S&C Critical Insights

In this episode of S&C’s Critical Insights, Eric Kadel and Andrew DeFilippis, Co-Heads of S&C’s Tariffs Response Team, and associate Michael Loughlin discuss recent developments in tariffs, including the Supreme Court’s decision in Learning Resources, considerations surrounding tariff refunds and the emerging marked for refunds.

In this episode of S&C’s Critical Insights, Christopher Viapiano, Co-Head of S&C’s Securities Litigation Group, and Litigation partners Lenny Traps and Oliver Engebretson-Schooley, discuss strategies to defend against an emerging and increasingly important development in stockholder derivative litigation: the rise of derivative claims under Section 10(b) of the Exchange Act. 

In this episode of S&C’s Critical Insights, Annie Ostrager, Co-Head of S&C’s Employment Law Group, Litigation Partner Kamil Shields and Litigation Associate Sabrina Solow, underscore key takeaways from the whistleblowing series and discuss anticipated developments. They discuss how companies may respond to the different federal government whistleblower programs, as well as the shift in priorities under the current administration, including investigating federal contractors. A preview of the conversation can be found in the Q+A below. Sabrina: What are trends you’re anticipating or areas you’re watching in the whistleblowing space? Annie: One significant area of focus, where we are already seeing activity, including based on whistleblower tips, is investigations of federal contractors. Earlier this year, the administration announced its Civil Rights Fraud Initiative, the purpose of which is to “investigate and, as appropriate, pursue claims against any recipient of federal funds that knowingly violates federal civil rights laws.” The Initiative is intended to enforce policies announced in various recent Executive Orders aimed at certain forms of discrimination. Kamil: We expect that universities could be a particular area of focus as a basis of a False Claims Act action and that action could be pursued on the ground that the university is violating the DEI policies that you just discussed in these Executive Orders. While we have not yet seen… a False Claims Act enforcement action brought against a university by the Civil Rights Fraud Initiative, according to news reports, investigations by the DOJ have started based on this theory.

In this episode of S&C’s Critical Insights, Kamil Shields, a partner in S&C’s Litigation Group, Mehdi Ansari, Co-Head of the Artificial Intelligence Practice, and Litigation Associate Sabrina Solow discuss whistleblowing developments, including the proposed AI Whistleblower Protection Act. They also compare how the current and prior administrations have approached AI through executive orders, and examine recent parallel criminal and civil cases brought by the Department of Justice and Securities and Exchange Commission for alleged “AI-washing,” which refers to a company’s false or misleading statements about its use of AI and the capabilities of its AI program. A preview of the conversation can be found in the Q+A below. Sabrina: Mehdi, could you describe the recent legislation to protect AI whistleblowers and how it came about? Mehdi: Introduction of this bill comes on the heels of commentary from Senator Grassley and others expressing concern that employment and non-disclosure agreements may be stifling employees of AI companies from making protected disclosures to government regulators. … It is worth noting that current whistleblower protections under Sarbanes-Oxley and Dodd-Frank are generally tied to reporting unlawful activity. This Act would be broader, covering disclosures about risks that may not yet be illegal. Sabrina: Kamil, what would Senator Grassley’s proposed AI Whistleblower Act do?  Kamil: Importantly, unlike other regimes discussed in prior episodes, the legislation does not purport to offer the opportunity for a large monetary reward for blowing the whistle. It does, however, contain a section called “Anti-Retaliation Protection for AI Whistleblowers.” That section protects a whistleblower who provided information regarding an AI security vulnerability or conduct the whistleblower reasonably believes to be an AI security vulnerability or AI violation from a range of retaliatory conduct, including demotion, suspension, threats, harassment, or termination.

In this episode of S&C’s Critical Insights, Annie Ostrager, Co-Head of S&C’s Employment Law Group, Nic Bourtin, Head of the Criminal Defense and Investigations Group, and Litigation Associate Sabrina Solow discuss whistleblowing developments, including the DOJ Criminal Division’s Corporate Pilot Program and its recent changes under the new administration.

