DROPLETS

The SEC has formally proposed rescinding Rule 206(4)-5 of the Investment Advisers Act, the so‑called pay‑to‑play rule that bars advisers from taking government‑entity compensation for two years after a covered associate makes a contribution to an official. The rule was criticized for its strict liability standard, narrow de‑minimis thresholds, and broad definition of "official," forcing many firms to shut down political giving.

Re‑rescission would not legalize political contributions, but it would remove the bright‑line ban and shift the burden back to advisers' own fiduciary and anti‑fraud duties. Firms should therefore keep existing programs in place while the proposal is pending, carefully evaluate which controls can be trimmed, and develop internal policies that address the more nuanced "quid pro quo" considerations the SEC cites.

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Executive Order 14421, issued by the Biden administration, directs the Department of Energy (DOE) to assess the risk posed by foreign, specifically Chinese‑made, equipment on the bulk‑power transmission grid. In a forthcoming rule‑making proceeding, the DOE could prohibit the use of such equipment altogether, impacting thousands of miles of grid infrastructure and the capital projects that rely on it. For owners, operators, lenders, and builders of electric transmission systems, the rule represents a drastic shift that could render existing investments obsolete, delay planned expansions, and increase project costs. Counsel should advise clients to inventory Chinese‑equipment components, evaluate supply‑chain vulnerabilities, and consider alternative vendors while monitoring the DOE’s final rule. The policy will have cross‑client implications for any major utility or energy‑infrastructure developer and could reshape funding, procurement, and regulatory compliance strategies across the U.S. energy sector.

Pennsylvania’s new Artificial Intelligence Deceptive Advertising Act, effective October 1, 2026, requires any ad that includes AI‑generated or AI‑modified imagery, text, or audio to provide a clear, conspicuous disclosure indicating the use of AI. Failure to comply can result in civil penalties up to $10,000 per violation and injunctive relief. The act applies broadly to all commercial advertising—online, print, broadcast, and social media—making the rule highly relevant for companies across industries that employ machine‑learning tools to craft messaging. Firms must update creative workflows, train design and marketing teams, and incorporate legal review into ad approval processes. Clients utilizing AI platforms should examine whether existing copy‑editing and disclosure tools integrate AI flags and consider adjusting SOPs to capture AI‑derived elements. Watch for forthcoming guidance from the Pennsylvania Attorney General’s office, which may clarify the definition of “conspicuous” and outline compliance requirements for digital advertising metrics. Early adoption of compliance prot

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In Vetter v. Resnik, the Fifth Circuit held on January 12, 2026 that terminating a 1963 worldwide assignment under Section 304(c) recaptured the grant's foreign rights, rejecting the music industry's long-standing assumption that termination affects only U.S. rights. On October 19, 2026, with four Justices recused, the Supreme Court affirmed the judgment under 28 U.S.C. Section 2109 as if by an equally divided court, so no Supreme Court precedent was set and the opinion binds only federal courts in Louisiana, Mississippi and Texas.

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According to a Husch Blackwell alert, the Department of Labor has finalized regulations requiring pharmacy benefit managers (PBMs) and certain affiliated service providers to make expanded compensation disclosures to fiduciaries of large, self-insured Employee Retirement Income Security Act plans. The rules place PBM payment practices squarely inside the ERISA fiduciary information framework, extending the disclosure obligations that plan committees rely on when judging whether pharmacy pricing is reasonable and managed prudently.

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The DOJ and HHS have launched a six-month False Claims Act Self-Disclosure Pilot Program, reported to remain open through April 22, 2027, under which eligible health care organizations that voluntarily disclose potential civil FCA violations may receive reduced damages and favorable settlement terms. Program specifics beyond eligibility and the availability of mitigation are not set out in the available reporting, so the damages-reduction mechanics, any monetary cap, and conditions such as government approval or credit for cooperation remain unconfirmed.

