Publications Archives

From the Derivatives Practice Group: Rahul Varma was named acting director of the CFTC’s Division of Market Oversight this week and CFTC staff withdrew two advisories.

New Developments

Rahul Varma Named Acting Director of CFTC Division of Market Oversight. On April 2, CFTC Acting Chairman Caroline D. Pham announced Rahul Varma will serve as the Acting Director of the Division of Market Oversight (“DMO”). Varma joined the CFTC in 2013 as an Associate Director for Market Surveillance in DMO, with responsibility for energy, metals, agricultural, and softs markets. In 2017, he helped start the Market Intelligence Branch in DMO and served as its Acting Deputy Director. In 2024, he took on the role of Deputy Director for the combined Market Intelligence and Product Review branches. [NEW]
CFTC Staff Withdraws Advisory on Review of Risks Related to Clearing Digital Assets. On March 28, the CFTC’s Division of Clearing and Risk (“DCR”) announced it is withdrawing CFTC Staff Advisory No. 23-07, Review of Risks Associated with Expansion of DCO Clearing of Digital Assets, effective immediately. As stated in the withdrawal letter, DCR determined to withdraw the advisory to ensure that it does not suggest that its regulatory treatment of digital asset derivatives will vary from its treatment of other products. [NEW]
CFTC Staff Withdraws Advisory on Virtual Currency Derivative Product Listings. On March 28, DMO and DCR announced they are withdrawing CFTC Staff Advisory No. 18-14, Advisory with Respect to Virtual Currency Derivative Product Listings, effective immediately. As stated in the withdrawal letter, DMO and DCR determined that the advisory is no longer needed given additional staff experience with virtual currency derivative product listings and increasing market growth and maturity. [NEW]
ICE and Circle Sign MOU to Explore Product Innovation Based on Circle’s USDC and USYC Digital Assets. On March 27, Intercontinental Exchange Inc. (“ICE”), a leading global provider of technology and data, and Circle Internet Group, Inc. (“Circle”), a global financial technology company and stablecoin market leader, today announced an agreement whereby ICE plans to explore using Circle’s stablecoin USDC, as well as tokenized money market offering US Yield Coin (“USYC”), to develop new products and solutions for its customers. Under the MoU, Circle and ICE plan to collaborate to explore applications for using Circle’s stablecoins and other product offerings within ICE’s derivatives exchanges, clearinghouses, data services, and other markets, to deliver innovation and build new markets and product offerings based on Circle’s products.
Updated FIA Disclosures For New CFTC Rules. On March 24, the FIA announced that is has published updated versions of the FIA Uniform Futures and Options on Futures Risk Disclosures Booklet and FIA Template Disclosures Regarding Separate Accounts for new CFTC rules. Both documents are available in the “Regulatory Disclosures” section of FIA’s US Documentation Library. The CFTC approved new rules in December revising the list of permitted investments for Futures Commissions Merchants (“FCMs”) and DCOs in CFTC Regulation 1.25 (“1.25 Rule”) and codifying no-action relief governing treatment of separate accounts (“Separate Accounts Rule”). The 1.25 Rule requires FCMs and Introducing Brokers to use a revised form of the 1.55 risk disclosure statement for customers onboarded on or after March 31, 2025. The revised disclosure statement reflects the scope of permissible investments, as modified by the 1.25 Rule. The FIA Uniform Futures and Options on Futures Risk Disclosures Booklet is intended to assist FCMs in delivering mandatory customer disclosures under CFTC, exchange and Self-Regulatory Organization rules. Among the disclosures contained in the booklet is the FIA Combined Risk Disclosure Statement. That document has been updated in accordance with the 1.25 Rule to reflect the modified list of permissible investments.
CFTC Staff Issues Interpretation Regarding Financial Reporting Requirements for Japanese Nonbank Swap Dealers. On March 20, the CFTC’s Market Participants Division issued an interpretation concerning financial reporting obligations for nonbank swap dealers subject to regulation by the Financial Services Agency of Japan (“Japanese nonbank SDs”). On July 18, 2024, the CFTC issued a comparability determination and related comparability order granting substituted compliance in connection with the CFTC’s capital and financial reporting requirements to Japanese nonbank SDs, subject to certain conditions in the order (“Japanese Comparability Order”). One of the conditions in the Japanese Comparability Order, condition 9, requires each Japanese nonbank SD to file a copy of its home regulator Annual Business Report with the CFTC and the National Futures Association (NFA). The staff interpretation clarifies that Japanese nonbank SDs may satisfy condition 9 of the Japanese Comparability Order by filing with the CFTC and the NFA certain enumerated schedules of the Annual Business Report (In Scope Schedules), subject to the translation, U.S. dollar conversion, and deadline requirements of condition 9. The interpretation was issued in response to a request from the Securities Industry and Financial Markets Association on behalf of its Japanese nonbank SD members that rely on the Japanese Comparability Order.
SEC’s Division of Corporation Finance Releases Statement on Certain Proof-of-Work Mining Activities. On March 20, the SEC’s Division of Corporation Finance (“Corp Fin”) released a statement providing its views on certain activities on proof-of-work networks known as “mining.” Specifically, the statement addressed the mining of crypto assets that are intrinsically linked to the programmatic functioning of a public, permissionless network, and are used to participate in and/or earned for participating in such network’s consensus mechanism or otherwise used to maintain and/or earned for maintaining the technological operation and security of such network. Corp Fin said that participants in “Mining Activities” (as defined in the statement) do not need to register transactions with the SEC under the Securities Act or fall within one of the Securities Act’s exemptions from registration in connection with these Mining Activities. Commissioner Crenshaw released a related statement, noting that Corp Fin’s statement delivers “neither progress nor clarity” and suffers from issues of flawed logic and limited and imprecise application. Commissioner Crenshaw said that Corp Fin’s statement “leaves us exactly where we started,” because it does not obviate the need for a facts and circumstances application under the investment contract test set forth in SEC v. W.J. Howey Co., 328 U.S. 293 (1946).
CFTC’s Office of Customer Education and Outreach Releases New Advisory on Fraud Using Generative AI. On March 19, the CFTC’s Office of Customer Education and Outreach (the “OCEO”) released a customer advisory that says generative artificial intelligence is making it increasingly easier for fraudsters to create convincing scams. The OCEO advisory describes how fraudsters use AI to create fraudulent identifications with phony photos and videos that can appear very real if one is not familiar with the advances of AI technology. The fraudsters also are using AI to forge government or financial documents. An FBI public service announcement also warns the public about how criminals are using AI to commit fraud and how the technology is being used in relationship investment scams.

New Developments Outside the U.S.