In this episode of S&C’s Critical Insights, Kamil Shields, a partner in S&C’s Litigation Group, Kyle Mach, a partner in S&C’s Antitrust Group, and Litigation Associate Sabrina Solow discuss the new whistleblower program established by DOJ Antitrust Division. They start off with brief background on antitrust law and then discuss the new whistleblower program and how it reflects a change in the Antitrust Division’s approach.   A preview of the conversation can be found in the Q+A below. Sabrina: Kamil, can you speak to the genesis of the Antitrust Division’s new whistleblower program and how it fits into existing DOJ Antitrust policies?  Kamil: Since the 1990s, the Antitrust Division has had a “leniency policy.” Broadly speaking, when an organization or individual is the first to report that it engaged in a criminal conspiracy, it can receive non-prosecution protection. Under the statute known as “ACPERA,” the first to report these conspiracies can also receive a variety of benefits in related civil litigation as well. The leniency policy is an important enforcement tool for the Antitrust Division. It creates a powerful incentive for companies and individuals to self-report in order to avoid or mitigate criminal prosecution and penalties. Then, on July 8, the DOJ Antitrust Division announced a partnership with the U.S. Postal Service to create a Whistleblower Rewards Program for reporting criminal offenses on “antitrust crimes and related offenses.” Under this program, whistleblowers who voluntarily provide information about antitrust offenses that result in at least a $1 million recovery may be eligible to earn a reward, which is presumptively 15-30 percent of the amount of the fine or recovery.   Sabrina: Kyle, what are the eligibility requirements of this new program? Kyle: There are a few key eligibility requirements we should touch on: (1) the tip must relate to an eligible criminal violation; (2) the whistleblower must provide original information; and (3) there must be a nexus to the U.S. Postal Service. Taking the first requirement first. The whistleblower must provide information relating to an eligible violation under this Antitrust program. It can’t be a tip on just anything.

In this episode of S&C’s Critical Insights, S&C Tax Co-Heads Isaac Wheeler and Davis Wang, along with Tax Counsel Bella Schapiro and Special Counsel Aharon Friedman, continue their discussion on The One Big Beautiful Bill Act. They dive into the policy debates driving the OBBBA changes to green energy and international tax, highlighting opportunities and challenges for taxpayers. They also set out areas that will be a priority for guidance by the Treasury Department and the IRS.  A preview of the conversation can be found in the Q+A below. Isaac: Let’s talk a little bit about green energy and the IRA. I was hearing that some rollback of the IRA was happening, but that the more established technologies like wind and solar should be largely safe, but it’s almost like the opposite happened. Aharon, did something change as part of the negotiations of the bill? Aharon: I think there’s an underlying current amongst Republicans as to wind and solar subsidies needing to be done with. For decades, these industries told Republicans that they need temporary incentives in order to get them off the ground, but at some point in time they would be able to be sufficient on their own and compete in the marketplace. This conversation has been going on for 20 years and I think Republicans started asking more questions as well and just thought it was time to start cutting it off. I also think from a policy perspective, there have been more questions asked on the Republican side of the aisle with regard to how solar and wind, because they’re temporary, affect the grid. Isaac: Let’s move on to regulatory guidance because a big part of what now tax policy moves towards is what do the regulations look like that are interpreting the bills. Bella, do you want to discuss this?  Bella: There’s over 60 calls for regulations by the Treasury for this bill. Some of it is to explain and provide details or rules and some of it is to make the mechanics work. And even beyond those that are specifically authorized in the tax, there are other provisions that will require Treasury to provide guidance and explanations to taxpayers about. So I think it will be interesting to see what they prioritize, what comes out first of how various provisions are interpreted, particularly given the lack of legislative history.

In this episode of S&C’s Critical Insights, S&C Tax Co-Heads Isaac Wheeler and Davis Wang, along with Tax Counsel Bella Schapiro and Special Counsel Aharon Friedman, discuss the background, process and tax implications of The One Big Beautiful Bill Act.  A preview of the conversation can be found in the Q+A below. Isaac: Aharon, was there anything interesting about the timing of The One Big Beautiful Bill, maybe relative to other reconciliation bills? Aharon: I think a good comparison to this bill is the Tax Cuts and Jobs Act or TCJA, which wasn’t signed until December 22, 2017, and I think that relates to a lot of the fundamental differences between the TCJA and the OBBBA. I think a real difference in the process in 2017 was that the bill followed more of a “respecting congressional traditions” with regards to how markups are conducted and how legislation moves. Another key difference was that the Senate Finance Committee actually held the markup in 2017.  They didn’t hold the markup this time around. Also in 2017, there was a formal Conference Committee, which has become increasingly rare in recent decades. This time around the House passed the bill. Isaac: Davis, do you want to discuss “carried interest”? Davis: I don’t think that people thought that there was a need to have this in the legislation. On the other hand, on the campaign trail, President Trump had said that he was inclined to repeal the exception that carried interest had enjoyed.  So, there was always this question of whether carried interest should in fact come back into play. But again, to the surprise of many, not only did it not make it into the legislation, it never touched any of the iterations of the legislation. It was not in the House bill or the Senate bill.