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On 28 October 2026 the Chancellor delivered the UK Autumn Budget 2026, and a DLA Piper analysis of the package highlights the changes to indirect tax as the point of interest for corporate clients. Indirect taxes — principally VAT — bite at the point of sale and along supply chains, so scope, rate and timing changes flow through to pricing models, margin structures, cross-border supply arrangements and, in regulated sectors, to the tax treatment of customer-facing revenue.

Because a Budget is a statement of intent, the operative detail for advisers sits in the accompanying legislation, regulations and any consultations: commencement dates, transitional relief, rules for contracts and orders spanning the change, and any exemptions or relief schemes. Sophisticated counsel should map the announced indirect tax measures against each client's own VAT profile rather than assume a uniform impact, and sequence that work ahead of the implementation timetable instead of waiting for legislation to be introduced.

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On October 26, the U.S. Court of Appeals for the Eighth Circuit affirmed a district court decision vacating the Federal Reserve's 21-cent per-transaction cap on debit card interchange fees under Regulation II. The appellate panel's stated reasoning concerns the Durbin Amendment, the statutory provision the Fed used to define which issuers fall within the cap; the available report is truncated and does not set out the panel's full analysis, so the precise scope of the holding — including anything remanded for further proceedings and the treatment of covered issuers generally — should be confirmed against the opinion itself.

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Per a single law-firm alert (Latham & Watkins, 30 October 2026), the SEC's Division of Examinations has issued its examination priorities for 2027. As described, the roadmap is largely a continuation of previously established themes rather than a wholesale reset, but it adds or increases emphasis on areas such as economic conflicts and foreign omnibus accounts.

Why sophisticated counsel should care: SEC examination priorities are the de facto supervisory agenda for broker-dealers, investment advisers, registered investment companies and other registrants, and they shape the questions examiners are expected to ask. They also serve as a forward-looking indicator of rulemaking and enforcement emphasis, because examination findings frequently precede enforcement referrals and drive remediation programmes. Continuing themes mean issues clients may have deprioritised after the last cycle — for example, conflicts-related incentive structures or handling of non-US omnibus arrangements — remain live inspection risks rather than closed ones.

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Governor Newsom signed SB 947, the "No Robo Bosses Act," on September 30, 2026, adding Part 5.5.5 to the California Labor Code. Effective July 1, 2027, employers — including public entities and labor contractors — may not rely "solely" on an automated decision system (ADS) for disciplinary or termination decisions, and where an employer "primarily relies" on ADS output it must direct a human to corroborate the result using the same underlying data or other supporting information. Employers that primarily rely on an ADS must also deliver a plain-language, stand-alone written "postuse" notice and, on employee request, a meaningful, objective description of the employee's own data. Enforcement runs through the Labor Commissioner and public prosecutors, with $500 civil penalties per violation; because the statute sits in the Labor Code, employees may also seek to enforce it through PAGA. There is no standalone private right of action. Coverage reaches productivity scoring, attendance analytics and performance trackers, not only generative AI, while excluding spam filters, firewalls, iden

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Littler's Workplace Policy Institute reports that the EEOC voted this week to revoke its 2012 enforcement guidance, which was intended to discourage employers from considering prospective employees' arrest and conviction records, with the rescission stated to be effective immediately. That reverses a fifteen-year-old enforcement position and reopens a compliance question that has driven hiring litigation and settlements: whether criminal-record screening is applied in ways that disproportionately exclude protected groups. Employers using criminal-record screening, contingent staffing vendors and background-check providers would ordinarily revisit job criteria, notice-and-explanation practices, and disparate-impact testing documentation — although Littler's summary does not set out the rescinded text, the vote, or any litigation posture, so the precise scope of the change is unconfirmed in the available material.

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ONC released the HTI-5 final rule on Oct. 26, 2026, titled "Health Data, Technology, and Interoperability: ONC Deregulatory Actions to Unleash Prosperity." As summarized in the source, the rule narrows the scope of health IT certification requirements and defers changes to information blocking rules; HHS also issued an associated cost estimate.

