status determination dates to the company’s reporting calendar and/or checklist is also helpful to ensure that the determination is made in a timely manner.
– Determination Date Caution – As discussed above, the prospect for SEC Enforcement interest if the company were perceived to be manipulating the filer status determination means that companies should be cautious if they find themselves in a position of being near a filer status transition point around the last business day of the company’s second fiscal quarter. A risk assessment should be done when a company finds itself in that situation, and the company may want to implement special measures to avoid the appearance of improper trading.
– Planning Ahead – In our experience, no non-accelerated filer or smaller reporting company wants to retain that status forever. As a company grows and its market capitalization increases, it makes sense to anticipate and plan for filer status transitions. In some situations, such as with smaller reporting companies, this may mean providing more disclosure than is currently required, so that the company is ready to provide larger company disclosures when the smaller reporting company status goes away. In the case of non-accelerated filers, it means preparing for an auditor attestation of internal controls before the company finds itself in the situation of only have 6 months to do so.
Fortunately for all of this, the SEC’s current leadership seems to be interested in exploring potential changes to the filer status maze. We hope that some consideration will be given to reducing the complexity while enhancing the accommodations available to emerging growth companies and smaller reporting companies.
Last Thursday, the Trump Administration issued an Executive Order seeking to encourage sponsors of 401(k) plans and other defined contribution plans to offer a wide range of “alternative assets.” This Goodwin alert notes:
On August 7, 2025, the Trump Administration issued a long-awaited executive order (the “Executive Order”) to encourage sponsors of 401(k) and other participant-directed defined-contribution plans that are governed by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) (collectively, “DC plans”) to consider offering access to alternative investments, such as private equity, private credit, real estate, funds investing in digital assets, commodities, project financing, and lifetime income investments.1 Specifically, the Executive Order directs the Department of Labor (the “DOL”) to take the following steps:
– By February 3, 2026, reexamine the DOL’s guidance on a fiduciary’s duties regarding alternative asset investments in DC plans.
– By February 3, 2026, clarify the DOL’s position on alternative assets and the appropriate fiduciary process associated with offering asset allocation funds containing investments in alternative assets. Relatedly, the DOL must prioritize actions that “may curb ERISA litigation that constrains fiduciaries’ ability to apply their best judgment in offering opportunities to relevant plan participants.”
– Consult with the Secretary of the Treasury, the Securities and Exchange Commission (the “SEC”) and other federal regulators to determine whether parallel regulatory changes should be made by those agencies to give effect to the purpose of the Executive Order.
The Executive Order also directs the SEC to facilitate access to alternative assets for participant-directed defined-contribution retirement savings plans by revising applicable regulations and guidance.
While the ultimate impact of the Executive Order will depend on the DOL and the SEC’s specific actions to implement it, the Order should add momentum to efforts to offer DC plan participants access to private market investment strategies.
Meredith recently highlighted on The Proxy Season Blog here on TheCorporateCounsel.net that the NYSE has released a guide titled The Public Company Series: Board Structure and Composition, which was developed in collaboration with J.P. Morgan. This guide is a must read for governance professionals because it provided expert guidance on the “evolving expectations” of boards and is intended to assist directors and officers as they seek to “navigate the intricacies of board design and effectiveness.” Key topics that are covered in the guide include:
– Building the Board – Global board governance trends, structural considerations, and the attributes of effective directors;
– Board Committees and Special Roles – Audit, compensation, and nominating committees, plus evolving leadership structures;
– Strategic Oversight and Governance in a Changing Environment – M&A, activism, and positioning for the future;
– Boardroom Risk, Compliance, and Crisis Management – Cybersecurity, D&O insurance, and proactive risk mitigation;
– Board Refreshment and Succession Planning – Modern strategies for recruitment, assessment, and long-term planning;
– Assessing and Developing the Board – Tools for board education, upskilling, and cultural alignment; and
– The Evolving Boardroom – Talent pipelines, disclosure practices, and future-focused shareholder engagement.