ESMA Consults on Transparency Requirements for Derivatives Under MiFIR Review. On April 3, ESMA asked for input on proposals for Regulatory Technical Standards (“RTS”) on transparency requirements for derivatives, amendments to RTS on package orders, and RTS on input/output data for the over-the-counter (“OTC”) derivatives consolidated tape. ESMA said that it is developing various technical standards further specifying certain provisions set out in the Market in Financial Instruments Regulation Review. The consultation paper covers the following three areas: transparency requirements for derivatives, RTS on package orders, and RTS on input/output data for the OTC derivatives consolidated tape. The consultation will remain open until 3 July 2025. [NEW]
ESMA Publishes Annual Peer Review of EU CCP Supervision CCP Supervisory Convergence. On April 2, ESMA published its annual peer review report on the supervision of European Union (“EU”) Central Counterparties (“CCPs”) by National Competent Authorities (“NCAs”). The peer review measures the effectiveness of NCA supervisory practices in assessing CCP compliance with the European Market Infrastructure Regulation (“EMIR”) requirements on outsourcing and intragroup governance arrangements. ESMA indicated, for this exercise, the review of the functioning of CCP colleges remains overall positive. ESMA also said that the peer review identified the need to promote further supervisory convergence in respect of the definition of major activities linked to risk management. [NEW]
The European Supervisory Authorities Publish Evaluation Report on the Securitisation Regulation. On March 31, the Joint Committee of the European Supervisory Authorities published its evaluation report on the functioning of the EU Securitisation Regulation (SECR). The report purports to put forward recommendations to strengthen the overall effectiveness of Europe’s securitization framework through simplification, while ensuring a high level of protection for investors and safeguarding financial stability. This report identifies areas where the regulatory and supervisory framework can be enhanced, supporting the growth of robust and sound securitization markets in Europe. [NEW]
PRA, FCA Consult on Margin Requirements for Non-centrally Cleared Derivatives. On March 27, the UK Prudential Regulation Authority (“PRA”) and the Financial Conduct Authority published CP5/25 – Margin requirements for non-centrally cleared derivatives: Amendments to BTS 2016/2251. The consultation paper proposes to indefinitely exempt single-stock equity and index options from the bilateral margining requirements in the UK. In addition, it proposes to remove the requirement to exchange initial margin (“IM”) for legacy contracts once a counterparty falls out of scope of the margin requirements. It also proposes to permit UK firms, when transacting with a counterparty subject to the margin requirements in another jurisdiction, to use that jurisdiction’s threshold assessment calculation periods and dates of entry into the scope of IM requirements to determine whether those transactions are subject to IM requirements. [NEW]
MAS Responds to Feedback on Proposed Changes to Capital Framework. On March 27, the Monetary Authority of Singapore (“MAS”) published its response to feedback received to the consultation paper on proposed amendments to the capital framework for approved exchanges and approved clearing houses. The consultation was later extended to licensed trade repositories. MAS’s response addresses liquidity requirements, eligible capital, and total risk requirements. [NEW]
ESMA Makes Recommendations for the Supervision of STS Securitizations. On March 27, ESMA published its Peer Review Report on NCAs supervision of Simple, Transparent and Standardized (“STS”) securitizations. The Report looks into and provides recommendations on the supervisory approaches adopted by selected NCAs when supervising STS securitization transactions and the activities of their originators, sponsors and securitization special purpose entities. The Peer Review focused on the NCAs of France, Germany, Portugal, and the Netherlands.
ESMA Extends the Tiering and Recognition of the Three UK-Based CCPs. On March 17, ESMA announced its decision to temporarily extend the application of the recognition decisions under Article 25 of the EMIR for three CCPs established in the United Kingdom (“UK”). On January 30, 2025, the European Commission adopted a new equivalence decision in respect of the regulatory framework applicable to CCPs in the UK. Subsequently, ESMA has prolonged the tiering determination decisions and recognition decisions for the three recognized UK CCPs – ICE Clear Europe Ltd, LCH Ltd (as Tier 2) and LME Clear Ltd (as Tier 1) – that were adopted by ESMA on September 25, 2020, to align with the expiry date of the new equivalence decision. The application of the tiering determination decisions and recognition decisions is temporarily extended until 30 June 2028.
ESMA and Bank of England Conclude a Revised MoU in Respect of UK-Based CCPs Under EMIR. On March 17, ESMA and the Bank of England (“BoE”) signed a revised Memorandum of Understanding (“MoU”) on cooperation and information exchange concerning the three CCPs established in the UK (ICE Clear Europe Ltd, LCH Ltd and LME Clear Ltd) which have been recognized by ESMA under EMIR. ESMA said that, according to EMIR, one of the conditions for recognition of a third-country CCP (TC-CCP) by ESMA is the establishment of cooperation arrangements between ESMA and the relevant third-country authority. ESMA noted that the revised MoU follows the amendments introduced by EMIR 3 on the requirements concerning the content of such cooperation arrangements, in particular, cooperation in respect of systemically important TC-CCPs (Tier 2 TC-CCPs), and replaces the earlier version that ESMA and the BoE concluded in 2020.

New Industry-Led Developments

IOSCO Issues Final Report on Standards Implementation Monitoring for Regulator Principle. On April 2, IOSCO published a Final Report following its review of IOSCO Standards Implementation Monitoring (ISIM) for Regulator Principles 6 and 7, which address systemic risk and perimeter of regulation. IOSCO’s Objectives and Principles of Securities Regulation 6 and 7 stipulate that regulators should have or contribute to processes to identify, monitor, mitigate and manage systemic risk, as well as have or contribute to a process to review the perimeter of regulation regularly. This ISIM Review by IOSCO’s Assessment Committee found a high level of implementation across the 55 jurisdictions from both emerging and advanced markets. According to IOSCO, the report highlights some good practices and also identifies a few areas where there is room for improvement, observed primarily in some emerging markets. For example, the Report notes that some jurisdictions do not have clear responsibilities, definitions and regulatory processes with respect to systemic risk. [NEW]
ISDA Responds to EC on Amendments to Taxonomy Regulation Delegated Act. On March 26, ISDA and the Association for Financial Markets in Europe submitted a joint response to the EC’s proposed changes to EU Taxonomy Regulation reporting. The associations indicated that they welcome the EC’s commitment in the context of the Omnibus sustainability package to reduce Taxonomy reporting burdens and provide swift relief to reporters. However, they also noted concerns over whether the proposals go far enough to achieve these objectives, opining that they would not provide sufficient reduction in reporting burdens for banks and their clients and they would not achieve meaningful disclosures. The responses sets our specific priority measures for consideration. [NEW]
IOSCO Launches New Alerts Portal to Help Combat Retail Investment Fraud. On March 20, IOSCO announced the launch of the International Securities & Commodities Alerts Network (“I-SCAN”). IOSCO said that I-SCAN is a unique global warning system where any investor, online platform provider, bank or institution can check if a suspicious activity has been flagged for a particular company by financial regulators, which will submit alerts directly to I-SCAN, worldwide. According to IOSCO, I-SCN forms part of IOSCO’s Roadmap for Retail Investor Online Safety, an initiative which was launched in November last year.

The following Gibson Dunn attorneys assisted in preparing this update: Jeffrey Steiner, Adam Lapidus, Marc Aaron Takagaki, Hayden McGovern, and Karin Thrasher.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. Please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm’s Derivatives practice group, or the following practice leaders and authors:

Jeffrey L. Steiner, Washington, D.C. (202.887.3632, jsteiner@gibsondunn.com)

Michael D. Bopp, Washington, D.C. (202.955.8256, mbopp@gibsondunn.com)

Michelle M. Kirschner, London (+44 (0)20 7071.4212, mkirschner@gibsondunn.com)

Darius Mehraban, New York (212.351.2428, dmehraban@gibsondunn.com)

Jason J. Cabral, New York (212.351.6267, jcabral@gibsondunn.com)

Adam Lapidus, New York (212.351.3869, alapidus@gibsondunn.com )

Stephanie L. Brooker, Washington, D.C. (202.887.3502, sbrooker@gibsondunn.com)

William R. Hallatt, Hong Kong (+852 2214 3836, whallatt@gibsondunn.com )

David P. Burns, Washington, D.C. (202.887.3786, dburns@gibsondunn.com)

Marc Aaron Takagaki, New York (212.351.4028, mtakagaki@gibsondunn.com )

Hayden K. McGovern, Dallas (214.698.3142, hmcgovern@gibsondunn.com)

Karin Thrasher, Washington, D.C. (202.887.3712, kthrasher@gibsondunn.com)

Attorney Advertising: These materials were prepared for general informational purposes only based on information available at the time of publication and are not intended as, do not constitute, and should not be relied upon as, legal advice or a legal opinion on any specific facts or circumstances. Gibson Dunn (and its affiliates, attorneys, and employees) shall not have any liability in connection with any use of these materials. The sharing of these materials does not establish an attorney-client relationship with the recipient and should not be relied upon as an alternative for advice from qualified counsel. Please note that facts and circumstances may vary, and prior results do not guarantee a similar outcome.