In this episode of S&C’s Critical Insights, Annie Ostrager, Co-Head of S&C’s Employment Law Group, Litigation Partner Kamil Shields and Litigation Associate Sabrina Solow, discuss a range of whistleblowing developments. They touch on the recent downward trend in SEC whistleblowing enforcement and contrast that against the opposite trend under other programs, in part driven by a growing focus on whistleblowers as a potential means of pursuing investigative priorities. A preview of the conversation can be found in the Q+A below. Sabrina: Kamil, can you start us off with brief background? Kamil: In the U.S., there are a variety of avenues for a whistleblower to consider.  For example, the SEC, Federal Reserve, CFTC, and a provision of the False Claims Act have long provided an avenue for whistleblowers to come forward. More recently, DOJ Criminal and DOJ Antitrust have developed respective whistleblowing programs. Sabrina: We’ve been seeing an incredible amount of coverage on whistleblowing cases, regimes, and proposed legislation.  But against this background of heightened attention to whistleblower activities, we are seeing a downturn in SEC awards.  Annie, can you give some background? Annie: As reported in the past couple of weeks, the SEC has denied over 30 consecutive awards this year between late-April and mid-July. In fact, only about $20 million has been awarded this year.  Although we’re only a little more than halfway through the year, that is a drop in the bucket compared to last year, when the agency awarded over $255 million to 47 individual whistleblowers. This may reflect a change in approach and priorities at the SEC. For example, under the last administration we saw a significant uptick in SEC enforcement actions related to the SEC whistleblower protection rule, Rule 21F-17. Under the current administration, however, we have not seen any SEC whistleblower rule enforcement actions to date.

In this episode of S&C’s Critical Insights, Eric Kadel and Sharon Cohen Levin, Co-Heads of S&C’s National Security Practice, Tom White, Co-Head of the Firm’s International Arbitration and Global Dispute Resolution Practice, and Litigation Special Counsel Andrew DeFilippis, provide an overview on supply chain enforcement and compliance. They explore key enforcement risks stemming from recent tariffs and discuss the potential for civil litigation under the False Claims Act. A preview of the conversation can be found in the Q+A below. Andrew: Customs fraud and tariff evasion are now listed as the Department’s second-highest white-collar criminal enforcement priority. What does that signal about how the government is approaching these issues today? Sharon: It’s a fundamental shift. For years, customs-related violations were typically addressed as regulatory infractions, or occasionally, in egregious cases as criminal prosecutions involving false statements, conspiracy to defraud the government, or smuggling. Those violations didn’t even make the list of priorities. But the posture today is markedly different. DOJ has identified customs and tariffs fraud as a top corporate criminal enforcement priority, signaling a shift for companies with global supply chains. Andrew: What makes the FCA such a powerful statute in the trade context? Tom: The False Claims Act is fundamentally about ensuring the government receives what it's owed. One thing that makes it so potent, especially in the trade space, is the low standard for triggering liability. The FCA doesn’t require proof of specific intent to defraud. Instead, companies can be held liable if they submit false information “knowingly”—which includes acting in reckless disregard or deliberate ignorance of the truth. That’s a lower threshold than what’s required for criminal prosecution under criminal smuggling or IEEPA’s criminal provisions.

In this episode of S&C’s Critical Insights, Annie Ostrager, Co-Head of S&C’s Employment Law Group, and Litigation Partner Kamil Shields, discuss recent developments in False Claims Act (FCA) cases, especially in light of the current Administration’s focus. Annie and Kamil provide background on the FCA and explain its role in investigations of and actions focused on alleged fraud in connection with government programs. They also cover recent notable settlements, with recoveries amounting to hundreds of millions of dollars. They also delve into Executive Order 14173, which has implications for the use of the FCA, focusing on antidiscrimination laws. The discussion includes recent court actions and the administration’s emphasis on investigating and penalizing illegal DEI practices in the private sector.  To learn more about risks and opportunities under the FCA in the new tariff environment, read Partner Thomas White and Special Counsel Andrew DeFilippis’ article in Bloomberg Law “New Tariff Environment Poses Big Risk and Opportunity Under FCA.”

In this episode of S&C’s Critical Insights, Annie Ostrager, Co-Head of S&C’s Employment Law Group, Alex Gross, a partner in the Firm’s Litigation Group, and associate Sabrina Solow explore strategic considerations for a company involved in a trade secrets case. Topics include the role of injunctive relief, the impact of mandatory disclosure regimes and related internal investigations

In this episode of S&C’s Critical Insights, Annie Ostrager, Co-Head of S&C’s Employment Law Group, Alex Gross, a partner in the Firm’s Litigation Group, and associate Sabrina Solow, discuss steps companies can take in the employment context to protect against disclosure of trade secrets. They explore protections that can mitigate risk when an employee leaves, including electronic measures to limit or disable access to information; policies, procedures, and contractual requirements, such as nondisclosure agreements; and monitoring activities of a competitor who has hired former employees.  They also discuss how to limit the risk of new employees bringing trade secrets from their former employer.  Annie, Alex and Sabrina also discuss the importance of training and culture, including reminding employees that they do not own trade secrets they are privy to or contribute to in their work. 

