DROPLETS

A federal court in New York has blocked the state's Climate Change Superfund Act, a law designed to recover $75 billion from fossil fuel companies for climate adaptation projects. Chief Judge Brenda Sannes held the Act is preempted by the federal Clean Air Act, reasoning its strict liability scheme targeting global greenhouse gas emissions was indistinguishable from state-law nuisance claims the Second Circuit previously rejected in City of New York v. Chevron. The decision provides a significant new defense for energy companies facing a wave of state-level climate liability statutes and lawsuits, and it may influence a similar pending challenge to Vermont's superfund law. The court also determined that applying the law to foreign producers would be barred by the foreign affairs doctrine. Counsel for energy and industrial clients should monitor New York's expected appeal. The ruling’s long-term impact may be shaped by the U.S. Supreme Court, which is set to hear arguments on related preemption issues in Suncor Energy v. County Commissioners of Boulder County on October 5, 2026.

The European Union is advancing its General Pharmaceutical Legislation (GPL), the most significant reform of its medicines framework in more than 20 years. The legislation will fundamentally alter the landscape for intellectual property and regulatory protections for innovative drugs, moving from a predictable timeline to a more variable, incentive-based system.

Sophisticated counsel and clients care because the GPL proposes to shorten baseline data and market exclusivity periods while making them conditional. Companies may earn extensions only by meeting new criteria such as addressing an unmet medical need or conducting specific comparator trials. This introduces significant uncertainty and requires a much tighter, earlier integration of regulatory, clinical, and IP strategy. Key changes also include a revised orphan-drug framework, an expanded 'Bolar' patent-infringement exemption for generics, and codified rules for 'skinny label' biosimilars.

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The US Federal Communications Commission (FCC) on July 28, 2026, added foreign-produced advanced robotic devices to its "Covered List," effectively banning new models from the US market. The prohibition applies to equipment requiring FCC authorization for importation or sale, which includes most robotics systems. This action continues the FCC's trend of targeting entire product categories deemed a national security risk, not just specific companies, and is widely seen as aimed at Chinese technology.

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The Eleventh Circuit's en banc-style reversal in United States ex rel. Zafirov v. Florida Medical Associates, LLC is the most consequential False Claims Act ruling of the cycle. Applying Buckley and Lucia, the panel held that qui tam relators do not occupy a continuing federal office because the role is personal to a single lawsuit, carries no government salary, and is a litigation posture rather than a statutorily established position. That avoids a circuit split on the Appointments Clause question and keeps whistleblower suits—1,297 filed in fiscal 2025—moving in every circuit. The win is partial: the district court must now decide whether qui tam relators improperly exercise core executive power under the Vesting and Take Care Clauses, a theory two Fifth Circuit judges have urged. With multiple Supreme Court justices signaling interest, defendants in declined cases should keep constitutional challenges in play while relators and government enforcement teams should expect continued, if contested, qui tam throughput.

The U.S. Treasury has launched "Operation Economic Outcast," a major escalation of its economic pressure campaign against Iran. In late August 2026, Treasury's Office of Foreign Assets Control (OFAC) expanded secondary sanctions risk by designating Iran’s digital-asset, technology, gold, aviation, and shipping sectors. Simultaneously, the Financial Crimes Enforcement Network (FinCEN) proposed a special measure under Section 311 of the USA PATRIOT Act to cut off Banque Misr UAE from the U.S. financial system, labeling it a primary money laundering concern.

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Under a new executive order declaring a national emergency, the U.S. Secretary of Energy now has broad authority to address national security risks in the nation’s bulk-power system. The order allows the Department of Energy (DOE), acting under the International Emergency Economic Powers Act (IEEPA), to review and prohibit transactions involving electric-grid equipment sourced from "Covered Foreign Entities," a list including China, Belarus, Iran, and Venezuela. This authority extends to a wide range of hardware, such as transformers, battery storage systems, and industrial control systems, plus related software and firmware. Sophisticated counsel should note the order’s reach is not just prospective; the DOE can impose mitigating measures or mandate the removal of equipment already in service, creating significant risk for existing infrastructure. The action is seen as part of a broader U.S. effort to reduce dependency on Chinese technology in critical sectors. The DOE is required to publish implementing regulations within 120 days, and companies with potential exposure should begin