Why sophisticated counsel should care: information blocking and certified-health-IT obligations have anchored multi-year compliance programs at hospitals, health data platforms, and their technology vendors. A narrowed certification regime plus deferred information blocking changes can alter whether and when a client is subject to particular obligations, touching regulatory exposure for data-access disputes, vendor remediation and indemnity allocation, and the disclosure posture of health data exchange arrangements. The action also arrives while state health data privacy statutes and state-level information blocking rules remain unaffected, so the federal deregulatory shift does not close state-law gaps.

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The FTC, joined by 20 state attorneys general, sued Dollar General alleging the retailer charged customers more at the register than the prices displayed on shelves, price tags and in advertisements, according to a client alert summarizing the filing. As described, the theory is deception rooted in point-of-sale discrepancies between advertised and charged prices, not a claim that advertised prices were themselves unreasonably low; the dispute therefore turns on signage, labeling and disclosure rather than on pricing levels.

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What happened: On October 21, 2026, the Office of the Comptroller of the Currency issued Bulletin 2026-50 announcing a final rule implementing the GENIUS Act. The single available report says the rule covers most of what the statute requires and addresses two pillars for OCC-supervised stablecoin issuers: the scope of permitted issuer activities and a prohibition on paying yield to holders. The rule is stated to take effect January 18, 2027.

Why counsel and clients care: stablecoin issuance now has a federally defined perimeter for what issuers may do and what economics they may offer, and the yield prohibition reaches product design, reserve and investment policy, and the terms banks can pitch to customers. Issuers and their bank partners should treat January 2027 as a hard program deadline: AML and sanctions controls, custody and reserve arrangements, vendor contracts, marketing and disclosure, and product governance all need review against the final text. The compressed date also strains issuers operating under interim or state-level regimes.

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Treasury has proposed a sweeping expansion of the outbound investment rules administered under the COINS Act, extending prohibitions to a broader set of investments in semiconductors and "super intelligence" (SI) systems and adding new prohibitions on biotechnology investments. The proposal builds on Treasury's existing outbound investment framework, which already requires analysis of certain transactions involving semiconductors, quantum information, and AI in light of covered national-security technologies and foreign-person-of-concern considerations.

Why sophisticated counsel should care: outbound investment screening has become a standing diligence and structuring item for private equity sponsors, corporate development teams, and institutional investors. A wider set of covered technologies plus a new biotechnology prohibition would expand the universe of deals requiring national-security review, affecting valuation, JV and co-investment structures, syndication decisions, and whether a transaction can proceed without a mitigation protocol or CFIUS-adjacent workaround.

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Between October 13 and 19, 2026, MOFCOM issued a package that materially tightens China's export control regime. Announcement No. 48, with MOST, proposes adding 40 technology control parameters (23 AI, five biomedicine, 12 photovoltaic) to the Catalogue of Technologies Prohibited or Restricted from Export, comments due November 15, 2026, and already requires exporters to register exports of the listed technologies pending the revised Catalogue. Restricted AI parameters reach large models trained on "important data," core model elements above stated compute and parameter thresholds, AI agent and chip design technologies, and cluster interconnect technologies above 10,000 accelerators; prohibited parameters cover models trained on "core data." Announcements Nos. 49-51 revise dual-use controls on UAVs (endurance threshold raised from one to three hours), tunnel boring machines and dredgers, effective November 18, 2026, and draft civil aviation measures would replace individual licensing with a 60-day "export certificate." Announcement No. 52 creates a MOFCOM referral role, 15-plus-15 wo

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In a unanimous opinion, a three-judge Ninth Circuit panel held that California's 2024 ban on mandatory "captive-audience" meetings violates the First Amendment. The court reasoned that the statute regulates speech based on content — it applies or not depending on what the employer says — so strict scrutiny applies; California's only substantial interest, protecting captive employees from unwelcome messages, was not supported by precedent, which has permitted such regulation only in governmental settings. The opinion rested on the First Amendment ground rather than the trade-association plaintiffs' National Labor Relations Act preemption theory.

