Category Archives: Securities Fraud

SEC’s Newest Task Force Takes Cross-Border Aim

by Jina L. Choi, Gabriela Li, David Woodcock, and Emily Rumble

From left to right: Jina L. Choi, Gabriela Li, David Woodcock, and Emily Rumble (photos courtesy of Gibson, Dunn & Crutcher LLP)

In line with the Trump Administration’s America First Investment Policy and perhaps in response to entreaties from Congress and state regulators to protect the U.S. capital markets from unscrupulous foreign actors, the SEC announced the formation of a Cross-Border Task Force within its Division of Enforcement on September 5, 2025.[1] The task force will focus on investigating foreign-based issuers for potential market manipulation, such as pump-and-dump and ramp-and-dump schemes, and will increase scrutiny of gatekeepers, particularly auditors and underwriters, who help foreign issuers access the U.S. capital markets. The statement notably singles out China as a jurisdiction where governmental control and other factors pose unique investor risks.

Continue reading →

SEC Now Requires Commission Approval for Subpoenas, but Says It Is Not ‘Walking Away’ From Enforcement

by Andrew Goldstein, Elizabeth Skey, and Bingxin Wu

Left to right: Andrew Goldstein, Elizabeth Skey and Bingxin Wu (photos courtesy of Cooley LLP)

On March 10, 2025, the US Securities and Exchange Commission (SEC) adopted a final rule that will require a majority of the commissioners to agree before the SEC formally opens an investigation. For the past 15 years, that power had been delegated to the SEC’s director of enforcement – enabling SEC staff attorneys to issue subpoenas to companies and individuals without approval of the commission. The new rule will make it more difficult for staff to gain subpoena power, adding a bureaucratic hurdle that could slow investigations down. At the same time, however, Acting Deputy Director of the Division of Enforcement Antonia Apps has insisted publicly that the SEC is not “walking away” from enforcement, but will focus on core areas, such as fraud and deceptive market practices.

Continue reading →

SEC Staff Clarifies That Meme Coins Are Not Securities

by Jenny Cieplak, Zachary Fallon, Ghaith Mahmood, Yvette D. Valdez, Stephen P. Wink, and Deric Behar

Top left to right: Jenny Cieplak, Zachary Fallon, and Ghaith Mahmood. Bottom left to right: Yvette D. Valdez, Stephen P. Wink, and Deric Behar. (Photos courtesy of Latham & Watkins LLP)

The Staff stated that most meme coins are not subject to federal securities laws or SEC fraud enforcement; who will oversee meme coins remains an open question.

On February 27, 2025, the Securities and Exchange Commission’s (SEC’s) Division of Corporation Finance published a Staff Statement on Meme Coins (the Statement). The Statement is the first tangible clarification of how the federal securities laws apply to a specific category of crypto since President Trump issued an executive order on digital assets (for more information, see this Latham blog post) and the SEC established a Crypto Task Force (for more information, see this Latham blog post). The Statement is responsive to the Crypto Task Force’s first priority (as highlighted by SEC Commissioner Hester Peirce, who leads the task force): determining the status of digital assets under the securities laws.

Continue reading →

SEC’s Focus on Cyber and AI to Continue Under Trump Administration

by Andrew J. Ceresney, Charu A. Chandrasekhar, Luke Dembosky, Avi Gesser, Erez Liebermann, Julie M. Riewe, Jeff Robins, Kristin A. Snyder, and Cameron Sharp

Top left to right: Andrew J. Ceresney, Charu A. Chandrasekhar, Luke Dembosky, and Avi Gesser. Bottom left to right: Erez Liebermann, Julie M. Riewe, Jeff Robins, and Kristin A. Snyder. (Photos courtesy of Debevoise & Plimpton LLP).

On February 20, 2025, the SEC announced the creation of the Cyber and Emerging Technologies Unit (“CETU”) to focus on “combatting cyber-related misconduct and to protect retail investors from bad actors in the emerging technologies space.” In this blog post, we provide an overview of the announcement, which illustrates that the Trump administration will continue to prioritize SEC cybersecurity and artificial intelligence examinations and enforcement, with a particular emphasis on fraudulent conduct impacting retail investors.

Continue reading →

The SEC’s Crypto Task Force Maps Its Journey

by Matthew Solomon, Tom Bednar, Hugh Conroy, Jr., Deborah North, Rahul Mukhi, Brandon Hammer, Samuel Levander, and Alex Janghorbani

From left to right: Matthew Solomon, Tom Bednar, Hugh Conroy, Jr., Deborah North, Rahul Mukhi, Brandon Hammer, Samuel Levander, and Alexander Janghorbani (photos courtesy of Cleary Gottlieb)

On February 4, 2025, SEC Commissioner Hester Peirce published a statement titled “The Journey Begins,” laying out a vision for the new administration’s SEC Crypto Task Force.[1] The statement signals a clean break from the enforcement-centered approach to the digital asset industry taken by former SEC Chair Gary Gensler. Commissioner Peirce compares that past approach to a bad road trip, where the Commission “refused to use regulatory tools at its disposal and incessantly slammed on the enforcement brakes as it lurched along a meandering route with a destination not discernible to anyone.”