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The United States is formally challenging the European Union's ambitious new sustainability regulations, creating significant uncertainty for multinational companies. In a formal letter, the US Mission to the EU stated that the Corporate Sustainability Due Diligence Directive (CSDDD) and Corporate Sustainability Reporting Directive (CSRD) impose costly and burdensome extraterritorial obligations that will harm US businesses. The US objects to the EU’s “double materiality” standard and warned of a potential “wave of civil litigation” against US firms in member-state courts. Underscoring the seriousness of the dispute, a bill has been introduced in the US House of Representatives that would require the US Trade Representative to launch a Section 301 investigation into the EU rules as potentially unreasonable or discriminatory trade practices. The US government has threatened to take “any actions necessary” to shield its companies. Major-firm clients with transatlantic operations must now navigate a complex and potentially confrontational regulatory environment. Counsel should monitor f

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In a significant policy reversal, the Financial Crimes Enforcement Network (FinCEN) has issued a final rule that permanently exempts domestic entities from the reporting requirements of the Corporate Transparency Act (CTA). The rule, published August 14, 2026, also removes U.S. persons from the definitions of reportable “beneficial owners” and “company applicants.”

This change effectively ends the broad beneficial ownership information (BOI) reporting regime for millions of U.S. companies. For sophisticated counsel and clients, this eliminates a major compliance burden. However, foreign entities registered to do business in the U.S. remain subject to a narrowed reporting framework, though they no longer need to report information on U.S. beneficial owners. Crucially, FinCEN emphasized that the rule does not alter financial institutions’ separate Customer Due Diligence (CDD) obligations.

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The FAA published a proposed rule on July 30, 2026, that would use authority under the Commercial Space Launch Act to make specified requirements under NEPA, the Endangered Species Act, the Clean Water Act, the Clean Air Act, the National Historic Preservation Act, the Coastal Zone Management Act, and other federal environmental and natural-resource laws generally inapplicable to launch and reentry licenses, site operator licenses, and experimental permits. The proposal implements Executive Order 14335 and responds to a forecast that licensed commercial space operations will more than double over the next decade. The FAA framed duplicative environmental reviews as an obstacle to its public-safety mission rather than a meaningful protection of additional interests. The comment period closed August 31, 2026, and the rule could face litigation over the scope of the transportation secretary's waiver authority and the treatment of related federal actions. In a separate but parallel action, the FCC granted Reflect Orbital a two-year authorization for Earendil-1, declining to use the commun

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In the first federal merits ruling on a state packaging extended producer responsibility (EPR) law, the District of Oregon has upheld the state’s Plastic Pollution and Recycling Modernization Act. The court rejected a challenge from the National Association of Wholesaler-Distributors, which argued the law violated the dormant Commerce Clause and the Due Process Clause by shifting waste-management costs to producers.

This decision is significant for clients operating in the growing number of states with similar EPR laws, including California, Colorado, and Maine. The court found that plaintiffs must show evidence of market-wide burdens or discrimination, not just individual producer compliance costs, to sustain a Commerce Clause challenge. It also validated Oregon’s regulatory model, where a state agency retains ultimate authority over the private producer-run organization that administers the program and sets fees. The ruling offers a potential roadmap for states defending these programs against similar legal challenges.

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France is significantly reinforcing its consumer protection laws, spurred by new EU regulations like the Digital Services Act and the Empowering Consumers Directive. A May 2024 French law now imposes much harsher penalties for misleading commercial practices conducted online, with fines for corporate entities reaching up to €3.75 million and potential prison sentences of up to five years for individuals. This legislative tightening is coupled with a deliberate enforcement strategy by the French Directorate-General for Competition, Consumer Affairs, and Fraud Control (DGCCRF), which is increasing its scrutiny of the digital sector. Counsel should advise clients that regulators are specifically targeting greenwashing, unsubstantiated environmental claims, dark patterns, fake online reviews, and deceptive pricing or promotions. The systematic publication of sanctions—a "name and shame" approach—adds significant reputational risk to the financial and criminal penalties. Businesses with an online presence in France must urgently audit their digital interfaces, marketing claims, influencer