The consequences are immediate for a broad client set. California cannot enforce its ban, and the opinion's logic appears to reach the four other Ninth Circuit states with functionally identical statutes — Oregon, Hawaii, Alaska and Washington — which the source assesses as likely unenforceable. Employers may resume mandatory labor-speech meetings in those states.

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On October 23, 2026, the SEC Division of Examinations published its Fiscal Year 2027 examination priorities, signaling where examiners will concentrate review resources in the coming year. For registered investment advisers, the Division maintains its focus on fiduciary duty, economic conflicts of interest and compliance-program effectiveness, with particular attention to advisers recommending illiquid or complex products (private credit, BDC loans, option-based and inverse ETFs) and to firms that recently merged, changed business models or run dispersed branch offices. Registered investment companies face scrutiny on fees and waivers, valuation and redemption practices in funds holding private credit, and leveraged fund structures. Broker-dealer exams will emphasize the Net Capital and Customer Protection Rules, extended-hours trading and liquidity, and Regulation Best Interest, including Form CRS content. Two elements are comparatively new: a cross-reference to the SEC Cross-Border Task Force's work on pump-and-dump and ramp-and-dump activity in foreign-based securities within AML

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Under 10 U.S.C. § 4663, the Department of War (DOW) is prohibited from contracting with a company, or with its parent or subsidiaries, if that company is party to a contract with a "covered lobbyist." Skadden reports that Alibaba has obtained an injunction against the department's application of that prohibition, though the source does not identify the court, the date of the ruling, or the reasoning, so the scope of the relief is not established from this material. The injunction appears to be company-specific: the covered-lobbyist contracting ban otherwise remains in force against contractors for now. For clients, the practical significance is a possible asymmetry in enforcement — exposure now turns on which contracting entity is at issue and on the state of the underlying lobbying registrations rather than on the ban itself. Government contractors, entities holding Lobbying Disclosure Act registrations, and companies with China-facing operations should reassess their own covered-lobbyist determinations rather than treat the ruling as a general safe harbor. Watch for the docket and

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On October 26, the U.S. Court of Appeals for the Eighth Circuit vacated a federal district court’s judgment that had affirmed the Federal Reserve Board’s 21‑cent cap on debit‑card interchange fees. The decision means the cap no longer applies within the circuit’s 15 states, effectively removing a federally mandated ceiling for interchange fees on debit‑card transactions. Banks that previously constrained fee amounts to comply with the Fed’s regulation may now adjust pricing, and merchants could see higher fees passed through the network. For counsel, the ruling underscores the need to monitor how this change might influence fee structures, contract bargaining, and potential litigation over fee disputes. The next pivotal development will be whether other circuits follow suit or the Fed revises policy to restore the cap, as actors in the payment ecosystem weigh cost and regulatory ramifications.

The proclamation, issued under the U.S. Trade-Deficiency Act, imposes import prohibitions on a range of high-technology robotics and industrial machinery, including some parts and components. While the full scope—including which specific models, parts, or countries are affected—has not yet been released, the move signals a broader effort to curb the transfer of strategic technologies to competitors. The ban is effective immediately upon publication, requiring importers and customs brokers to review existing invoices, licenses, and certifications against the new list. Firms that rely on manufacturing or shipping of robotics components should promptly conduct due-diligence on shipments, secure any necessary permits, and monitor further guidance from the Department of Commerce. Ongoing compliance will involve updating internal import-risk assessment tools, alerting supply-chain partners, and tracking any subsequent revisions issued by the administration.