Graham Valenta and Zain Hassan are the authors of “Reining in the Wild West: A Survey of Carbon Capture Legislation in the United States” [PDF] published by the Texas Journal of Oil, Gas, and Energy Law in its March 2025 issue.

Join us for a 30-minute briefing covering several M&A practice topics. The program is part of a series of quarterly webcasts designed to provide quick insights into emerging issues and practical advice on how to manage common M&A problems. Steve Glover, a partner in the firm’s Global M&A Practice Group, acts as moderator.

Topics discussed:

The FTC’s Decision to Impose a $5.6 Million “Gun Jumping” Penalty
How Buyers Can Mitigate Aiding and Abetting Risk
Reincorporation and the Status of Proposed Delaware Law Changes

MCLE CREDIT INFORMATION:

This program has been approved for credit by the New York State Continuing Legal Education Board for a maximum of 0.5 credit hours in the professional practice category. This course is approved for transitional and non-transitional credit.

Gibson, Dunn & Crutcher LLP certifies this activity is approved for 0.5 hours of MCLE credit by the State Bar of California in the General Category.

Gibson, Dunn & Crutcher LLP is authorized by the Solicitors Regulation Authority to provide in-house CPD training. This program is approved for CPD credit in the amount of 0.5 hours. Regulated by the Solicitors Regulation Authority (Number 324652).

California attorneys may claim self-study credit for viewing the archived webcast. No certificate of attendance is required for self-study credit.

PANELISTS:

Jamie France is a partner in the Washington, D.C. office of Gibson, Dunn & Crutcher and a member of the firm’s Antitrust and Competition Practice Group. Jamie represents clients in antitrust merger and non-merger investigations before the U.S. Federal Trade Commission, U.S. Department of Justice Antitrust Division, state Attorneys General, and international competition authorities, as well as in complex private and government antitrust litigation. She also counsels clients on a range of antitrust merger and conduct matters. Her experience encompasses a broad set of industries, including healthcare, technology, consumer goods, retail, pharmaceuticals, software, gaming, wood products, and chemicals. Jamie has been recognized in the 2024 edition of the Best Lawyers: Ones to Watch® in America for Antitrust Law and Litigation – Antitrust.

Harrison A. Korn is a partner in the Washington, D.C. office of Gibson, Dunn & Crutcher, where he is a member of the firm’s corporate department. Harrison advises public and private companies, private equity firms, boards of directors and special committees in a wide variety of complex corporate matters, including mergers and acquisitions, asset sales and other carve-out transactions, spin-offs, joint ventures, strategic investments and corporate governance matters, including securities law compliance. He also has substantial expertise advising public benefit corporations (PBCs).

Alexander L. Orr is a partner in the Washington, D.C. office of Gibson, Dunn & Crutcher where his practice focuses primarily on mergers and acquisitions. Mr. Orr advises public and private companies, private equity firms, boards of directors and special committees in a wide variety of complex corporate matters, including mergers and acquisitions, asset sales, leveraged buyouts, spin-offs, joint ventures, equity and debt financing transactions and corporate governance matters, including securities law compliance.

Julia Lapitskaya is a partner in the New York office of Gibson Dunn. She is a Co-Chair of the firm’s ESG: Risk, Litigation, and Reporting Practice Group and a member of the firm’s Securities Regulation and Corporate Governance Practice Group. Ms. Lapitskaya’s practice focuses on SEC, NYSE/Nasdaq and Securities Exchange Act of 1934 compliance, securities and corporate governance disclosure issues, corporate governance best practices, state corporate laws, the Dodd-Frank Act of 2010, SEC regulations, shareholder activism matters, ESG and sustainability matters and executive compensation disclosure issues, including as part of initial public offerings and spin-off transactions.

Stephen I. Glover is a partner in the Washington, D.C. office of Gibson, Dunn & Crutcher who has served as Co-Chair of the firm’s Global Mergers and Acquisitions Practice. Mr. Glover has an extensive practice representing public and private companies in complex mergers and acquisitions, joint ventures, equity and debt offerings and corporate governance matters. His clients include large public corporations, emerging growth companies and middle market companies in a wide range of industries. He also advises private equity firms, individual investors and others.

FDA v. Wages & White Lions Investments, LLC, No. 23-1038 – Decided April 2, 2025

Today, the Supreme Court held unanimously that the Food and Drug Administration did not unlawfully change position in denying marketing authorization for flavored e-cigarettes.

“[A] belief about how an agency is likely to exercise its enforcement discretion is not a ‘serious reliance interest.’”

Justice Alito, writing for the Court

Background:

The Family Smoking Prevention and Tobacco Control Act of 2009 (“TCA”) requires the makers of tobacco products to apply for and obtain premarketing authorization before introducing any “new tobacco product” to the market. 21 U.S.C. § 387j(a). In 2016, the FDA issued a rule that deemed e-cigarettes tobacco products subject to the TCA. However, the FDA delayed enforcement for existing e-cigarette products and set a September 2020 deadline for manufacturers to file applications for premarketing authorization. Before that deadline, the FDA issued a proposed rule concerning premarket tobacco product applications, and guidance concerning the types of scientific evidence that would be required for approval and manufacturers’ marketing plans.

Two companies submitted applications seeking approval to market and sell flavored e-liquids for use in e-cigarettes, but the FDA denied the applications because they had not provided sufficient evidence from scientific studies. The FDA did not consider the marketing plans submitted by the companies with their applications.

After the manufacturers sought judicial review, the en banc Fifth Circuit set aside and remanded the FDA’s denial orders. The court held that the FDA’s denial of the companies’ applications under standards different from those articulated in its pre-decisional guidance was arbitrary and capricious, and that the FDA’s failure to consider the companies’ marketing plans was unlawful and prejudicial (not harmless) error.

Issue:

Did the court of appeals err in setting aside and remanding the FDA’s denial orders as arbitrary and capricious?

Court’s Holding:

The FDA’s denial orders were not arbitrary and capricious and did not constitute an unlawful change in position from the FDA’s pre-decisional guidance. Further, the Fifth Circuit applied an incorrect harmless-error standard to the agency’s failure to consider the marketing plans.

What It Means:

The Court largely deferred to the FDA’s decision to deny manufacturer applications for approval to market and sell flavored e-liquids for e-cigarettes. The decision is an example of the Court giving broad latitude to agency action under the arbitrary and capricious standard of review.
The Court clarified the “change-in-position doctrine,” which applies when an agency changes course on a question of law or policy. The Court explained that an agency does not unlawfully change positions where its previous positions were “largely noncommittal” and the agency gives specific reasons for its actions, or where its previous statements do not directly contradict its later actions. Op. 29, 33, 38. The Court further reasoned that a regulated party’s mere “belief about how an agency is likely to exercise its enforcement discretion is not a ‘serious reliance interest.’” Op. 39–40.
The Court also clarified the “tension” between the harmless-error doctrine, under which courts can excuse agency errors that are not prejudicial, and the Chenery doctrine, under which courts may not uphold agency action with alternative reasoning not considered by the agency. Op. 41–46. The Court explained that courts may uphold agency action—and need not remand to the agency—where it is clear that the agency’s error had no bearing on the procedure used or the substance of the decision reached. The Court remanded to the Fifth Circuit to apply that standard in deciding whether the FDA’s failure to consider marketing plans was a harmless error.
The Court declined to address statutory and constitutional challenges to the FDA’s denial orders that were raised for the first time after certiorari was granted. Parties challenging agency action thus should be mindful of the need to preserve statutory and constitutional challenges at all stages of the litigation.