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The US Securities and Exchange Commission has proposed a comprehensive new framework, Regulation Crypto Assets, to create a tailored disclosure and registration exemption regime for offerings of cryptoasset investment contracts. The proposal, which has unanimous support from the commissioners, introduces two new offering pathways: a Startup Exemption for raises up to $5 million and a tiered Fundraising Exemption for raises up to $75 million annually. It also creates a safe harbor for when the investment contract aspect of an asset is deemed to have ceased, potentially allowing the underlying asset to trade as a non-security. For project developers and investors, the rules could provide the first clear, viable path for compliant token offerings in the United States, representing a significant shift from the SEC’s prior enforcement-led approach. If adopted, the rules would also broadly preempt state securities registration requirements for these offerings. The SEC has requested public comment on the proposal, with a deadline of October 20, 2026.

Australia's government has released a consultation draft of the Privacy Amendment (Personal Data Protection) Bill 2026, signaling a significant overhaul of the nation's privacy framework. The proposed reforms would create substantial new compliance obligations for businesses subject to the Privacy Act, aligning Australian law more closely with global standards like the GDPR. Key proposals include a broad new requirement for data processing to be "fair and reasonable," the formal distinction between data controllers and processors, and a strict 72-hour deadline for notifying the regulator of eligible data breaches. The draft also introduces specific consent requirements for "trading" in personal information, which could impact data brokers and ad-tech companies, and expands the definition of sensitive data to include precise geolocation information. Additionally, it would grant individuals a right to have their data deleted by large digital platforms. The proposals are open for consultation until September 18, 2026. Businesses should begin assessing how the changes would affect their

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A law firm analysis of online vendors found widespread promotion of non-FDA-approved drugs using potentially misleading claims and inadequate safety disclosures. The study focused on telehealth platforms and online pharmacies advertising compounded treatments for obesity, erectile dysfunction, and hair loss. Researchers found that vendors often promote novel formulations and multi-drug combinations that have not been evaluated by the FDA for safety or efficacy. Marketers also frequently reference well-known brand-name drugs to suggest their compounded products are equivalent, potentially confusing consumers.

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The FDIC and OCC have proposed significant updates to their regulations governing the disclosure of non-public information, including confidential supervisory information (CSI). If finalized, the new rules would allow regulated banks to share this information with a broader set of third parties—such as affiliates, service providers, outside counsel, and potential merger counterparties—without seeking prior agency approval, a notable departure from current practice. The change is intended to reduce administrative friction and improve the efficiency of supervisory processes and business operations, particularly for bank-fintech partnerships. While the proposals would align the FDIC and OCC more closely with the Federal Reserve Board's approach, material differences would remain. Both proposals require the disclosing institution to enter into a qualifying confidentiality agreement with the recipient, which would make the agency an enforceable third-party beneficiary. Comments on both proposed rules are due by October 5, 2026.

FinCEN has issued a detailed alert calling on banks and other financial institutions to strengthen BSA/AML programs against fraud schemes targeting the Federal Student Aid (FSA) program, which disburses roughly $120 billion annually to about 13 million students. The alert identifies three principal typologies—ghost-student schemes using stolen or synthetic identities, straw-student schemes involving willing participants, and insider-assisted schemes at educational institutions—and notes that fraudsters increasingly use AI chatbots to satisfy enrollment-duration requirements and to launder proceeds through digital assets, money mules, shell companies, and fraudulent accounts. FinCEN provided an enumerated list of red flags, including rapid conversion of FSA refunds into digital assets, multiple unrelated students sharing one account, and clusters of new accounts accessing FSA refunds from a single IP address or device. While the alert states enforcement will not target legitimate businesses whose products are subverted, it makes clear that FinCEN expects affirmative monitoring, SAR fi