The U.S. Court of Appeals for the Eighth Circuit upheld a lower‑court ruling that declared the Federal Reserve’s attempt to cap debit‑card interchange fees under the Durbin Amendment unconstitutional or contrary to its statutory authority. The decision re‑establishes the status quo: banks may set interchange rates that merchants have long opposed, potentially increasing the cost for merchants but also reinforcing banks’ fee‑setting discretion. For counsel representing banks, the ruling signals a need to reassess fee‑cap proposals and adjust risk documents; for merchants, the outcome temporarily preserves their bargaining power but also raises uncertainty about future regulatory changes. The case underscores that federal regulatory actions on settlement fees still face institutional checks, and parties should monitor any legislative scrutiny of the Durbin Amendment or similar fee‑cap proposals. While the ruling applies to the Seventh and Eighth Circuits, it may influence nationwide interpretations of regulatory reach, prompting firms to adjust contract language and client advisori

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Canada’s Global Affairs Department has unveiled comprehensive guidance on how deemed ownership is assessed within the country’s economic sanctions framework. The memo clarifies that corporate entities, shell companies, and dual-structured arrangements are treated as owning interests in the same manner as the sanctioned parties, and it outlines specific thresholds and documentation requirements. The guidance also details procedural steps for compliance teams, including record‑keeping obligations and reporting deadlines, to avoid inadvertent violations. Firms exposed to international trade, especially those with Canadian subsidiaries or partners, should review their ownership structures promptly. The new rules reinforce Canada’s commitment to the UN sanctions regime and could affect cross‑border transactions and supply chain arrangements, making early action critical for mitigating legal and reputational risk. Legal advisors should also monitor for potential updates from the Office of the Superintendent of Financial Institutions.

In late October, France’s ANTAQ announced a public consultation and hearing on proposed revisions to the country’s regulations governing circularization, blocking, and chartering of vessels engaged in cabotage and offshore support navigation. The consultation seeks feedback on how best to regulate the chartering of ships that operate on domestic routes (cabotage) and those supplying offshore facilities, while balancing maritime safety, competitive neutrality, and environmental stewardship. Shipping operators, insurers, and logistics firms across Europe will need to reassess the licensing and compliance obligations that the new rules might impose, especially for vessels that cross national boundaries or provide services to offshore oil, gas, and renewable projects. Firms should monitor the consultation deadlines, submit formal comments if they have a statutory interest, and update their risk assessment frameworks to anticipate potential shifts in licensing costs, routing restrictions, and environmental compliance requirements under the revised regime.

On Aug. 26, 2026, the U.S. Equal Employment Opportunity Commission (EEOC) adopted a new Strategic Plan covering fiscal years 2026‑2030. The plan outlines the agency’s priorities for anti‑discrimination enforcement, including a renewed focus on pay equity, anti‑harassment, and bias‑free hiring practices. It also signals a greater emphasis on data‑driven outreach to industry sectors historically under‑represented in EEOC investigations. For lawyers, the updated strategy means significant shifts in the type and volume of allegations the EEOC is likely to prosecute. Firms advising clients on potential claims should anticipate a stricter scrutiny of disparate impact defenses and an accelerated litigation timeline. In addition, the plan calls for expanded cooperation between private litigants and the EEOC, which could enable joint investigations and shared discovery. Corporations and C‑suite counsel should review their internal compliance programs and consider aligning them with the EEOC’s stated priorities to mitigate exposure and potential liability. Firms may need to update client brief

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The SEC's Office of Municipal Securities published a Statement on September 16, 2026 (on non-solicitor municipal advisors' role in disclosure) explaining when a municipal advisor's participation in drafting, reviewing or editing a municipal securities disclosure document triggers federal antifraud liability under Securities Act Section 17(a) and Exchange Act Section 10(b) and Rule 10b-5. Liability can attach even if the advisor never agreed in writing to advise on the document and even where the misstatement came from language supplied by the issuer, provided the advisor knew or in the exercise of care should have known of it. Duties turn on role and circumstances, not label: OMS flags possible Section 15B fiduciary and MSRB Rules G-17 and G-42 duty-of-care exposure where the advisor agrees to prepare the document, actually assists with it, or routinely participates, creating an expectation of continued participation. Although non-binding, the Statement offers a compliance menu — engagement letters specifying exactly which documents and in which capacity (provider, drafter, reviewer,

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The pilot, announced October 22, 2026 by the DOJ Civil Division and HHS, establishes a dedicated six-month channel for healthcare entities to self-disclose False Claims Act violations outside the standard qui tam referral process, with what the announcement describes as added incentives for qualifying submitters. Medicare- and Medicaid-facing organizations — hospitals, physician groups, home health and durable medical equipment suppliers, managed care plans and drug manufacturers — sit squarely in the audience, alongside the compliance, reimbursement and white-collar defense teams advising them.