Continue reading →

Key Considerations for Updating 2024 Annual Report Risk Factors

by Maia Gez, Scott Levi, Michelle Rutta, Melinda Anderson, and Danielle Herrick

Left to Right: Maia Gez, Scott Levi, Michelle Rutta, Melinda Anderson, and Danielle Herrick. (Photos courtesy of White & Case LLP)

With the 2025 annual reporting season upon us, public companies should consider potential updates to their risk factors for their Form 10-Ks and 20-Fs in light of recent economic, political, technological, and regulatory developments.[1]

As a starting point, this alert features (i) a list of key developments that US public companies should consider as they update risk factors in Part I and (ii) critical drafting considerations in Part II. Each company will, of course, need to assess its own material risks and tailor its risk factor disclosure to its particular circumstances.

As further described below, calendar year-end companies should review and update their risk factors by assessing the material risks that impact their businesses. Well-drafted risk factors play a crucial role in defending public companies against allegations of fraud under the US federal securities laws, and companies should therefore take the time to update their risk factor disclosure and tailor risks to their own facts and circumstances.

Continue reading →

Cybersecurity Disclosure and Enforcement Developments and Predictions

by Francesca L. Odell, Rahul Mukhi, Tom Bednar, Nina E. Bell, and Greg Stephens

Left to right: Francesca L. Odell, Rahul Mukhi, Tom Bednar, and Nina E. Bell (Photos courtesy of Cleary Gottlieb Steen & Hamilton LLP) (Not Pictured: Greg Stephens)

The SEC pursued multiple high-profile enforcement actions in 2024, alongside issuing additional guidance around compliance with the new cybersecurity disclosure rules.

Together these developments demonstrate a continued focus by the SEC on robust disclosure frameworks for cybersecurity incidents. Public companies will need to bear these developments in mind as they continue to grapple with cybersecurity disclosure requirements going into 2025.

Continue reading →

SEC Enforcement Year-End Overview

by Joel Cohen, Ladan Stewart, Tami Stark, Marietou Diouf, Gabriella Klein, and Robert DeNault

Top (Left to Right): Joel M. Cohen, Ladan Stewart and Tami Stark. Bottom (Left to Right): Marietou Diouf, Gabriella Klein, and Robert DeNault. (Photos courtesy of White & Case LLP)

Introduction

2024 marks the final year of Gary Gensler’s term as Chair of the U.S. Securities and Exchange Commission (“SEC”). The Gensler SEC has been aggressive on both the enforcement and rulemaking fronts. In response, the financial industry has fought back in sometimes unprecedented ways, including through legal challenges to the SEC’s rulemaking and enforcement programs. While questions remain about what the SEC will prioritize under the leadership of presumptive incoming Chair Paul Atkins, it seems likely that many of Chair Gensler’s enforcement priorities will be rolled back in the coming years. We can expect, for example, to have neared the end of the SEC’s years-long off-channel communications sweep. And the Gensler SEC’s intense focus on the crypto industry will very likely shift significantly under Chair Atkins.

We provide here an overview of the SEC’s enforcement program in 2024 and end with additional thoughts on how the agency’s enforcement priorities will likely change in 2025 and beyond.

Continue reading →

U.S. Authorities Charge Adani Defendants with Integrity Washing

by Kevin E. Davis

Photo courtesy of NYU

Gautam Adani is the founder of one of India’s largest conglomerates and ranks among the country’s prominent business people. He and his nephew Sagar Adani are learning the hard way that, in the U.S. legal system, the coverup can be treated just about as severely as the crime.

The Department of Justice and the Securities and Exchange Commission have accused the Adani defendants of collaborating with executives of a U.S.-listed Mauritian company called Azure Power Global Ltd. in a massive bribery scheme. The conspirators allegedly paid over USD 250 million in bribes to officials in the governments of several Indian states. The bribes were to induce the officials to purchase power that would be supplied by Adani Green Energy Ltd., an Indian company controlled by the Adani defendants, as well Azure.

Continue reading →

SEC Acting Director of Enforcement Delivers Remarks at PCCE’s Fall Conference

On November 22, 2024, the NYU Law Program on Corporate Compliance and Enforcement (PCCE) hosted a conference titled “New Directions in Corporate and Individual Enforcement.” At the conference, Sanjay Wadhwa, Acting Director of Enforcement, Securities and Exchange Commission (SEC), delivered remarks on the SEC’s enforcement priorities and enforcement policy, which are reprinted below and available on the SEC’s website here. After his remarks, Wadhwa participated in a fireside chat with PCCE’s Executive Director, Joseph Facciponti.

Good afternoon. Thank you to the Program on Corporate Compliance and Enforcement for the opportunity to speak to you all.

Continue reading →