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Connecticut Attorney General William Tong, Governor Ned Lamont, and Department of Consumer Protection Commissioner Bryan T. Cafferelli sued Kalshi in state court, seeking an injunction to halt alleged unlicensed online sports wagering offered to Connecticut residents. The action follows a December 2025 cease-and-desist order from the DCP Gaming Division, which had already directed Kalshi and two affiliated sites to stop sports event contracts and advertising to in-state users and to allow fund withdrawals. Kalshi had preemptively sued the state and moved for a preliminary injunction, contending its event contracts are commodity 'swaps' within the CFTC's exclusive jurisdiction. Earlier this month, U.S. District Judge Vernon Oliver denied that motion; Kalshi has appealed to the Second Circuit. The CFTC has separately sued Connecticut and two other states, asserting sole federal authority over the products. Sophisticated fintech, gaming, and consumer-protection counsel should track the Second Circuit's preemption analysis, any parallel state-court rulings, and the operating risk for pre

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On August 18, 2026, the SEC published Regulation Crypto Assets, a sweeping proposal aimed at giving token issuers clearer capital-raising paths and, potentially, an exit ramp from securities oversight. The rule would create two new exemptions from Securities Act registration: a one-time startup exemption (up to $5M over four years, with narrative public disclosures on Form 1-CRYPTO) and a tiered fundraising exemption modeled on Reg A (Tier 1: $20M, unaudited financials; Tier 2: $75M, audited financials and ongoing reporting). Its conceptual centerpiece is a conditional safe harbor allowing an issuer to certify that all essential managerial efforts have been completed or permanently ceased, which, if accepted, would remove the crypto asset from investment-contract status and lift federal registration, reporting, and trading restrictions. The proposal would also preempt state securities registration requirements for offerings and certain secondary transactions, though state antifraud authority would survive. Sophisticated counsel and clients care because the framework materially reshap

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Cantero II, Conti, and Kivett present a clean three-way circuit split on the same question: do state laws requiring national banks to pay interest on residential mortgage escrow accounts significantly interfere with federally authorized banking powers under the Dodd-Frank Section 25(b) standard articulated in Barnett Bank? The Second Circuit, on remand from the Supreme Court's 2024 decision, said yes for New York's 2% mandate; the First and Ninth Circuits said no for comparable Rhode Island and California rules. Cert petitions are pending in Cantero and Kivett, with Conti potentially cycling back as well. In May 2026 the OCC added a regulatory front, issuing a final rule and a preemption determination covering New York and 13 other state laws; the OCC concluded the statutes significantly interfere with national bank discretion over escrow terms. Ten state attorneys general have now sued in Oregon federal district court, arguing the OCC exceeded its authority and failed to satisfy Dodd-Frank's preemption-determination criteria. For major-firm clients, the stakes extend well beyond esc

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On September 1, 2026, the Eleventh Circuit in U.S. ex rel. Zafirov v. Florida Medical Associates LLC reversed a district court ruling that had declared the False Claims Act's qui tam provisions unconstitutional under Article II's Appointments Clause. Applying the two-part test from Edmond v. United States, the panel (Judges Branch and Luck, plus sitting District Judge Moreno) held that relators do not occupy a 'continuing' position because their tenure is case-specific, intermittent, and compensated by a one-time contingent fee rather than a government emolument. The decision aligns the Eleventh Circuit with the Fifth, Sixth, Ninth, and Tenth Circuits, all of which have upheld qui tam against Appointments Clause challenges. Sophisticated FCA counsel should note that the panel did not reach 'significant authority' under prong two and remanded the Take Care and Vesting Clause arguments for the district court to resolve. Healthcare entities and government contractors face no immediate disruption, but defendants with pending constitutional challenges should reassess strategy given the na

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The U.S. Court of Appeals for the Eleventh Circuit reversed a Florida federal district court, upholding the constitutionality of the False Claims Act's (FCA) qui tam provisions. The lower court had invalidated the provisions, which allow private citizen "relators" to sue on behalf of the government, reasoning they were "officers of the United States" who must be appointed by the President under the Appointments Clause. The Eleventh Circuit disagreed, finding relators do not hold a "continuing position" and are therefore not officers.

This decision resolves significant uncertainty for FCA defendants and relators in the Eleventh Circuit and aligns it with four other circuits that have rejected similar constitutional challenges. The FCA is a critical enforcement tool and a source of massive potential liability for government contractors and healthcare providers. A contrary ruling would have disrupted a pillar of federal fraud enforcement.