In this episode of S&C’s Critical Insights, Annie Ostrager, Co-Head of S&C’s Employment Law Group, Alex Gross, a partner in the Firm’s Litigation Group, and associate Sabrina Solow, explore the interaction between trade secret litigation and non-compete agreements. They discuss how non-compete provisions in employment contracts can help mitigate the risk of employees taking confidential information to competitors and the challenges associated with enforcing non-competes. Annie, Alex and Sabrina also cover the concept of “inevitable disclosure” of confidential information, recent court cases related to non-competes and trade secrets, and the implications of the FTC's efforts to invalidate non-compete agreements on a federal level.

In this episode of S&C’s Critical Insights, Annie Ostrager, Co-Head of S&C’s Employment Law Group, Alex Gross, a partner in the Firm’s Litigation Group, and associate Sabrina Solow, focus on the current trade secret litigation landscape, including recent decisions in the Second, Third and Seventh Circuits relating to an important measure of damages.

In this episode of S&C’s Critical Insights, Annie Ostrager, Co-Head of S&C’s Employment Law Group, Alex Gross, a partner in the Firm’s Litigation Group, and associate Sabrina Solow, provide a background discussion on trade secrets. They explore how companies can find themselves involved in trade secret disputes and discuss the relevant statutory framework, including the Uniform Trade Secrets Act and the Defend Trade Secrets Act.  Annie, Alex and Sabrina highlight the importance of understanding both state and federal laws to protect trade secrets and discuss the forms of relief available, such as injunctive and monetary relief.

In this episode of S&C’s Critical Insights, Jeff Scott and Julia Malkina, Co-Heads of S&C’s Securities Litigation Practice, discuss the upcoming November 13 oral argument in NVIDIA Corp. v. E. Ohman J:or Fonder AB and the potential implications for companies’ securities-litigation exposure. 

In this episode of S&C’s Critical Insights, Jeff Scott and Julia Malkina, Co-Heads of S&C’s Securities Litigation Practice, discuss the upcoming November 6 oral argument in Facebook v. Amalgamated Bank and its implications for companies’ risk disclosures and potential litigation regarding those disclosures.  The issue before the Court is whether a company’s risk disclosures are false or misleading when they do not disclose that a risk has materialized in the past—and if so, under what circumstances. Public companies routinely make such risk disclosures, so this case has the potential to have significant effects both on companies’ disclosure practices and potential exposure.

In this episode of S&C’s Critical Insights, Samantha Hynes, a partner in S&C’s Antitrust Group, and Brad Smith, special counsel in the Antitrust Group, discuss the impact of the Federal Trade Commission’s final rule that made substantial modifications to the form used to report transactions requiring a premerger filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The new form will require substantially more information and documents than are currently required.

In this episode of S&C’s Critical Insights, S&C litigation partner John Hardiman discusses Vice Chancellor J. Travis Laster’s recent ruling in Sarah Clement v. Apollo Global Management and its implications for controlling shareholders in M&A transactions. Despite the Delaware Chancery Court’s intense scrutiny of transactions involving controlling shareholders, the Court gave the controller a rare win and dismissed a complaint alleging that a merger was unfair because the controller allegedly extracted unique benefits to the determinant of minority shareholders. Along the way, the court also elaborated upon two issues of Delaware “unique benefit” law in controlling stockholder transactions of interest to Delaware practitioners: (i) whether the unique benefit received by the controller has to be at the expense of the minority; and (ii) the framework for analyzing challenges to a merger where the claimed benefit is the elimination of litigation exposure.

In this episode of S&C’s Critical Insights, Corporate Governance Co-Heads Marc Treviño and Melissa Sawyer and Special Counsel June Hu continue to analyze significant trends and developments that emerged from the recent U.S. annual meeting proxy season and provide takeaways for 2025.

In this episode of S&C’s Critical Insights, Corporate Governance Co-Head Marc Treviño analyzes significant trends and developments that emerged from the recent U.S. annual meeting proxy season.

In this episode of S&C’s Critical Insights, Tony Lewis and Eric Kadel, Co-Heads of S&C’s National Security Practice, Sergio Galvis, Head of the Firm’s Latin American Practice and Inosi Nyatta, Co-Head of S&C’s Project Finance Group, discuss key takeaways for U.S. companies considering cross-border investments, especially in light of the new Treasury Regulations that prohibit certain outbound investments in sensitive technologies.