This guide is 372 pages long, so it really provides some definitive guidance on the topic of board composition and structure.
If you do not have access to The Proxy Season Blog and all of the other practical guidance that is available here on TheCorporateCounsel.net, I encourage you to email info@ccrcorp.com to sign up today, or sign up online.
As the final weeks of summer fly by, we can’t help but turn our attention to the fact the proxy season will be upon us again very soon. For those that want to look back on what we experienced during this year’s season, Gibson Dunn just published their annual summary of shareholder proposal developments. Key takeaways from this year’s summary include:
– Shareholder proposal submissions fell for the first time since 2020.
– The number of proposals decreased across all categories (social, governance, environmental, civic engagement and executive compensation).
– No-action request volumes continued to rise and outcomes continued to revert to pre-2022 norms, with the number of no-action requests increasing significantly and success rates holding steady with 2024.
– Anti-ESG proposals continued to proliferate in 2025, but shareholder support remained low.
– Data from the 2025 season suggests that the Staff’s responses to arguments challenging politicized proposals (those proposals that express either critical or supportive views on ESG, DEI and other topics) were driven by the specific terms of the proposals and not by political perspectives.
– New Staff guidance marked a more traditional application of Rule 14a-8, but the results of the 2025 season indicate that Staff Legal Bulletin 14M (“SLB 14M”) did not provide companies with a blank check to exclude proposals under the economic relevance, ordinary business or micromanagement exceptions.
The Gibson Dunn analysis notes that shareholders submitted 802 shareholder proposals during the 2025 proxy season, which was down 14% from 929 in 2024. The percentage of proposals excluded through an SEC no-action request increased substantially, rising to 25% in 2025 as compared to only 15% in 2024. Companies submitted 378 no-action requests during the 2025 proxy season, up 41% from 269 submitted in 2024.
With our recently volatile stock markets comes heightened securities litigation risks, as significant stock price drops often prompt plaintiffs’ firms to look for claims. The research firm SAR recently published its latest U.S. Securities Litigation Risk Report, which quantifies securities litigation risk for U.S. public companies. The press release announcing the report notes:
“Our data and empirical analyses confirm that directors and officers of U.S. public companies face a notable increase in securities litigation risk in 2025, despite record-setting public equity valuations. Issuers now face an increase of about $1.8 trillion in market capitalization losses linked to High-Risk adverse corporate events,” said Nessim Mezrahi, Co-Founder and CEO of SAR.
Other key takeaways from the report include:
– As of June 2025, the sector with the greatest market capitalization losses as a percentage of the sector-specific market capitalization is Health Care at 25.88%, followed by Industrials at 18.26%, and Consumer Discretionary at 17.79%, respectively.
– Information Technology companies faced the greatest market capitalization losses per High-Risk ACE, amounting to $2.21 billion, followed by Communication Services and Consumer Staples with $1.95 and $1.32 billion, respectively.
– The sector with the highest median SAR Risk Score, and therefore facing a higher probability of defending a securities class action, is Health Care with a median score of 33.18%, followed by Information Technology and Consumer Discretionary with 25.41% and 26.39%, respectively.
We’ve previously blogged about some of the new legal and compliance risks that companies face as a result of the Trump administration’s tariff regime. That blog highlighted a DOJ memo stating that its policies on white collar crime identified “trade and customs fraudsters, including those who commit tariff evasion” as a key threat to national security. This Blank Rome memo says that the DOJ is putting its money where its mouth is when it comes to tariff enforcement. Here’s the intro:
The U.S. Department of Justice (“DOJ”) has announced a significant realignment of resources that will fundamentally reshape criminal enforcement of international trade rules. By combining senior prosecutors from its Market Integrity and Major Frauds Unit (“MIMF”) with attorneys reassigned from the soon-to-be-defunct Consumer Protection Branch, DOJ is forging a newly branded “Market-, Government-, and Consumer-Fraud Unit” with a sharpened mandate: focus on customs fraud and tariff evasion.