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US Customs and Border Protection (CBP) has issued an advance notice of proposed rulemaking (ANPRM) signaling a potential shift from document-based compliance to a data-driven, technology-enabled model for supply chain verification. The notice contemplates requiring importers to obtain and potentially submit foreign export documentation, such as declarations and invoices submitted to foreign customs authorities. It also considers replacing the current Manufacturer/Shipper Identification Code (MID) with a more robust system using global business identifiers for all supply chain participants, from producers to packagers.

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California lawmakers have sent SB 690 to Governor Newsom, who has until September 30, 2026 to sign or veto. If enacted, the bill would eliminate private rights of action under Section 638.51 of the California Invasion of Privacy Act (CIPA) for website-based pen register and trap-and-trace claims, while leaving the California Attorney General's enforcement authority intact. The bill is expected to take effect January 1, 2027 and would apply retroactively to claims commenced within the prior two years, potentially disposing of significant pending website-tracking litigation that has produced a wave of demand letters and suits premised on routine cookies, pixels, and analytics. For BigLaw defendants and clients, this directly affects case strategy: pending Section 638.51 matters may face early dispositive options, while Section 631 (interception of content) claims, increasingly asserted against session replay tools, pixels, and chat features, remain live. Counsel should also anticipate plaintiffs layering parallel theories under CIPA Section 631 and the federal Wiretap Act to evade the

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An analysis of UK public takeovers in 2026 reveals a sharp increase in "bear hug" approaches, where bidders make initial proposals public rather than negotiating privately with the target's board. This shift reflects bidders' growing impatience with protracted private talks and their perception of opportunity in the UK's changing investor landscape and discounted company valuations. Sophisticated counsel and their clients must understand this evolving tactical environment. The study identifies three patterns across eleven deals: bidders without a stake who significantly increased their price (a median of 18.5%) were most likely to secure a board recommendation; bidders with a large blocking stake who held firm on price tended to go hostile and remain unresolved; and those in the middle often withdrew. When advising a potential acquirer or a target board, counsel should assess the bidder's stake and its flexibility on price to anticipate the trajectory and outcome of a public approach.

Citing the Supreme Court's 2023 decision in SFFA v. Harvard, the IRS has issued proposed regulations that would deny 501(c)(3) tax-exempt status to any private school with policies that discriminate based on race, color, or national origin. The proposed rule's prohibition is absolute, applying broadly to admissions, scholarships, athletics, and other school-administered programs, and it explicitly invalidates policies intended to promote diversity or serve remedial objectives. This forces a significant operational and legal review for many private primary schools, colleges, and universities that currently consider race in their programs. The proposal would also modify the long-standing Revenue Procedure 75-50 to eliminate language permitting policies that favor racial minority groups. The regulations are scheduled to apply to taxable years beginning after May 31, 2027. Counsel for educational institutions should note the November 3, 2026, deadline for public comments and monitor for inevitable legal challenges once the regulations are finalized. Open questions remain around enforceme

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The U.S. Court of Appeals for the Seventh Circuit revived a proposed class action alleging Chobani LLC deceptively markets its 'Chobani Zero Sugar Yogurt.' The court reversed a lower-court dismissal, holding that the sweetener allulose is unambiguously a 'sugar' under controlling federal food labeling regulations. This finding was critical because it meant the plaintiffs' state-law consumer protection claims were not preempted by the Federal Food, Drug, and Cosmetic Act.

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The UK government has announced its intention to give the Bank of England a new statutory objective to support innovation in payments systems. The measure, which will be introduced as an amendment to the Financial Services and Markets Bill, formalizes the government's push to modernize the UK's payments landscape and create a supportive environment for new technologies like systemic stablecoins.

For financial services firms and fintech innovators, this signals continued high-level support for the sector's growth. However, the new objective will be explicitly secondary to the Bank's primary mandate of protecting and enhancing financial stability. The Bank will not be required to support initiatives that could undermine systemic integrity. This extends an approach already applied to the Bank's regulation of central counterparties and securities depositories. Counsel should monitor the upcoming debates on the Bill in the House of Lords to see the precise scope and wording of the Bank's new remit and how it may influence ongoing work on new retail payments infrastructure and stablecoin

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In a significant policy memorandum, GC 26-04, National Labor Relations Board General Counsel Crystal S. Carey has identified more than a dozen major Biden-era precedents that she will ask the full Board to overrule. The memo signals a substantial shift toward a more employer-friendly interpretation of federal labor law and serves as a roadmap for the GC's enforcement priorities and for regional office litigation strategy.