The Court’s opinion is available HERE.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the U.S. Supreme Court. Please feel free to contact the following practice group leaders:

Appellate and Constitutional Law Practice

Thomas H. Dupree Jr. +1 202.955.8547 tdupree@gibsondunn.com	Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com	Julian W. Poon +1 213.229.7758 jpoon@gibsondunn.com
Lucas C. Townsend +1 202.887.3731 ltownsend@gibsondunn.com	Bradley J. Hamburger +1 213.229.7658 bhamburger@gibsondunn.com	Brad G. Hubbard +1 214.698.3326 bhubbard@gibsondunn.com

Related Practice: FDA and Health Care

Jonathan M. Phillips
+1 202.887.3546
jphillips@gibsondunn.com

Gustav W. Eyler
+1 202.955.8610
geyler@gibsondunn.com

John D.W. Partridge
+1 303.298.5931
jpartridge@gibsondunn.com

Related Practice: Administrative Law and Regulatory

Eugene Scalia +1 202.955.8210 escalia@gibsondunn.com	Helgi C. Walker +1 202.887.3599 hwalker@gibsondunn.com	Stuart F. Delery +1 202.955.8515 sdelery@gibsondunn.com
Matt Gregory +1 202.887.3635 mgregory@gibsondunn.com

This alert was prepared by partner Grace Hart and associate Aly Cox.

Medical Marijuana, Inc. v. Horn, No. 23-365 – Decided April 2, 2025

Today, in a 5-4 decision, the Supreme Court held that damages can be available under civil RICO for harm to business or property by reason of a racketeering activity, even when such harm stems from a personal injury.

“[A] plaintiff can seek damages for business or property loss regardless of whether the loss resulted from a personal injury.”

Justice Barrett, writing for the Court

Background:

More than five decades ago, Congress passed the Racketeer Influenced and Corrupt Organizations Act (“RICO”) to bolster efforts to fight organized crime. In addition to imposing criminal penalties for violating RICO, Congress also authorized “any person injured in his business or property by a violation of” RICO to bring a civil suit and recover triple damages. 18 U.S.C. § 1964(c).

Douglas Horn bought Medical Marijuana, Inc.’s hemp-based product after reading that it contained CBD but not THC, the active chemical compound in marijuana. After Horn failed a THC blood test, he was fired from his job as a commercial truck driver. Horn sued under RICO, alleging that the makers of the product had engaged in mail and wire fraud that caused him to suffer injury to his business or property. The district court granted summary judgment to the company, concluding that Horn sought recovery for a personal injury—unwitting consumption of THC—and so did not allege an injury to “business or property.” The Second Circuit reversed, holding that Horn could recover under RICO because his lost employment is an injury to business even if it flowed from a personal injury.

Issue:

Whether RICO’s civil-action provision permits recovery for injuries to “business or property” resulting from personal injuries.

Court’s Holding:

Yes. Injuries to business or property resulting from personal injuries can be recovered under RICO’s civil-action provision.

What It Means:

The Court interpreted the phrase “injured in his business or property” in RICO’s civil-action provision as “not preclud[ing] recovery for all economic harms that result from personal injuries.” Op. 19. Thus, injuries to business or property flowing from a personal injury may be recoverable under 18 U.S.C. § 1964(c).
The Court took pains to emphasize the narrowness of its decision: “The only question we address is the one squarely before us: whether civil RICO bars recovery for all business or property harms that derive from a personal injury.” Op. 5. The Court expressed no views on whether respondent suffered an antecedent personal injury at all, whether the term “business” includes “employment,” or whether an injury to “property” includes “all pecuniary loss.” Op. 4–5. The Court left these issues for another day.
In response to the dissent’s concern that today’s decision would “eviscerate RICO’s ‘business or property’ limitation,” the Court highlighted several guardrails that constrain civil RICO claims: (1) the requirement that there be “some direct relation between the injury asserted and the injurious conduct,” (2) the requirement that civil RICO plaintiffs establish a pattern of racketeering activity, and (3) the possibility that “business” does not “encompass every aspect of employment” or that “property” does not include “every penny in the plaintiff’s pocketbook.” Op. 17–18.

The Court’s opinion is available HERE.

Appellate and Constitutional Law Practice

Thomas H. Dupree Jr. +1 202.955.8547 tdupree@gibsondunn.com	Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com	Julian W. Poon +1 213.229.7758 jpoon@gibsondunn.com
Lucas C. Townsend +1 202.887.3731 ltownsend@gibsondunn.com	Bradley J. Hamburger +1 213.229.7658 bhamburger@gibsondunn.com	Brad G. Hubbard +1 214.698.3326 bhubbard@gibsondunn.com

Related Practice: Litigation

Reed Brodsky +1 212.351.5334 rbrodsky@gibsondunn.com	Trey Cox +1 214.698.3256 tcox@gibsondunn.com	Theane Evangelis +1 213.229.7726 tevangelis@gibsondunn.com
Helgi C. Walker +1 202.887.3599 hwalker@gibsondunn.com

This alert was prepared by associates Elizabeth A. Kiernan and Bryston Gallegos.

Branden Berns and Ryan Murr are the authors of “The Current Landscape of Reverse Mergers: An In-Depth Analysis and Q&A” [PDF] published by DealLawyers.com.

We are pleased to provide you with the March edition of Gibson Dunn’s digital assets regular update. This update covers recent legal news regarding all types of digital assets, including cryptocurrencies, stablecoins, CBDCs, and NFTs, as well as other blockchain and Web3 technologies. Thank you for your interest.