In this episode of S&C’s Critical Insights, Annie Ostrager, Co-Head of S&C’s Employment Law Group, and Jeannette Bander, a partner in S&C’s Executive Compensation Group, provide an update on the nationwide injunction against the FTC’s non-compete rule and discuss considerations for companies in light of this decision.

In this episode of S&C’s Critical Insights, Nader Mousavi, Co-head of S&C’s Artificial Intelligence Practice, and Jay Clayton, Senior Policy Advisor and Of Counsel to S&C, discuss key considerations for boards in their oversight of a company’s AI technologies and policies, and how to build an effective AI governance framework. Boards should stay informed and be proactive, Nader and Jay note. With regulations around AI still evolving, having a robust governance framework can protect a company from potential legal issues and enhance a company’s reputation for responsible and ethical AI use.  Disclaimer: This is not legal advice.

In this episode of S&C’s Critical Insights, Bill Monahan, Head of S&C’s Products Liability & Mass Torts Group, and Shane Palmer, an associate in the Firm’s Litigation Group, examine the new proposed Rule 16.1 of the Federal Rules of Civil Procedure, which the Judicial Conference of the United States’ Advisory Committee on Civil Rules recently voted to adopt as the first rule governing multidistrict litigation. They discuss the original proposal for Rule 16.1 that was published last year, the defense and plaintiffs bars’ reaction to the proposed rule, and the final proposed rule that was adopted last month and its implications for MDLs.  Since Congress passed the Multidistrict Litigation Act in 1968 and created the MDL process, there have been no specific rules dictating how judges should manage MDLs, beyond the Federal Rules of Civil Procedure that apply in every federal civil case. In 2017, the Advisory Committee established an MDL Subcommittee to consider whether new rules should be added to address the unique challenges of MDLs. Rule 16.1, which is designed to guide MDL courts in addressing the various and complex issues unique to MDL proceedings, is the first proposed rule to come out of the MDL Subcommittee’s efforts.

In this episode of S&C’s Critical Insights, Annie Ostrager, Co-Head of S&C’s Labor & Employment Group, and Jeannette Bander, a partner in S&C’s Executive Compensation Group, provide an update on the FTC’s final rule containing a sweeping ban on non-compete agreements.

In this episode of S&C’s Critical Insights, Annie Ostrager, Co-Head of S&C’s Labor & Employment Group, and Jeannette Bander, a partner in S&C’s Executive Compensation Group, discussed non-compete agreements and the evolving nature of their enforceability, including developments at the federal and state level.

In this episode of S&C’s Critical Insights, Sharon Cohen Levin, Craig Jones and Eric Kadel, Co-Heads of S&C’s National Security Practice, Adam Szubin, Of Counsel in S&C’s National Security Practice, and Andrew DeFilippis, Special Counsel in S&C’s National Security Practice, continue their discussion of significant developments in national security enforcement.

In this episode of S&C’s Critical Insights, Sharon Cohen Levin, Tony Lewis and Eric Kadel, Co-Heads of S&C’s National Security Practice, Adam Szubin, Of Counsel in S&C’s National Security Practice, and Andrew DeFilippis, Special Counsel in S&C’s National Security Practice, continue their discussion of significant developments in national security enforcement.

In this episode of S&C’s Critical Insights, Annie Ostrager, Co-Head of S&C’s Labor & Employment Group, and Kamil Shields, a partner in S&C’s Litigation Group, discussed recent developments in whistleblower enforcement investigations and new whistleblower programs. Annie and Kamil cover the increase in enforcement actions and investigations into employment and other agreements that the SEC and other regulators view as potentially impeding, preventing or discouraging whistleblower activity. They also discuss new programs aimed at further incentivizing whistleblower reporting to the government, such as the Whistleblower Pilot Program created by the United States Attorney’s Office for the Southern District of New York.

Ten years ago, international companies typically needed to monitor national security developments only if they were doing business with a U.S. government agency or operating in higher risk jurisdictions or sectors such as military or dual-use goods. Over the past decade, however, Western governments—led by the United States—have expanded the use of sanctions, export controls, import restrictions and investment laws to more jurisdictions and more sectors, requiring nearly every multinational company to be attuned to and anticipate developments in these laws and regulations, including those seeking to prevent espionage, theft of trade secrets, cyber attacks and other similar threats. In addition, the governments of nations such as Russia and China have enacted an array of sanctions, export and other control measures, which can subject multinational companies to highly challenging situations with conflicting sanctions regimes. In this environment, companies and financial institutions must address a range of national security risks and considerations when establishing or executing their business operations, legal decision-making and compliance programs. In this podcast, former federal prosecutors Sharon Cohen Levin, Nicky Friedlander, Tony Lewis and Amanda Houle discuss major developments in national security enforcement, including the Department of Justice’s increased focus on this area. Sharon led the Money Laundering and Asset Forfeiture Unit in the U.S. Attorney’s Office for the Southern District of New York for two decades; Nicky is a former Chief of the Complex Frauds and Cybercrime Unit in the U.S. Attorney’s Office for the Southern District of New York; Tony was the Deputy Chief of the Terrorism and Export Crimes Section in the U.S. Attorney’s Office for the Central District of California; and Amanda was Co-Chief of the National Security & International Narcotics Unit in the U.S. Attorney’s Office for the Southern District of New York.