Major-firm clients care because the targeted precedents have broad operational impacts. Key decisions slated for reversal include the Cemex framework, which altered union recognition standards; the Amazon.com Services ban on mandatory "captive-audience" meetings; the Stericycle standard for evaluating facially neutral work rules; and the McLaren Macomb holding on severance agreement clauses. The memo also targets expanded views on protected concerted activity (Lion Elastomers) and enhanced remedies for unfair labor practices (Thryv, Inc.).

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A series of significant labor reforms in Mexico reflects a growing legislative focus on employee well-being, creating new compliance challenges for employers. The trend, catalyzed by the 2018 standard on psychosocial risks (NOM-035), includes several major changes. The Dignified Vacation Reform, effective in 2023, doubled the minimum first-year vacation entitlement to twelve days. Other key developments include comprehensive remote work regulations and the official classification of mental health disorders like stress and anxiety as occupational diseases, which has social security implications. Furthermore, the “Chair Law” now mandates seating for employees who stand for long periods, and a gradual reduction of the standard workweek to 40 hours is set to be completed by 2030. Counsel for clients with Mexican operations must advise on updating policies covering leave, work hours, and health and safety to mitigate risks and ensure compliance with the evolving framework, which increasingly prioritizes work-life balance and mental health.

On August 27, 2026, the OCC and FDIC jointly finalized a rule that defines an unsafe or unsound practice as conduct contrary to prudent operation that has materially harmed, or is likely to materially harm, a bank's financial condition or pose a material risk of loss to the Deposit Insurance Fund. The rule also sets a binding framework for MRAs: examiners may issue one when an imprudent practice has caused or could reasonably be expected to cause material financial harm, but speculative concerns no longer suffice. MRAs based on legal violations must involve substantive, systemic, or patterned conduct, not mere technical infractions, and examiners must tailor findings to a bank's size, complexity, and risk profile, with a higher bar for treating harm as material at community banks. The OCC simultaneously revised its enforcement and MRA procedure manuals (PPM 5310-3 and PPM 5400-11) and issued a separate notice of proposed rulemaking distinguishing substantive from technical violations. The final rule excludes institution-affiliated parties, leaving individual enforcement under prior s

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The Eleventh Circuit's September 1 decision in United States ex rel. Zafirov v. Florida Medical Associates, LLC rejected an Appointments Clause challenge to the False Claims Act's qui tam provisions, aligning the Eleventh Circuit with the Fifth, Sixth, Ninth, and Tenth Circuits and eliminating any near-term circuit split that might have drawn Supreme Court review. Applying the Lucia v. SEC framework, the panel reasoned that relators lack the hallmarks of federal office: their tenure is temporary and case-specific, compensation is a one-time contingent share rather than continuing emolument, and duties are personal and non-transferable. Because the court resolved the appeal solely on the continuing-position prong, it did not decide whether relators exercise significant federal authority. The panel vacated the district court's dismissal and remanded for first-instance review of the defendants' Take Care Clause and Vesting Clause theories, both of which attack presidential supervision over relators pursuing FCA actions in the government's name. Sophisticated FCA defendants, relators, he

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The landscape for high-stakes class actions over website tracking technologies is shifting in California. The state legislature on August 28 passed SB 690, which would eliminate the private right of action under the California Invasion of Privacy Act’s (CIPA) “pen register” and “trap and trace” provisions, leaving enforcement solely to the Attorney General. The bill, which awaits the governor's signature, would apply retroactively and could end numerous pending lawsuits.