ENFORCEMENT ACTIONS

UNITED STATES

SEC Drops Ripple Appeal
On March 25, Ripple Labs CLO Stuart Alderoty announced that the company will pay the SEC a $50 million civil penalty to resolve the agency’s enforcement action, and the agency and company will each drop their appeals of an adverse decision in the district court. The SEC brought the action initially in 2020. Last year, U.S. District Judge Analisa Torres ruled that secondary sales and other distributions of XRP are not securities transactions but ordered Ripple to pay $125 million for failing to register institutional sales of the XRP token, which she held were securities transactions. The SEC and Ripple cross-appealed these decisions to the Second Circuit. Law360; CoinDesk; Reuters.
DOJ Dismisses BitClout Crypto Fraud Case
Federal prosecutors have dropped their fraud case against the founder of crypto project BitClout, whom they had accused of defrauding a venture capital firm by misleading investors. According to a joint filing by the SEC and BitClout’s founder Nader Al-Naji, the SEC is also considering dropping a parallel action against Al-Naji. The Department of Justice’s order did not give a reason for the dismissal. Law360; Order Dismissing Criminal Complaint; Joint Letter.
DOJ Disrupts and Takes Down Russian Cryptocurrency Exchange and Indicts Foreign Nationals
On March 7, the DOJ announced that in coordination with German and Finnish law enforcement, it has taken down the online infrastructure of Garantex, a cryptocurrency exchange allegedly used to facilitate money laundering for transnational criminal organizations and sanctions violations. The coordinated action seized Garantex’s domain names and servers and froze over $26 million in funds. DOJ alleged that Garantex has processed at least $9 billion in cryptocurrency transactions since April 2019 and was operated by Lithuanian resident Alksej Besciokov and Russian national Aleksandr Mira Sera, who have been indicted for money laundering conspiracy and other charges that carry maximum penalties of 20+ years in prison. According to a subsequent news story, Besciokov was later arrested in India. DOJ Press Release; BBC.
Brooklyn Man Sentenced to 45 Months in Prison for $2M Crypto Fraud
On March 13, Thomas John Sfraga was sentenced by Judge Frederic Block of the Eastern District of New York to 45 months in prison and was ordered to pay $1,337,700 in forfeiture, with restitution pending. Allegedly posing as a serial entrepreneur, Sfraga allegedly solicited more than $2 million in investments from at least 17 victims for fake property flips and cryptocurrency ventures, promising returns up to 60% in three months. Sfraga then used such funds for personal expenses and to repay earlier victims. Press Release; Sentencing Memorandum.
Cryptocurrency Founder Convicted of Wire Fraud and Money Laundering
On March 12, Rowland Marcus Andrade, the founder and CEO of NAC Foundation, was convicted at trial of fraud and money laundering in the Northern District of California. By promoting a cryptocurrency, AML Bitcoin, Andrade allegedly defrauded tens of thousands of investors of over $10 million through making false statements about the AML Bitcoin’s technology and its business deals. He allegedly diverted over $2 million for personal use and laundered funds through multiple accounts. Andrade’s sentencing is scheduled on July 22. He faces up to 30 years in prison and potential forfeiture of all assets traceable to the crimes. Press Release; Law360.
Russian Cryptocurrency Manipulator Pleads Guilty and Forfeits $23 Million
On March 21, Aleksei Andriunin, a Russian founder of a market-making service company, and that company, Gotbit Consulting LLC, pleaded guilty in Massachusetts federal court. Andriunin and Gotbit both pled guilty to charges of conspiracy to commit market manipulation, and wire fraud, and agreed to forfeit $23 million in cryptocurrency. Andriunin allegedly developed codes to artificially inflate trading volume in order to list cryptocurrency on larger exchanges and has gained tens of millions of dollars through his fraudulent services. Gotbit Plea Agreement; Andriunin Plea Agreement; Law360.
SEC Closes Investigation into Crypto.com
On March 27, Crypto.com announced that it was informed by the SEC that the SEC ended its investigation into the company with no enforcement action. According to Crypto.com, it received a Wells notice from the SEC in August 2024, alleging that the company acted as an “unregistered broker-dealer and securities clearing agency under the federal securities laws.” In October 2024, Crypto.com filed a complaint seeking declaratory and injunctive relief against the SEC. Press Release; Complaint.
President Trump Pardons BitMEX Founders
On March 27, President Trump granted pardons to four former executives of the BitMEX global cryptocurrency exchange, as well as HDR Global Trading Limited, the entity that owned and operated BitMEX, all of which had pled guilty to violating the Bank Secrecy Act. The former executives, Arthur Hayes, Benjamin Delo, Samuel Reed and Gregory Dwyer, had received criminal sentences of probation and fines of more than $30 million for willfully failing to maintain anti-money laundering and know-your-customer programs. HDR had been sentenced to a $100 million fine in addition to its previous $100 million no-admit no-deny settlements with CFTC and FinCEN due to compliance failures. Pardons; Law360.

INTERNATIONAL

FCA Announces Sentencing of Individual for Unregistered Crypto-Asset Activity
On February 28, the UK Financial Conduct Authority announced that it has secured a four-year sentence for an individual for illegally operating crypto ATMs. The individual allegedly operated crypto ATMs at 28 different locations across the UK, despite being refused an FCA license for his business in 2021 due to concerns over compliance with regulations. This is the first sentence for unregistered crypto-asset activity in the UK. FCA Press Release.

REGULATION AND LEGISLATION

UNITED STATES

SEC Says Cryptocurrency Mining Doesn’t Trigger Securities Laws
On March 20, the SEC’s Division of Corporation Finance confirmed in a statement that cryptocurrency mining activities, including both self-mining and mining pools, do not involve the offer and sale of securities, and thus do not require registration or exemption under securities laws. Under the previous administration, SEC has declared that proof-of-stake blockchains fall under the regulation of securities laws. SEC Statement.
CFTC Withdraws Two Staff Advisories to Ease Crypto Oversight
On March 28, the CFTC announced its withdrawal of two staff advisories that imposed extra scrutiny on the clearing and trading of digital-asset derivatives, aiming to align the regulatory treatment of these products with other derivatives under its jurisdiction. The CFTC stressed that the same listing standards and risk-management principles still apply to all derivative products, and that the withdrawal would not affect its oversight of clearing and systemic risk. Press Release; Bloomberg.
In Bipartisan Votes, Congress Votes to Overturn Crypto Tax Reporting Rule
In a significant victory for the crypto industry, Congress has passed a joint resolution under the Congressional Review Act that will repeal a Treasury Department and IRS rule that would have subjected DeFi participants to onerous tax-reporting requirements for digital-asset transactions (DeFi Broker Rule). On March 11, the House voted 292-131 to pass the resolution, which was then passed by the Senate with a 70-28 vote on March 26. Once signed into law by President Trump, the resolution will not only effectively repeal the DeFi Broker Rule, but also will prohibit Treasury and the IRS from issuing a new rule that is “substantially the same” as the repealed rule absent new legislation. The resolution will not repeal the IRS’s July 2024 broker rule applicable to custodial digital asset trading platforms. Joint Resolution; Law360; CoinDesk; Cointelegraph.
Trump Order Establishes Strategic Bitcoin Reserve, and States Consider Doing the Same
On March 6, President Trump signed an Executive Order to establish a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile. The order aims to position to United States as a leader in digital-asset strategy. The reserve will be funded with Bitcoin finally forfeited in criminal or civil proceedings and will not be sold, akin to a “digital Fort Knox” according to newly appointed “crypto czar,” David Sacks. Texas soon followed suit on March 6 when the Texas Senate passed S.B. 21, which would establish the Texas Strategic Bitcoin Reserve and allow the state to invest public money into digital assets. The bill is waiting to be voted by the House. Similarly, on March 5, New Hampshire’s H.B. 302, which would allow the state to invest up to 5% of state funds into bitcoin and other assets, was passed by the House committee and is pending for a full floor vote. Executive Order; White House Fact Sheet; Texas S.B. 21; New Hampshire H.B. 302.
Senate Banking Committee Votes to Advance Stablecoin Bill
On March 13, a bipartisan group of senators in the Senate Banking Committee, led by Senator Bill Hagerty (R-Tenn), voted to advance the “GENIUS Act” (Guiding and Establishing National Innovation for US Stablecoins) to the Senate. The Act aims to create a regulatory framework for stablecoins, defining when issuers fall under state or federal oversight. Senator Elizabeth Warren (D-Ma) expressed concern over the bill, cautioning that it could allow tech billionaires like Elon Musk to issue their own currencies to compete with the US dollar. The Block.
OCC Clarifies Certain Crypto Activities are Permissible for Banks
In an Interpretive Letter issued on March 7, the OCC reaffirmed that banks may engage in certain cryptocurrency-related activities, including crypto-asset custody, stablecoin transactions, and participation in independent node verification networks. The Letter removes existing requirements for banks to obtain supervisory nonobjection before engaging in such activities. According to Rodney Hood, the acting Chief of the OCC, the agency intends to align the regulations of novel and traditional bank activities. Interpretive Letter; Press Release.
FDIC Allows Banks to Engage in Crypto Activities without Prior Approval
On March 28, the FDIC issued a Financial Institution Letter clarifying that banks may engage in permissible activities without prior FDIC approval, as long as they manage the risks. The FDIC will coordinate with the President’s Working Group on Digital Asset Markets and the other banking agencies to issue further guidance or regulations. Press Release.
Tim Scott (R.-S.C.) Introduces FIRM Act Aimed at Debanking
On March 6, Senate Banking Chair Tim Scott introduced the Financial Integrity and Regulation Management (FIRM) Act to address concerns about the debanking of certain companies, particularly in the crypto industry. The bill aims to eliminate the use of reputational risk as a component of regulatory supervision, which Scott argues has been misused by federal regulators to carry out political agendas. The bill has passed out of the Senate Banking Committee and will next move to the Senate for a vote. Bill; Press Release; Axios.
OCC Ceases Examinations for Reputational Risk
On March 20, the OCC issued a statement that it will no longer examine national banks for reputational risk and is removing references to reputational risk from its Handbook and guidance issuances. Certain crypto companies have previously argued that examinations focused on reputational risk contributed to banks refusing to open accounts or otherwise work with crypto companies. This action indicates that the OCC may be seeking to ease the compliance path for banks engaging with crypto businesses. Press Release; Law360; Coindesk;
SEC Acting Chairman Directs Staff to Reexamine Proposed Crypto Custody Rule
During a March 17 speech, the SEC’s Acting Chairman, Mark Uyeda, said that the SEC is considering modifying or eliminating a crypto custody rule proposed by the prior administration that would have required registered investment advisors to custody digital assets with a qualified custodian, among other things. Given the concerns expressed by commenters, Uyeda said, “there may be significant challenges to proceeding with the original proposal.” Uyeda said that he had directed SEC staff to work with the SEC’s new crypto task force to “consider appropriate alternatives.” The Block; Reuters.
Nebraska Enacts New Law to Prevent Crypto ATM Fraud
On March 12, Nebraska Governor Jim Pillen signed into law legislation requiring kiosk operators to be licensed and make adequate disclosures to customers including warnings about crypto fraud. The law was passed after the U.S. Federal Trade Commission pointed out in a September report that there has been a massive increase in consumer losses due to scams involving Bitcoin ATMs. The Block.

