Corporate & Securities Blog

On June 10, 2025, the U.S. Court of Appeals for the Ninth Circuit reversed the dismissal of a securities class action after finding the plaintiff sufficiently alleged a real estate investment fund and its managing executive misled investors by exaggerating potential investment returns and failing to disclose a SEC staff comment letter that instructed the fund to remove the overstated projections from its offering materials. Notably, the court viewed the fund’s decision to comply with the SEC’s directive and remove exaggerated projections as evidence that the fund and its manager knew the projections were false. The court’s decision in Pino v. Cardone Capital, LLC provides cautionary guidance regarding the legal significance of SEC comments—namely, that a company’s failure to dispute a comment letter could be construed as an implicit admission of falsity, potentially exposing it to liability under Section 12(a)(2) of the Securities Act of 1933 (the “Act”).

The settlement in House v. NCAA (“House Settlement”) was formally approved by Judge Claudia Wilken on June 6, 2025. The House Settlement is poised to bring significant changes to the landscape of college athletics, with schools now permitted to make direct payments to student-athletes. This shift introduces a range of legal and operational challenges that increasingly mirror the compensation structures of professional sports. Navigating this new environment will require legal and financial expertise traditionally found in the professional sports world. Issues related to contract structuring and enforceability, salary caps, and endorsement deal oversight will become central to how athletic programs operate and make strategic decisions. These concepts extend beyond compliance and will play an integral role in roster building, financial planning, and long-term program sustainability and success.

On April 11, 2025, the Staff of the SEC’s Division of Corporation Finance released six Compliance and Disclosure Interpretations (“C&DIs”) that address the Form 10-K restatement checkboxes and related disclosures under Item 402(w)(2) of Regulation S-K. The new guidance provides public companies with more clarity regarding the disclosures associated with the recovery of erroneously awarded incentive-based compensation.

On March 31, 2025, members of the U.S. House of Representatives Committee on Financial Services sent a letter to Mark Uyeda, Acting Chairman of the U.S. Securities and Exchange Commission. Seeking to “undo the damage from former Chairman Gary Gensler’s tenure,” the letter requests that the SEC withdraw fourteen final and proposed rules, including both the SEC’s Pay Versus Performance rules (adopted August 2022) and rules related to Cybersecurity Risk Management, Strategy, Governance and Incident Disclosure (adopted July 2023).  The SEC may withdraw adopted rules pursuant to the Administrative Procedure Act, which generally involves a public notice and comment period. It will be interesting to see the response of incoming SEC Chairman Paul Atkins. Stay tuned.

On March 21, 2025, the Financial Crimes Enforcement Network (“FinCEN”) issued an interim final rule that significantly narrows the beneficial ownership information (“BOI”) reporting requirements under the Corporate Transparency Act (“CTA”).

On February 27, 2025, the Financial Crimes Enforcement Network (“FinCEN”) announced that it will not issue any fines or penalties or initiate any other enforcement action against companies that do not file or update beneficial ownership information (“BOI”) reports under the Corporate Transparency Act (“CTA”) by the newly-instated March 21, 2025 deadline.

On February 17, a federal judge in Texas lifted a preliminary injunction issued in Smith v. United States Department of the Treasury, removing the last legal hurdle to the enforcement of the Corporate Transparency Act (“CTA”). As a result, the CTA’s reporting obligations are back in effect—at least temporarily.

Last Friday, the United States Supreme Court lifted a nationwide injunction originally issued by the U.S. District Court for the Eastern District of Texas (and later upheld by the Fifth Circuit Court of Appeals) in Texas Top Cop Shop, Inc. v. McHenry. The Top Cop injunction had blocked enforcement of the Corporate Transparency Act (the “CTA”).

As we embark on the new year, it is time to consider what is next for the SEC—specifically, EDGAR Next. In September 2024, the Securities and Exchange Commission adopted amendments to Regulation S-T aimed at modernizing the agency’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system. The new system—aptly named EDGAR Next—will feature improved access procedures and enhanced security measures, including two-factor authentication.

Today, the United States Supreme Court reinstated the Corporate Transparency Act (the “CTA”) and allowed its reporting obligations to go into effect pending a challenge to the law’s merits in the U.S. Court of Appeals for the Fifth Circuit.