The United States Court of Appeals for the Fourth Circuit recently joined a growing consensus among federal appellate courts: short-seller reports, without more, rarely suffice to plead loss causation under the federal securities laws. In Defeo v. IonQ, Inc., 2025 U.S. App. LEXIS 8216, ___ F.4th ___ (4th Cir. Apr. 8, 2025), the Court held that a report by activist short-seller Scorpion Capital — which coincided with a significant stock price drop — did not constitute a corrective disclosure revealing previously concealed fraud to the market. The opinion aligns the Fourth Circuit with decisions from the Ninth Circuit, which have similarly…
Continue Reading Fourth Circuit Rejects the Use of Short-Seller Report as a Basis for Satisfying Loss Causation Element in Securities Fraud Action

On March 25, 2025, the governor of Delaware signed into law Senate Bill 21, over much opposition from the plaintiffs’ bar and some academics. The bill, which amends Sections 144 and Section 220 of the Delaware General Corporation Law, 8 Del. C. (the “DGCL”), seeks to provide clarity for transactional planners in conflicted and controller transactions, and seeks to limit the reach of Section 220 books and records demands. These amendments significantly alter the controller transaction and books and records landscape.
Continue Reading Delaware Enacts Sweeping Changes to the Delaware General Corporation Law

The U.S. Securities and Exchange Commission (SEC) has announced significant changes to its confidential filing procedures, aiming to support capital formation and provide greater flexibility for companies planning public offerings. These enhancements, effective as of March 3, 2025, were detailed in a press release by the SEC.
Continue Reading SEC to Expand Confidential Filing Privileges

Just over one month into the second Trump Administration, the crypto industry appears poised to notch yet another victory in its longstanding tug-of-war with regulators — perhaps its most significant to date. On February 21, Coinbase Chief Legal Officer Paul Grewal announced via blog post that the U.S. Securities and Exchange Commission (“SEC”) is set to drop its enforcement action against the company. The lawsuit, which claimed that the company had failed to fulfill registration requirements, has been one of the SEC’s highest-profile crypto cases.
Continue Reading SEC Withdraws from Prominent Crypto Enforcement Amid Regulatory Shift

As artificial intelligence (AI) continues to transform the business world, acquirors need to prepare for a deep dive when evaluating companies that use AI to enable their businesses or create proprietary AI. Key considerations for buyers targeting AI-driven companies include understanding how AI is being used, assessing the risks associated with AI creation and use, being mindful of protecting proprietary AI technology, ensuring cybersecurity and data privacy, and complying with the regulatory landscape.
Continue Reading M&A Playbook for Acquiring AI-Powered Companies

On February 19, 2025, the Financial Crimes Enforcement Network (“FinCEN”) announced that beneficial ownership information reporting requirements under the Corporate Transparency Act (“CTA”) are back in effect with a new deadline of March 21, 2025 for most reporting companies. This announcement came in response to the decision made on February 17, 2025 by the U.S. District for the Eastern District of Texas in Smith v. U.S. Department of the Treasury, No. 6:24-cv-336-JDK, 2025 WL 41924 (E.D. Tex.) to stay (lift) the preliminary injunction on enforcement of the CTA. …
Continue Reading The Return of the CTA: FinCEN Confirms that Beneficial Ownership Information Reporting Requirements are Back in Effect with a New Deadline of March 21, 2025

A recent civil complaint from the U.S. Department of Justice (DOJ) highlights the importance of carefully planning interim operating covenants in M&A deals and structuring the process to prevent buyers from gaining control of targets too soon—before the mandatory waiting period under the Hart-Scott-Rodino Act (HSR Act) is up. This is commonly referred to as “gun-jumping.”…
Continue Reading DOJ Gun-Jumping Complaint Highlights Importance of Careful Preparation of Interim Operating Covenants to Avoid HSR Act Violations

In Maffei v. Palkon, No. 125, 2024, 2025 Del. LEXIS 51 (Del. Feb. 4, 2025) (Valihura, J.), the Delaware Supreme Court held that a corporation’s decision to reincorporate in another state purportedly to reduce exposure to potential future litigation risk is subject to the deferential business judgment rule, as long as the decision is not alleged to have been made to avoid any existing or threatened litigation or in contemplation of a specific transaction. Reversing the decision of the Delaware Court of Chancery [see blog article here], the Supreme Court concluded that reduced exposure to potential liabilities that a controlling…
Continue Reading Delaware Supreme Court Holds Business Judgment Governs Decision to Reincorporate Outside of Delaware For Purpose of Reducing Litigation Exposure In the Absence of Existing or Threatened Litigation

On January 23, 2025, in McHenry v. Texas Top Cop Shop, Inc (formerly captioned Garland v. Texas Top Cop Shop, Inc.), No. 24A653, 2025 WL 272062 (U.S. Jan. 23, 2025), the United States Supreme Court issued an opinion once again staying the injunction from the United States District Court for the Eastern District of Texas of the Corporate Transparency Act (“CTA”). The injunction had previously halted enforcement of the CTA’s reporting requirement that all “reporting companies” disclose information about their beneficial owners to the U.S. Department of the Treasury Financial Crimes Enforcement Network (“FinCEN”). For background information about the CTA and its…
Continue Reading FinCEN Confirms that CTA Filings Remain Optional Despite Supreme Court Ruling

On January 23, 2025, President Trump issued an executive order entitled “Strengthening American Leadership in Digital Financial Technology,” establishing his Administration’s policy “to support the responsible growth and use of digital assets, blockchain technology, and related technologies across all sectors of the economy” (the “EO”).
Continue Reading President Trump Issues Executive Order on Crypto as SEC Signals Enforcement Shift

We invite you to read our latest client alert to assist in the preparation of your 10-K and 2025 annual meeting proxy statement. This alert highlights new disclosure requirements, hot topics and regulatory enforcement actions that may impact disclosure and processes, and other matters that companies should consider for compliance and planning purposes.
Continue Reading Things to Keep in Mind for Your Annual Report on Form 10-K and Proxy Statement

On December 26, 2024, in Texas Top Cop Shop, Inc. v. Garland, No. 24-40792, 2024 WL 5224138 (5th Cir. Dec. 26, 2024), a merits panel of the United States Court of Appeals for the Fifth Circuit issued an order vacating the Court’s own stay of the preliminary injunction enjoining enforcement of the Corporate Transparency Act (“CTA”), that was originally entered by the United States District Court for the Eastern District of Texas on December 3, 2024, No. 4:24-CV-478, 2024 WL 5049220 (E.D. Tex. Dec 5, 2024).
Continue Reading Fifth Circuit Court of Appeals Vacates Its Own Stay Rendering the Corporate Transparency Act Unenforceable . . . Again

As previously reported (here and here), some Delaware courts have recently declined to “blue pencil,” i.e., modify and narrow overbroad restrictive covenants. Instead, they have stricken in their entirety covenants deemed overbroad and declined to enforce them. On December 10, 2024, in Sunder Energy, LLC v. Tyler Jackson, et al., the Delaware Supreme Court affirmed that Delaware courts have the discretion to decline to blue pencil overbroad restrictive covenants, even if the defendant’s conduct would violate a more narrowly circumscribed covenant. …
Continue Reading Delaware Supreme Court Declines to Enforce Noncompete Against Company Founder Who Joined Competitor