In this episode of S&C’s Critical Insights, Michelle Chen, a partner in S&C’s Financial Services Group, and June Hu, special counsel in the Firm’s General Practice Group, provide key takeaways for financial institutions as they navigate environmental, social and governance considerations in 2024. Michelle and June review key ESG developments in 2023, noting a trend of growing divergence in ESG requirements and expectations at the international, federal and state level. This trend creates uncertainty and challenges for financial institutions. In light of the uncertainty and rapid developments in the ESG space, Michelle and June offer practical guidance for financial institutions, including the need to continue to closely monitor the changing ESG landscape and to adopt a coordinated approach to compliance in order to mitigate the risks of fragmented and reactive responses.

In this episode of S&C’s Critical Insights, Senior M&A Partner Frank Aquila and Global Head of M&A Melissa Sawyer discuss major takeaways from M&A in 2023 and potential developments for 2024. While we avoided a recession in 2023, ongoing economic uncertainty, rising interest rates, regulatory headwinds and geopolitical tensions contributed to a second year of falling activity levels in global M&A following 2021’s record-breaking year. M&A deals continued to face scrutiny from antitrust and foreign investment regulators in the United States and globally. In 2023, the EU adopted its new Foreign Subsidies Regulation, and in the United States, the FTC and DOJ proposed changes to the HSR rules and issued Draft Merger Guidelines. Cross-border M&A activity remained significant at $707 billion during the first nine months of 2023, but was down 21 percent compared to a year ago. Geopolitics, sanctions and foreign investment and competition regulation explain some of the trends in cross-border M&A, as investment pivots to align with countries’ political affiliations. Frank and Melissa expect to see more blends of traditional acquisition financing mixed with private credit solutions in 2024. They anticipate a significant uptick in activity this year with an increase in strategic buyers executing on deals, private equity buyers and a rebound in the cross-border deals.

In this episode of S&C’s Critical Insights, Marc Treviño and Melissa Sawyer, Co-Heads of S&C’s Corporate Governance Practice, discuss corporate governance developments and what to expect in 2024. Marc and Melissa explore the ongoing trend of increased shareholder proposals focused on environmental, social and political topics and touch on ESG as it relates to the broader legislative and political climate. ESP-focused shareholder proposals and ESG issues are at the center of a growing web of legislation and government actions at multiple levels. They also note that companies may be looking to implement an officer exculpation provision in 2024.

In this episode of S&C’s Critical Insights, Julie Jordan, Tracy Richelle High and Annie Ostrager, Co-Heads of S&C’s Labor and Employment Group, discuss the Supreme Court’s decision in two consolidated cases against Harvard and the University of North Carolina. The Court held that the schools’ admissions programs—both of which used race as an explicit factor in admissions decisions—violated the Fourteenth Amendment’s Equal Protection Clause and Title VI of the Civil Rights Act of 1964, which prohibits discrimination in education. Julie, Tracy and Annie examine pending employment and contracting cases that may be affected by the Court’s decision, cover related shareholder proposals and offer guidance for employers, including reviewing hiring and promotion processes and procedures to examine whether any decisions are expressly based on race, gender or other protected classes. 

In this episode of S&C’s Critical Insights, Connor Schillerstrom from our Sydney office, John Anselmi from our Melbourne office and Sam Saunders from our New York office discuss how Australia and the United States are working together to address climate change. Connor, John and Sam provide insight on how Australia might benefit from the Australia-United States Climate, Critical Minerals and Clean Energy Transformation Compact, which was formed this year to provide a framework for the countries to work together to reduce the cost of clean energy technologies and lay the foundation for the global clean energy economy. They also discuss the possible designation of Australia as a “domestic source” for purposes of the U.S. Defense Production Act, which would provide benefits to Australian companies operating under certain contracts with the U.S. government. Finally, they provide an overview of loans and tax credits under the U.S. Inflation Reduction Act that are available for Australian companies with critical minerals and clean energy projects in the United States.