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A practitioner playbook for a recurring NAV-financing issue: a fund's shareholder loan sits alongside the NAV lender's share security over a German HoldCo. Two enforcement architectures are compared. An intercreditor agreement (ICA) keeps the shareholder loan outstanding but contractually subordinates, blocks and turnsovers recoveries to the NAV lender. A deed of release (DoR) leaves the loan in place until a defined enforcement trigger, then extinguishes it, potentially as a contribution to equity. The German overlay is decisive. Section 39 InsO subordinates shareholder loans in formal insolvency but does not stop pre-insolvency value leakage, so contractual solutions are needed during the life of the facility. Section 135 InsO can unwind repayments of shareholder loans in the look-back period. A DoR must be drafted so the release is automatic under section 397 BGB without post-default shareholder cooperation, and structured to avoid recharacterization as a repayment subject to avoidance. Tax is the other pivot: the release can produce a taxable waiver gain at the HoldCo, and sectio

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The California Air Resources Board (CARB) released new guidance and a voluntary digital platform for corporate greenhouse-gas emissions reporting under the Climate Corporate Data Accountability Act (SB 253). The guidance clarifies expectations for the inaugural reports, which CARB anticipates will be due November 10, 2026, pending final regulatory approval.

Sophisticated counsel should note CARB's stated enforcement discretion for this first reporting cycle. Companies that were not already collecting Scope 1 and 2 emissions data as of December 5, 2024, may submit a "statement of non-reporting" on company letterhead in lieu of a data report. For entities that do report, submissions will be accepted for the 2026 cycle even without the limited assurance the law otherwise requires. CARB is also encouraging, but not requiring, detailed disclosure of methodologies and data sources. The new online platform is designed to streamline submissions and fee collection. Covered entities should prepare to use the platform to submit either their emissions data or a non-reporting statement by the ex

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The House Financial Services Committee has introduced H.R. 10184, a bill that proposes a significant overhaul of the Consumer Financial Protection Bureau. The legislation, unveiled by committee leadership during a roundtable with industry representatives, seeks to increase the agency's accountability and provide clearer rules for financial institutions. Key provisions would subject the CFPB to the congressional appropriations process, removing its independent funding through the Federal Reserve, and would compel the agency to conduct a formal rulemaking to define 'abusive' acts and practices under the UDAAP standard. The bill also aims to create a clearer distinction between nonbinding agency guidance and legally enforceable requirements, reform aspects of bank and nonbank supervision, and modify civil penalty calculations. For counsel and clients in the financial services industry, this legislation represents a major potential shift in the regulatory landscape, promising greater predictability but also introducing new legislative and oversight dynamics. The bill's progression throug

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The Securities and Exchange Commission has proposed rescinding Rule 206(4)-5, commonly known as the 'pay-to-play' rule for investment advisers. The current rule prohibits an investment adviser from providing compensated advisory services to a government client for two years after the firm or certain employees make a political contribution to an elected official or candidate in a position to influence the selection of the adviser.

Sophisticated counsel and their investment-adviser clients care because the rule significantly constrains the political contribution activities of firms and their personnel, particularly those managing or seeking to manage public pension funds and other government accounts. Eliminating the rule would remove a major compliance hurdle and could alter the competitive landscape for securing government advisory business. The proposal marks a potential reversal of a key post-financial crisis reform aimed at preventing corruption. The next step is the public comment period, after which the SEC may decide whether to adopt a final rule.

A recently unsealed False Claims Act complaint in Maryland federal court signals a new front in Paycheck Protection Program enforcement, targeting over 70 established, tax-exempt organizations. The qui tam suit alleges various non-profits—including trade associations, social clubs, and fraternal orders—fraudulently obtained PPP loans by falsely certifying their eligibility. The complaint's core legal theories have national implications, arguing that many organizations applied before Congress expanded eligibility to their specific 501(c) category, that certain "private clubs" with selective membership were always ineligible under SBA rules, and that an invalid first-draw loan taints any subsequent second-draw loan. For sophisticated counsel, this case underscores that SBA loan forgiveness does not preclude FCA liability, which carries penalties of treble damages plus fines. It serves as a stark warning for legitimate non-profits nationwide that may have misunderstood the hastily drafted rules. All non-profits that received PPP funds should now re-evaluate their eligibility at the time

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In 'Diegelmann v. Bessent', the D.C. Circuit upheld the Treasury Department’s designation of German precious-metals traders for operating in Russia's metals and mining sector. The court endorsed a broad interpretation of sanctions authority under Executive Order 14024, finding that simply purchasing refined precious metals constitutes “procuring” materials from the sector. This means companies can be sanctioned for operating in a targeted Russian industry without being involved in upstream activities like extraction or processing.