This initiative—unveiled in speeches, internal memoranda, and follow-on press coverage—signals that trade and customs violations, once largely the province of civil enforcement by U.S. Customs and Border Protection (“CBP”) or DOJ’s Civil Fraud Section, will now also sit squarely on the DOJ’s criminal docket.
The memo says that the DOJ’s action can be expected to result in, among other things, acceleration of investigations, criminalization of historically civil misconduct, heightened prosecutorial interest due to the national security framing of cases, and broader asset seizure and forfeiture efforts.
Shortly after the Trump administration announced its tariff program, warning flags were raised about the possibility of the False Claims Act being used against companies alleged to have engaged in efforts to evade applicable tariffs. Those warnings proved to be prescient, as the intro to this Sullivan & Cromwell memo explains:
On July 15, 2025, the United States Attorney’s Office for the District of South Carolina filed a qui tam intervenor complaint under the False Claims Act in United States ex rel. Joyce v. Global Office Furniture, LLC, et al., alleging that a South Carolina office furniture company, Global Office Furniture, submitted false invoices to Customs and Border Protection (“CBP”), evading at least $2 million in tariffs on imported goods.
The company allegedly engaged in a so-called “double-invoicing scheme,” whereby an importer creates two separate invoices—one reflecting the accurate price that is used to collect payment from the purchaser, and one with a falsely reduced price that is submitted to CBP and used to calculate customs duties. The company’s former office manager filed a qui tam whistleblower complaint under seal on March 30, 2020, leading to both a civil and criminal investigation later that year.
Although the conduct alleged in the complaint predates “Liberation Day” by several years, S&C’s memo says that the complaint confirms that the Trump administration’s focus on tariff and trade issues is reflected in DOJ civil and criminal enforcement priorities, and that companies with international supply chains need to review and consider updating their compliance programs to ensure that customs and tariff-related issues are appropriately addressed.
Last week, Attorney General Pam Bondi issued a memorandum to all federal agencies clarifying the application of federal antidiscrimination laws to DEI programs. The memo highlights five categories of conduct that could give rise to liability for violating federal anti-discrimination laws. This excerpt from a Latham memo on the guidance summarizes the categories of conduct that the DOJ finds to be problematic:
1. Preferential treatment based on protected characteristics, which includes race-based scholarships or programs, preferential hiring or promotion practices, and access to facilities or resources based on race or ethnicity.
2. Prohibited use of proxies for protected characteristics, which could occur when a federally funded entity “intentionally uses ostensibly neutral criteria that function as substitutes for explicit consideration of race, sex, or other protected characteristics.” The Guidance notes that potentially unlawful proxies include requiring narratives related to “overcoming obstacles” or “diversity statements” insofar as they “advantage[] those who discuss experiences intrinsically tied to protected characteristics[.]” Critically, the Guidance suggests that efforts to recruit from particular organizations or geographic areas can constitute unlawful activity if these entities or locations were chosen “because of their racial or ethnic composition rather than other legitimate factors.”
3. Segregation based on protected characteristics, which includes race-based training sessions, segregation in facilities or resources, and implicit segregation through program eligibility. Importantly, DOJ reiterates the administration’s position that “failing to maintain sex-separated athletic competitions and intimate spaces can also violate federal law” when transgender individuals are permitted “to access single-sex spaces designed for females[.]”
4. Unlawful use of protected characteristics in candidate selection, which includes race-based “diverse slates” in hiring, sex-based selection for contracts, and race- or sex-based program participation goals (e.g., requirements that programs have a certain percentage of participants from underrepresented groups).
5. Training programs that promote discrimination based on protected characteristics or promote hostile environments, which include trainings that affirm that “all white people are inherently privileged” or recognize the concept of “toxic masculinity.” The Guidance notes that such trainings “may” violate Title VI or Title VII “if they create a hostile environment or impose penalties for dissent in ways that result in discriminatory treatment.”
The final section of the AG’s memorandum is devoted to a discussion of recommended best practices for entities to employ in order to ensure their programs comply with federal law.