INTERNATIONAL

Japanese Ruling Party Considers Slashing Crypto Capital Gains Tax Rate
On March 6, Japan’s ruling Liberal Democratic Party (LDP) proposed reducing the crypto capital-gains tax rate from a maximum of 55% to 20% and is seeking public feedback until March 31. The proposal aims to reclassify cryptocurrencies as “financial products” under a new regulatory framework, which would introduce a separate 20% tax rate similar to securities investments. The LDP’s proposal also includes deferring taxes on crypto-to-crypto swaps until the crypto is exchanged for fiat currency. CoinTelegraph; The Block.
South Korea Plans to Publish Institutional Cryptocurrency Investment Guideline
On March 12, following its statement in January that it would gradually lift the de facto ban on institutional investment in cryptocurrencies, the Financial Services Commission (FSC) of South Korea announced its plan to issue a two-phase guideline. The first part will be released in April to establish the framework and address anti-money-laundering issues. The second part, scheduled in the third quarter, will cover comprehensive instructions for public companies and professional investors. Coin Edition; The Block; Binance.
Bank of Russia Submits Proposal to Allow Cryptocurrency Investment by Selected Investors
On March 12, the Bank of Russia announced a proposal to allow “limited circle of Russian Investors” to trade cryptocurrency under a special experimental legal regime for three years, despite the country’s current ban on cryptocurrency to be used as payments. Eligible investors include those with securities and deposits exceeding 100 million rubles ($1.14 million) or with income for the past year exceeding 50 million rubles ($570K). Yahoo Finance; CoinTelegraph.
Dubai Financial Services Authority Seeks Expressions of Interest for Tokenization Regulatory Sandbox
On March 17, the Dubai Financial Services Authority invited firms to express interest in participating in its Tokenization Regulatory Sandbox, with submissions due by 24 April 2025. The initiative, part of the DFSA’s Innovation Testing Licence program, allows firms to test tokenized investment products and services in a controlled environment. The sandbox aims to facilitate a regulatory pathway from experimentation to full authorization. DFSA.
Dubai Virtual Assets Regulatory Authority Issues Reminder on AML/CFT Compliance for Virtual Asset Service Providers
On February 25, the Dubai Virtual Assets Regulatory Authority issued a compliance reminder to cryptocurrency companies in Dubai, including those operating in mainland and free zones, reminding them of their obligations under the UAE’s anti-money-laundering and combating the financing of terrorism framework. The circular also included a reminder for VASPs to adhere to the Travel Rule for transfers exceeding AED 3,500, ensuring that originator and beneficiary information is obtained, stored, and made available upon request. VARA.
EU Commission Publishes Regulations on Notification of Intention to Provide Crypto-Asset Services Under Markets in Crypto-Asset Regulations
On February 20, the EU Commission published two regulations to supplement the Regulation on Markets in Crypto-Assets ((EU) 2023/1114) (MiCA) in the Official Journal of the European Union. Regulation 2025/303 supplements MiCA by specifying the information to be included by certain financial entities in the notification of their intention to provide crypto-asset services, while Regulation 2025/304 supplements MiCA by laying down implementing technical standards with regard to standard forms, templates and procedures for the notification by certain financial entities of their intention to provide crypto-asset services. Both regulations came into force on March 12. Commission Delegated Regulation (EU) 2025/303; Commission Implementing Regulation (EU) 2025/304.
European Securities and Markets Authority Publishes Official Translations of its Guidelines on the Procedures and Policies Applicable to Transfer Services for Crypto-Assets
On February 26, the European Securities and Markets Authority (ESMA) published the official translations of its guidelines on the procedures and policies in the context of transfer services for crypto-assets. The guidelines apply to competent authorities and to crypto-asset service providers that provide transfer services for crypto-assets on behalf of clients within the meaning of Article 3(1)(26) of MiCA. They are intended to establish consistent, efficient and effective supervisory practices and to ensure the common, uniform and consistent application of the provisions in Article 82 of MiCA. The guidelines apply from 27 April 2025 (that is, 60 calendar days after the date of publication of the official translations on ESMA’s website). ESMA.
Monetary Authority of Singapore Responds to Parliamentary Question on Tightening of Regulations for Digital Payment Token Service Providers
On March 5, the Monetary Authority of Singapore (MAS) responded to a Parliamentary Question on the Singapore Government’s key considerations in deciding to tighten regulations for Digital Payment Token Service Providers including the prohibition of payments via locally issued credit cards. Minister of State Alvin Tan, speaking on behalf of Deputy Prime Minister and Chairman of the MAS, Gan Kim Yong, noted in his response that MAS continues to view cryptocurrencies as highly volatile and unsuitable for the general public. Using credit cards to buy them can lead to high-interest debt and compounded losses, therefore MAS prohibits digital payment token service providers from offering credit or leverage to retail customers. MAS Oral Reply.

CIVIL LITIGATION

UNITED STATES

Treasury Lifts Sanctions Against Tornado Cash
On March 21, the Department of Treasury removed the economic sanctions against Tornado Cash. Treasury soon filed a notice requesting briefing on mootness in Van Loon v. Department of the Treasury, which is on remand after the Fifth Circuit held that Treasury exceeded its statutory authority in designating Tornado Cash. On March 24, the plaintiffs responded, arguing the case is not moot and asking the court to enter final judgment. August 2022 Press Release; March 2025 Press Release; Treasury Notice; Plaintiff Response; CoinTelegraph.
Delaware Bankruptcy Court Grants Three Arrows Capital’s Amended $1.5B Claim in FTX Bankruptcy
On March 13, Judge John T. Dorsey held that liquidators for hedge fund Three Arrows Capital could amend its original complaint to bring a $1.53 billion bankruptcy claim in the FTX Trading Ltd. bankruptcy, over the objection of FTX. The Court held that the Three Arrows Capital liquidators did not learn until more than a year after filing the initial claim in June 2023 that Three Arrows had $1.53 billion in assets on the FTX platform. Because their initial claim was based on limited information, the liquidators were within their rights to amend the claim once more details became available. Opinion; Law360.
Western District of Texas Enters Default Judgment a gainst Bancor DAO
On March 13, Judge Robert Pitman of the Western District of Texas issued a default judgment against Bancor DAO, which operates the decentralized finance platform Bancor, after it failed to respond to a January 2024 online summons. The default judgment stems from a class-action lawsuit involving investors’ claims that they lost tens of millions of dollars due to Bancor’s allegedly failure to warn about liquidity issues during a 2022 withdrawal spike and its allegedly deceptive practices regarding claims that Bancor’s token was an unregistered security. CoinTelegraph; Law360.