The decision expands sanctions risk to a wide range of downstream actors, including traders, brokers, manufacturers, and financial institutions, even if their activities occur entirely outside of Russia. The court upheld the designation based on a classified administrative record and affirmed that while the Supreme Court’s 'Loper Bright' decision eliminated statutory deference, OFAC’s national-security determinations still receive “extremely deferential” arbitrary-and-capricious review.

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The UK Court of Appeal's decision in Geeks Ltd v Watts holds that training-cost repayment provisions, also known as clawbacks, may be challenged as an unlawful restraint of trade. Previously, these common employment-contract clauses were typically analyzed only as potentially unenforceable penalty clauses. The court explicitly rejected the idea that a financial disincentive is immune from restraint-of-trade analysis simply because it does not constitute an outright prohibition on competition.

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Chile's Congress has approved a law, largely upheld by its Constitutional Court, creating a tax stability regime to attract foreign direct investment. The law permits foreign investors committing at least $50 million to projects in specified sectors—including mining, energy, infrastructure, and technology—to enter into investment contracts with the state. These contracts can guarantee the investor's total effective income tax burden for a period of 10 to 20 years, depending on the size of the investment, providing significant fiscal certainty for large-scale, long-term projects.

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The European Banking Authority (EBA) has published a consultation on draft Regulatory Technical Standards (RTS) for operational risk management frameworks, fulfilling a mandate under the Capital Requirements Regulation (CRR). The proposed standards aim to create a harmonized minimum framework for all CRR-regulated institutions, focusing on governance, process, and systems.

For sophisticated counsel and their financial-institution clients, these draft rules are significant as they clarify the management body’s responsibilities for the risk framework and appetite. They also set minimum expectations for risk identification processes and establish requirements for data collection, analysis, and stress testing to support risk management. The standards will apply to all CRR firms, although proportionality considerations will ease the data collection burden for smaller institutions with a business indicator below EUR 750 million. The draft outlines specific expectations for internal reporting, compliance, validation, and audit functions to ensure timely and accurate data flows to senior ma

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The U.S. Court of Appeals for the Eleventh Circuit reversed a district court ruling that the False Claims Act's (FCA) qui tam provisions are unconstitutional, but did so on narrow grounds that leave larger questions unresolved. The lower court in U.S. ex rel. Zafirov v. Florida Medical Associates had found that private relators are "officers" of the United States who are not properly appointed under Article II's Appointments Clause. The Eleventh Circuit disagreed, holding that a relator's role is temporary for a single case and not a "continuing position." This decision is significant as the first appellate ruling on the topic since several Supreme Court justices expressed interest in reviewing the constitutionality of the FCA's citizen-suit framework. By declining to address separate, potent challenges under the Take Care and Vesting Clauses, the court leaves the door open for future attacks on the qui tam regime. The case was remanded for consideration of these other constitutional issues, and similar challenges are pending in other circuits, suggesting the matter is likely headed

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The Federal Reserve Board (FRB) has issued a notice of proposed rulemaking to amend Regulation O, which governs lending by member banks to their insiders. The proposal directly addresses a long-standing issue where large, passive investment fund complexes, through their diversified holdings, become unintentional "principal shareholders" (owning 10% or more) of banks. Under the current rule, this status can severely restrict the bank from lending to any other portfolio company held by the same fund complex, creating significant business challenges. The FRB's proposal would create a permanent exception for "qualified fund complexes" that satisfy four key passivity conditions, replacing a series of temporary no-action relief letters in place since 2019. The change is critical for both the asset management and banking industries, as it would provide a clear regulatory framework and remove legal uncertainty. Counsel should monitor the comment period, which ends October 5, 2026, as loss of qualified status under the proposed rule would carry significant consequences.

The U.S. Court of Appeals for the 11th Circuit has reversed a district court’s finding that the False Claims Act’s (FCA) qui tam provision is unconstitutional. In United States ex rel. Zafirov v. Florida Medical Associates, LLC, the appellate panel held that whistleblowers, or relators, who sue on behalf of the government are not “officers of the United States” subject to the Appointments Clause of Article II of the Constitution. The court reasoned that a relator’s role is temporary and case-specific, not a “continuing position” that would require presidential appointment.

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