The value is timing. Self-disclosure, where it qualifies, can cut off damages exposure and relator claims, but that calculus normally requires months of internal investigation and negotiation; the pilot compresses it into a window that closes quickly. The hard six-month sunset also means silence is a strategic choice, because a disclosure that misses the pilot window may have to be made on ordinary FCA terms.

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The FTC and twenty state attorneys general filed suit against Dollar General on October 26, alleging violations of Section 5 of the FTC Act and of GLBA Sections 521-522 (15 U.S.C. §§ 6801-6802) — the privacy and safeguard provisions Congress enacted for financial institutions. As reported by Hogan Lovells via JD Supra, this is the FTC's latest attempt to extend GLBA's data-protection requirements to a non-financial company; the available source does not set out the specific misrepresentations or security failures alleged, so the underlying conduct should be confirmed from the complaint itself.

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Jones Day reports that the U.S. Department of Justice and the Department of Health and Human Services have launched a False Claims Act self-disclosure pilot program for the health care sector. Only the alert's headline and date are available in the source material; the mechanics — eligible entities, what disclosure earns credit, whether the usual FCA penalty and exclusion analysis changes, and how the pilot interacts with existing voluntary disclosure protocols — are not established here and should be confirmed against the agencies' own announcement.

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On October 27, twenty states and the District of Columbia filed suit against the U.S. Department of the Treasury and the Financial Crimes Enforcement Network, challenging FinCEN's rules that sharply narrow beneficial ownership reporting under the Corporate Transparency Act. The complaint targets the exemptions that limit reporting for many domestic entities and for entities formed or registered in the United States, which FinCEN framed as reducing compliance burdens and protecting sensitive information.

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In late October, the newly created Texas Business Court delivered its first set of trial opinions, marking a significant evolution in the state's approach to commercial litigation. Judge rulings revealed a power‑shi­eking focus on efficiency, streamlined discovery, and clear procedural guidelines tailored for business‑centric disputes. These early decisions suggest a judicial preference for swift, technology‑enabled proceedings and a willingness to adopt novel dispute‑resolution methodologies. Clients with business litigation exposure—especially those in mergers, contract enforcements, and shareholder disputes—should monitor how these emerging rules affect case strategy, evidence handling, and anticipated timelines. Firms may need to adjust their litigation staffing models and counsel clients about evolving discovery standards. The next milestone will be the Court’s first appellate decisions, which could either solidify or modify these preliminary rules. Staying ahead of these developments will help counsel advise clients on timing, jurisdictional selection, and procedural best pract

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On October 21, 2026, the Office of the Comptroller of the Currency issued a final rule implementing the GENIUS Act for entities subject to OCC jurisdiction. The rule is the first detailed supervisory framework for payment stablecoin issuance by OCC-supervised institutions, converting a statutory mandate into operational requirements for banks and other entities the OCC supervises. The reporting confirms the rule's date, statutory basis, and jurisdictional scope but does not set out substantive provisions; reserve, capital, disclosure, custody, redemption, and transition requirements should be read from the rule text and the accompanying supervisory framework, and client advisories will likely summarize them in more detail.

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Per a Skadden client alert, the Office of the Comptroller of the Currency issued a final rule on October 21, 2026 implementing the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act for payment stablecoin issuers subject to OCC supervision. The alert is the only source in this cluster, and its published text was truncated before setting out the rule's operative requirements, so the specific eligibility criteria, reserve and disclosure provisions, application mechanics, and effective or compliance dates cannot be confirmed from the available evidence.

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