SPEAKER’S CORNER

UNITED STATES

SEC Moves Quickly to Remake Crypto Policy
The SEC is actively working with the crypto industry to develop policy for overseeing digital-asset transactions. At the agency’s first crypto-focused roundtable on March 21, SEC commissioners assured attendees they are “earnestly” seeking to find a “workable framework.” The panel featured industry advocates and critics. Commissioner Hester Peirce indicated that non-fungible tokens may be the subject of the SEC’s next staff statement. On March 25, SEC announced four more roundtables between April to June, covering topics including crypto-trading regulation, crypto custody, tokenization and DeFi. All roundtables will be open to the public. Coindesk; Press Release.
OCC Chief Voices Opposition to Debanking and Support to Crypto and Fintech
On March 18, at the Consumer Bankers Association’s annual conference, the acting chief of the OCC, Rodney Hood, expressed his opposition to debanking and emphasized his commitment to reduce regulatory burdens on community banks, foster financial inclusion, and promote bank-fintech collaboration. Hood believes all customers should have fair access to financial services, including digital assets. According to Hood, the OCC will not interfere with bank’s account decisions or create hurdles to discourage banks from creating accounts with individualized risks. This signals a shift of OCC regulatory priorities since the new administration, as regulators used to caution banks against involving with cryptocurrency during the last administration. Law360.

OTHER NOTABLE NEWS

Crypto Leaders Meet at White House for First-of-its-Kind Crypto Summit
On March 7, President Donald Trump hosted the first “crypto summit” at the White House, gathering over two dozen leaders from the U.S. cryptocurrency industry. In the remarks given at the summit, President Trump reaffirmed his support for the growth of the crypto industry and emphasized that the United States should “stay in the front of this one” to secure its leading role in the global financial system. President Remarks; Reuters.
Ripple-Funded Non-Profit Launches
On March 5, the National Cryptocurrency Association (NCA), a new non-profit organization aimed at enhancing crypto literacy launched. NCA was seeded with $50 million in funding from Ripple and Ripple CLO, Stuart Alderoty, and aims to demystify cryptocurrency and provide resources for users, including educational materials and real-life stories. Business Wire; CoinDesk.

The following Gibson Dunn lawyers contributed to this issue: Jason Cabral, Kendall Day, Jeff Steiner, Sara Weed, Sam Raymond, Nick Harper, Raquel Alexa Sghiatti, Simon Moskovitz, Apratim Vidyarthi, and Gabriela Li.

FinTech and Digital Assets Group Leaders / Members:

Ashlie Beringer, Palo Alto (+1 650.849.5327, aberinger@gibsondunn.com)

Michael D. Bopp, Washington, D.C. (+1 202.955.8256, mbopp@gibsondunn.com

Stephanie L. Brooker, Washington, D.C. (+1 202.887.3502, sbrooker@gibsondunn.com)

Jason J. Cabral, New York (+1 212.351.6267, jcabral@gibsondunn.com)

Ella Alves Capone, Washington, D.C. (+1 202.887.3511, ecapone@gibsondunn.com)

M. Kendall Day, Washington, D.C. (+1 202.955.8220, kday@gibsondunn.com)

Sébastien Evrard, Hong Kong (+852 2214 3798, sevrard@gibsondunn.com)

William R. Hallatt, Hong Kong (+852 2214 3836, whallatt@gibsondunn.com)

Martin A. Hewett, Washington, D.C. (+1 202.955.8207, mhewett@gibsondunn.com)

Sameera Kimatrai, Dubai (+971 4 318 4616, skimatrai@gibsondunn.com)

Michelle M. Kirschner, London (+44 (0)20 7071.4212, mkirschner@gibsondunn.com)

Stewart McDowell, San Francisco (+1 415.393.8322, smcdowell@gibsondunn.com)

Hagen H. Rooke, Singapore (+65 6507 3620, hhrooke@gibsondunn.com)

Mark K. Schonfeld, New York (+1 212.351.2433, mschonfeld@gibsondunn.com)

Orin Snyder, New York (+1 212.351.2400, osnyder@gibsondunn.com)

Ro Spaziani, New York (+1 212.351.6255, rspaziani@gibsondunn.com)

Jeffrey L. Steiner, Washington, D.C. (+1 202.887.3632, jsteiner@gibsondunn.com)

Eric D. Vandevelde, Los Angeles (+1 213.229.7186, evandevelde@gibsondunn.com)

Benjamin Wagner, Palo Alto (+1 650.849.5395, bwagner@gibsondunn.com)

Sara K. Weed, Washington, D.C. (+1 202.955.8507, sweed@gibsondunn.com)

We are pleased to provide you with the March edition of Gibson Dunn’s monthly U.S. bank regulatory update. Please feel free to reach out to us to discuss any of the below topics further.

KEY TAKEAWAYS

Federal Reserve Board Governor Michelle Bowman was nominated as the next Vice Chair for Supervision.
Debanking and reputational risk remain a focus:
- The Office of the Comptroller of the Currency (OCC) announced that it “will no longer examine its regulated institutions for reputation risk” and is “removing references to reputation risk from its Comptroller’s Handbook booklets and guidance issuances.”
- Federal Deposit Insurance Corporation (FDIC) Acting Chairman Travis Hill stated in a letter to House Financial Services Committee member Rep. Dan Meuser (R-PA) that the FDIC plans to “eradicate” reputational risk (or similar terms) from its regulations, guidance, examination manuals and other policy documents.
- The OCC’s and FDIC’s announcements follow Chair Powell’s commitment to the Senate Banking Committee during his February testimony to “revise the Federal Reserve’s supervision manuals to remove reputational risk.”
- The Senate Banking Committee voted to advance out of committee by a 13-11 vote the Financial Integrity and Regulation Management (FIRM) Act, which would eliminate reputational risk as a bank supervisory component.
The federal banking agencies and Congress began taking steps to revisit their approach to digital asset- and blockchain-related activities:
- The OCC announced that a range of crypto-related activities are permissible for national banks and federal savings associations and rescinded the requirement that OCC-supervised institutions receive supervisory nonobjection and demonstrate that they have adequate controls in place before they can engage in such crypto-related activities.
- The FDIC rescinded Financial Institution Letter (FIL) 16-2022 and clarified that FDIC-supervised institutions may engage in permissible crypto-related activities without prior FDIC approval.
- The Senate Banking Committee voted to advance out of committee by an 18-6 vote the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act of 2025.
The FDIC Board commenced acting on priorities outlined by Acting Chairman Travis Hill in his January 2025 statement.
- The FDIC Board approved a proposal to rescind the FDIC’s 2024 Statement of Policy on Bank Merger Transactions and reinstate the prior Statement of Policy on Bank Merger Transactions on an interim basis while the FDIC reevaluates its bank merger review process.
- The FDIC Board also withdrew three proposed rulemakings relating to brokered deposits, corporate governance, and the Change in Bank Control Act and withdrew authority for staff to publish in the Federal Register a proposed rule related to incentive-based compensation arrangements.
The federal banking agencies announced their intent to both rescind the 2023 Community Reinvestment Act (CRA) final rule and reinstate the CRA framework that existed prior to the October 2023 final rule.

DEEPER DIVES

Federal Reserve Board Governor Michelle Bowman Nominated as Next Vice Chair for Supervision. On March 17, 2025, the White House announced the nomination of Federal Reserve Board Governor Michelle Bowman as the next Vice Chair for Supervision following Governor Barr’s resignation from the same position effective February 28, 2025. Bowman has served on the Board of Governors since November 26, 2018, and her current term ends January 31, 2034. She was the first person to fill the community bank seat on the Board of Governors required by the Terrorism Risk Insurance Program Reauthorization Act of 2015, which amended Section 241 of the Federal Reserve Act. Bowman would serve in her role as Vice Chair for Supervision for a term of four years. Bowman’s nomination generally was met with support from industry trade groups and Republican leadership.

