Boards Face Heightened Scrutiny From SEC, State Regulators
A new law firm guide advises public companies on a complex risk environment, highlighting a new SEC financial reporting enforcement unit, aggressive state attorneys general, and fragmented state-level AI laws.
A Skadden client briefing outlines a converging set of risks for public company boards, demanding heightened oversight. The guide points to the SEC's creation of a new, consolidated enforcement unit dedicated to financial reporting, which is expected to pursue more numerous and complex investigations. Concurrently, state attorneys general are becoming more aggressive in filling perceived federal voids, launching their own antitrust, consumer protection, and privacy enforcement actions. This trend is amplified by the growing patchwork of state-level AI regulations, which creates significant compliance challenges for companies operating nationwide. For corporate counsel and their clients, this environment means preparing for scrutiny on multiple fronts. The firm advises boards to re-examine financial disclosure processes, develop adaptable compliance frameworks for divergent state laws, and prepare for potential investigations initiated by a wider range of government actors.