In this episode of S&C’s Critical Insights, Melissa Sawyer, Global Head of S&C’s M&A Group, and Joe Matelis, a partner in S&C’s Antitrust Group, discuss how the draft merger guidelines issued by the Department of Justice and Federal Trade Commission may affect M&A deals. Joe, who helped develop the 2010 horizontal merger guidelines that would be replaced by the new guidelines, notes that the new guidelines would create more uncertainty about what kinds of mergers the government is going to choose to challenge. Joe expects that the government is most likely to focus on merger activity by so-called dominant firms that have more than a 30 percent market share, even though a much broader set of concerns is raised in the new guidelines. He also expects that going forward courts may not give as much credence to the new guidelines given their break from prevailing tradition, and thus paradoxically the new guidelines may make it harder for the government to prevail in court. Melissa points out some of the practical ways the draft guidelines might impact M&A deals. Parties would need more advance planning around potential antitrust issues, with hostile and topping bidders in particular needing to create clear plans to obtain timely clearances. She also would expect to see a shift in antitrust risk allocation provisions, including changes in reverse break fees, operating restrictions that apply between signing and closing, and “hell or highwater” clauses.

In this episode of S&C’s Critical Insights, Annie Ostrager and Tracy Richelle High, Co-Heads of S&C’s Labor & Employment Group, discuss the Supreme Court’s June 16 decision in United States ex. rel. Polansky v. Executive Health Resources and implications for qui tam whistleblowers.   The False Claims Act (FCA) authorizes qui tam actions by private parties, called “relators,” who sue on behalf of the United States. The government may intervene and take over litigating the case during the “seal period”—the window at the outset of the action during which the case is sealed. If the government chooses not to intervene, the relator litigates the action. But the government has a right to intervene later for “good cause.” In Polansky, the government chose not to intervene during the seal period, but years later, moved to dismiss the case. The relator argued that the government could not do so because it had not intervened during the seal period. The government responded that it could move to dismiss without intervening at all. The Supreme Court adopted neither position. Instead, it held that the government may move to dismiss over a relator’s objection an FCA action so long as it moved to intervene at some point. Annie and Tracy note that the qui tam provision of the FCA remains a powerful tool for prosecutors to encourage whistleblowers to come forward.  But a relator’s path to success may seem more uncertain after the Court’s decision.

In this episode of S&C’s Critical Insights, Annie Ostrager and Tracy Richelle High, Co-Heads of S&C’s Labor & Employment Group, discuss recent developments in the Securities and Exchange Commission’s whistleblowing program.  The Sarbanes-Oxley Act, as modified by the Dodd-Frank Act, provides protections and incentives for whistleblowers who report potential violations of the securities laws. Dodd-Frank also incentivizes potential informants to come forward by authorizing the SEC to grant awards to whistleblowers. Annie and Tracy discuss two recent amendments by the SEC to its whistleblower program that appear to reflect the agency’s readiness to grant more and larger awards. One authorizes the SEC to make awards for related, non-SEC actions, even if they may be more directly connected to other agencies. The second gives the SEC discretion to grant a larger award in appropriate circumstances. They also discuss two cases recently brought by whistleblowers against the SEC in the Third and Fifth Circuits involving the agency’s denials of whistleblower awards. 

In this episode of S&C’s Critical Insights, associates from our London, Paris and Frankfurt offices—Costanza Posarelli, Matt Triggs, Alexis Madec and Stephan Rauch— discuss  key considerations for carve-out transactions for EU and U.K. businesses, and their recent experience assisting S&C clients with these complex transactions.  In the current economic climate,  many companies are evaluating whether they are deploying their assets in a way that maximizes value, and financial sponsors are open to more complex opportunities. Carve-out transactions, in either an M&A or a spin-off context, can be a particularly attractive option. In either context, there are several considerations to keep in mind, including tax aspects and impacts on financing arrangements for the parent company; the need for third-party consents; the relationship between the carved-out business and parent company going forward; and, if the company opts for a spin-off, the choice of listing venue and potential flowback risks.

In this episode of S&C’s Critical Insights, Jeff Scott and Julia Malkina, Co-Leads of S&C’s Securities Litigation Practice, discuss the Supreme Court’s June 1 decision in Slack Technologies v. Pirani and the potential implications for securities litigation. Slack Technologies went public through a direct listing, which allows existing shareholders to sell their unregistered securities on the first day of public trading at the same time as the company’s registered shares are sold. Slack claimed that the plaintiff in this case lacked standing to sue because he could not trace the purchase of his Slack shares to the registration statement. The issue before the Court was whether Section 11 of the Securities Act of 1933 requires plaintiffs to plead and prove that they purchased securities registered under the registration statement they allege is materially false or misleading. In a win for defendants, the Supreme Court unanimously held that the plaintiffs must plead and prove these facts, reversing the U.S. Court of Appeals for the Ninth Circuit. Jeff and Julia discuss how the ruling reaffirms the longstanding interpretation of Section 11 and note that the Court’s decision could encourage more companies to go public through a direct listing. The ruling might also encourage legislative efforts to improve tracking of the ownership and registration of securities, including through the use of blockchain technology.

