As the January 1, 2025 reporting deadline for beneficial ownership information under the Corporate Transparency Act (“CTA”) quickly approaches, the United States District Court for the Eastern District of Texas (“Court”) issued a critical decision which has caused significant uncertainty.[1] On December 3, 2024, the Court issued a preliminarily injunction, temporarily blocking enforcement of the CTA and its reporting rule nationwide. The Court specifically stated “reporting companies need not comply with the CTA’s January 1, 2025, [beneficial ownership information] reporting deadline pending further order of the Court.”
On October 22, 2024, the Securities and Exchange Commission charged four companies with making materially misleading disclosures about their cybersecurity risks. Each of the companies—Unisys Corp., Avaya Holdings Corp., Check Point Software Technologies Ltd., and Mimecast Limited—agreed to pay hefty monetary penalties to settle the SEC’s charges.
The fines follow a lengthy investigation by the SEC into public companies affected by the 2020 SolarWinds breach, one of the most widespread cyberattacks to date. The attack, largely believed to have been carried out by ...
On July 8, 2024, the Financial Crimes Enforcement Network (“FinCEN”) issued additional FAQs relating to the Corporate Transparency Act (the “CTA”). More specifically, FinCEN provided helpful guidance pertaining to the reporting requirements of companies created or registered on or after January 1, 2024 that later wind up their affairs and cease to exist before their initial beneficial ownership information (“BOI”) report is due to FinCEN.
The SEC released a statement from Division of Corporation Finance Director Erik Gerding on June 24, 2024 reflecting Gerding’s opening remarks and the matters discussed on a panel addressing the Division's Disclosure Review Program during the April 2024 SEC Speaks Conference in Washington, DC. The statement provides a comprehensive overview of recent developments in the Division and observations gleaned from the review of filings.
On April 18, 2024, the Financial Crimes Enforcement Network (“FinCEN”) issued additional FAQs relating to the Corporate Transparency Act (the “CTA”). More specifically, FinCEN provided helpful guidance pertaining to the reporting requirements of homeowners associations (“HOAs”) and reporting companies that have ownership interest held in trusts.
On April 5, 2024, a jury in Federal Court in California found that the SEC established that Defendant Matthew Panuwat was liable under a civil misappropriation theory of insider trading violations of Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5. Panuwat formerly worked at a biopharmaceutical firm, Medivation, and bought call options in the biopharmaceutical firm Incyte minutes after learning that Medivation was to be acquired at a significant premium. When the Medivation transaction was announced, Incyte’s stock price increased and Panuwat sold his Incyte investment at a significant profit.
The U.S. Securities and Exchange Commission announced on April 4, 2024 that it is voluntarily delaying the
implementation of its climate disclosure regulations while it fights an Eighth Circuit Court challenge seeking
to vacate the rules.
On March 15, 2024, the U.S. Court of Appeals for the Fifth Circuit issued a stay of the Securities and Exchange Commission’s new climate-disclosure rules, which were adopted March 6.
On March 1, 2024, a Federal District Court in Alabama held that the Corporate Transparency Act (the “CTA”) is unconstitutional.[1] The Court reasoned that the plaintiffs were entitled to summary judgment because the CTA “exceeds the Constitution’s limits on Congress’ power.” As the Court ruled Congress exceeded its enumerated powers, the Court found it unnecessary to render a decision on the plaintiffs’ other arguments, specifically, whether or not the CTA violates the First, Fourth, and Fifth Amendments.
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Recent Posts
- Corporate Transparency Act Update: Texas Federal Court Issues Nationwide Injunction
- SEC Fines Four Companies $7M for Violating Cyber Disclosure Rules
- FinCEN Issues Additional Guidance for Reporting Companies on Dissolved Entities
- Division of Corporation Finance Director Statement: The State of Disclosure Review
- FinCEN Issues Additional Guidance for HOAs and Trusts under the Corporate Transparency Act
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- New SEC Climate Disclosure Rules – Temporarily Stayed
- Corporate Transparency Act Ruled Unconstitutional
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