In this episode of S&C’s Critical Insights, Inosi Nyatta, Isaac Wheeler and Sam Saunders discuss the unanswered questions about requirements and qualifications for receiving tax credits for clean energy projects under the Inflation Reduction Act (IRA).   The IRA, which was passed in August 2022, is the largest investment in clean energy in U.S. history and  is expected to unleash a new wave of energy transition projects across the United States. It introduced new or enhanced credits for renewable energy, clean electricity investment and production, energy storage, clean hydrogen, electric vehicles, clean technology manufacturing, sustainable fuels and carbon capture.   While the IRA has opened up numerous opportunities for energy transition projects,  there are still a number of uncertainties, including final rules on direct pay and transferability, the potential impact of the OECD’s Pillar Two rules and how debt ceiling discussions may impact availability of IRA tax credits.

In the webinar “Pharmaceutical Deal Outlook: U.S. and European Perspectives,” Frank Aquila, Matt Hurd, Carsten Berrar, Olivier de Vilmorin and Jeremy Kutner discuss the outlook for M&A deals in the sector. The group of partners, who came together from S&C’s New York, Frankfurt, Paris and London offices, focus in particular on outlining how patent law impacts the tenor of mergers and acquisitions, how the regulatory landscape in both the United States and Europe is affecting dealmaking, and the different considerations for acquirers as opposed to sellers.

In this episode of S&C’s Critical Insights, Juan Rodriguez, Co-Head of S&C’s European Competition Group and the Firm’s Antitrust Group, and associate Marielena Doeding discuss the European Court of Justice’s ruling in the Fiat case and its implication for future state aid investigations. This landmark judgment—in which the Court of Justice annulled a General Court judgment and European Commission decision –clarified the parameters under which the Commission may investigate individual tax rulings under state aid rules. Although the judgment reaffirms that the Commission may investigate tax measures for compliance with state aid rules, in doing so, it cannot apply its own version of the arm’s length principle to tax measures; in particular, it cannot apply the arm’s length principle to tax measures in jurisdictions unless – and then only to the extent that – the law of the jurisdiction incorporates that principle. Instead, the Commission must carefully consider national tax rules to assess whether or not a measure confers a selective advantage for state aid purposes. Sullivan & Cromwell represented Fiat in this litigation. 

In this episode of S&C’s Critical Insights, partners Audra Cohen, Frank Aquila and Melissa Sawyer share important updates for dealmakers in the consumer and retail sector following the COVID-19 pandemic. Frank and Melissa discuss the impact of support legislation on various business models and explore how a continued shift in consumer priorities and product availability might change fundamental aspects of future M&A in these industries.

In this episode of S&C’s Critical Insights series, Sergio Galvis, head of the Firm’s Latin America practice, outlines best practices for companies making cross-border acquisitions in view of updates to the FCPA Resource Guide issued by the U.S. Department of Justice and the Securities and Exchange Commission. With increased cooperation by regulators and law enforcement authorities across jurisdictions leading to more enforcement actions, acquirers should reevaluate their due diligence and compliance programs under these guidelines. Sergio addresses topics including: • designing and implementing an effective risk-based due diligence program for M&A, • the benefits of voluntary disclosure to the authorities of potential corruption issues, • the implementation of an effective compliance program, and • the importance of integration and remediation under the guidelines.

In this episode of S&C’s Critical Insights podcast series, Olivier de Vilmorin, head of the Firm’s European M&A practice, discusses the measures proposed by France’s securities regulator, the Autorité des marchés financiers (the “AMF”), concerning shareholder activism. Following a growing number of activist campaigns in France over the past several months, the AMF has clarified its position with pragmatic and constructive proposals to better control excessive behavior in shareholder activism campaigns, without preventing them. Olivier explores how these proposals will improve transparency and dialogue between shareholders and issuers and also strengthen AMF’s response capabilities during activist campaigns.

S&C partners Jim Bromley and Andy Dietderich, the co-heads of our Global Restructuring practice, discuss strategies for boards confronting the “zone of insolvency” during the COVID-19 crisis.

S&C partners Carsten Berrar, Krystian Czerniecki and John Horsfield-Bradbury discuss the impact of the COVID-19 crisis on capital raising in Europe, and how issuers can adjust structures to address the current situation.