Insights. Since joining the Board of Governors, Governor Bowman has been consistent in her messaging for the need for appropriately tailored regulation; more transparency in bank supervision and bank application processes; increased focus on safety and soundness, as opposed to operational risk; and a comprehensive review and modernization of banking laws (see, e.g., ABA’s Conference for Community Bankers (Feb. 17, 2025); “Bank Regulation in 2025 and Beyond“ (Feb. 5, 2025); California Bankers Association (Jan. 9, 2025)). Most recently, on March 21, 2025, Governor Bowman issued a statement in connection with the approval of a branch application by Commonwealth Business Bank. In her statement, Governor Bowman noted the need for change to the Federal Reserve’s review of applications, noting that one single adverse comment resulted in a branch application normally acted upon under delegated authority being sent to the Board of Governors for review and approval, resulting in a six-month review and approval process. In the past, Governor Bowman has been an active dissenter on a board known for its desire for consensus—in the past three years and 2025, she has dissented to at least nine proposed or final rulemakings or supervisory guidance releases, including the Basel III endgame proposal, the proposal to amend the Bank Secrecy Act Compliance Program Rule, proposed revisions to interchange fees, climate-related guidance, resolution planning, CRA, the long-term debt proposal and third-party risk management guidance, often along the same lines she consistently echoes in her public statements (e.g., the need for tailoring and right-sizing, reducing complexity, rationalization and the need to avoid duplicative regulations).

Regulators and Lawmakers Take Steps to Remove Reputational Risk as a Supervisory Component. Leadership of the OCC and FDIC have committed to removing reputational risk considerations from their supervisory and regulatory toolboxes. On March 20, 2025, the OCC announced that it “will no longer examine its regulated institutions for reputation risk” and is “removing references to reputation risk from its Comptroller’s Handbook booklets and guidance issuances,” and on March 24, 2025, FDIC Acting Chairman Travis Hill indicated that the FDIC plans to “eradicate” reputational risk from its regulations, guidance, examination manuals and other policy documents. In addition, the Financial Integrity and Regulation Management Act (FIRM), co-sponsored by every Republican on the Senate Banking Committee, advanced out of committee. The FIRM Act is aimed to prohibit debanking for reputational risk concerns. The bill would require the bank regulatory agencies to report to Congress on their elimination of reputational risk as a component of supervision, as well as prohibit federal agencies from making new rules or guidance that includes reputational risk as a supervisory factor.

Insights. Although the focus on reputational risk stems from the administration’s efforts to curtail “debanking” of certain industries, institutions should anticipate that entry into the traditional banking sector may still be subject to hurdles because banks are not relieved of the burden on ensuring they are operating in a safe and sound manner and are not facilitating illegal or unlicensed activities. From a bank perspective, this will continue to require robust due diligence inquiries in order to address core risk assessments, like credit risk, market risk and legal and compliance risk, as banks increase their relationships in and exposure to certain markets – e.g., the digital assets space.

OCC and FDIC Clarify Bank Authority to Engage in Certain Crypto-Related Activities. On March 7, 2025, the OCC announced that “a range of cryptocurrency activities are permissible in the federal banking system.” OCC Interpretive Letter No. 1183 formally reaffirms interpretive letters issued during the prior Trump administration authorizing banks to provide crypto-asset custody services, hold dollar deposits serving as reserves backing stablecoins, and use digital assets to perform traditional bank-permissible activities, like payment activities. Interpretive Letter No. 1183 also rescinds OCC Interpretive Letter No. 1179, which required banks to receive supervisory nonobjection prior to engaging in crypto-related activities. Interpretive Letter No. 1183 reminds banks that any crypto-asset activities, like any other activities, must be conducted in a safe, sound, and fair manner and in compliance with applicable law. The OCC also withdrew its participation in joint statements on crypto-asset risks to banking organizations and liquidity risks resulting from crypto-asset market vulnerabilities.

On March 28, 2025, the FDIC followed suit, providing new guidance to FDIC-supervised banks engaging or seeking to engage in crypto-related activities. The FDIC rescinded FIL-16-2022, providing that FDIC-supervised institutions may engage in permissible crypto-related activities without receiving prior FDIC approval.

Insights. As we have previously highlighted, the federal banking agencies continue to signal increased receptivity to crypto-related activities and digital assets. Coupled with the GENIUS Act’s progression out of the Senate Banking Committee, the OCC’s and FDIC’s actions very clearly illustrate an appetite to further develop U.S. stablecoin and other digital assets offerings. Institutions considering new activity in the digital assets space should ensure both appropriate individualized risk assessments and requisite adaptation of control programs, but the current environment presents an opportunity for leaders in this space to work collaboratively with the OCC, FDIC and other agencies to align on practical and prudent expectations.

FDIC Board Begins Implementing Acting Chairman Hill’s Regulatory Priorities. Upon assuming his role, Acting Chairman Hill announced more than a dozen matters or topics that he expected the FDIC to address in short order. Since that time, the FDIC has made substantial headway in furtherance of a number of Acting Chairman Hill’s priorities (see above).

Insights. Given Acting Chairman Hill’s speedy pursuit of a number of regulatory and supervisory priorities, we expect the FDIC to similarly swiftly act on Hill’s remaining priorities. In addition to further action consistent with broad identified goals, like “[c]onduct[ing] a wholesale review of regulations, guidance, and manuals” and encouraging more de novo activity, the FDIC appears poised to take on some of the more specific priorities. This includes (1) modernizing implementation of the Bank Secrecy Act, consistent with Acting Chairman Hill’s letter to FinCEN last month regarding CIP requirements under the PATRIOT Act; (2) reviewing the supervisory appeals process; (3) improving the bidding process related to financial institution resolutions; and (4) working with other agencies to finalize tailored capital and liquidity rules.

OTHER NOTABLE ITEMS

Federal Banking Agencies Announce Intent to Rescind 2023 Community Reinvestment Act Final Rule. On March 28, 2025, the federal banking agencies announced, in light of pending litigation, their intent to issue a proposal to both rescind the CRA final rule issued in October 2023 and reinstate the CRA framework that existed prior to the October 2023 final rule.

Jonathan Gould Appears Before the Senate Banking Committee. On March 27, 2025, Jonathan Gould, the nominee to lead the OCC, appeared before the Senate Banking Committee. In his remarks, he advocated for banks to be allowed “to engage in prudent risk-taking” and echoed recent sentiments that reputational risk is often used as a pretext for other, more quantifiable, risks such as BSA/AML risk.

NYDFS Hires Former CFPB Official For Top Financial Enforcement Role. On March 13, 2025, the New York State Department of Financial Services (NYDFS) announced that Gabriel O’Malley would join the NYDFS to lead the Consumer Protection and Financial Enforcement Division, the NYDFS division that handles investigations, enforcement and consumer compliance examinations. Mr. O’Malley most recently served as the CFPB’s deputy enforcement director for policy and strategy.

Senate Votes to Overturn CFPB Overdraft Rule Capping Fees at Large Banks at $5. On March 27, 2025, the Senate passed a measure to overturn the CFPB’s December 2024 final overdraft rule under the Congressional Review Act on largely party lines; the House has not yet advanced the companion bill. The rule was slated to go into effect in October 2025 and apply to banks and credit unions with at least $10 billion in assets.

District Court Case Regarding the FDIC’s Use of Administrative Law Judges Advances to Tenth Circuit. Following the FDIC’s filing of a notice stating that it will not continue to defend the use of administrative law judges, the United States District Court for the District of Kansas nonetheless dismissed the action brought by CBW Bank, finding that the District Court lacked subject matter jurisdiction over the bank’s claims by virtue of 12 U.S.C. § 1818(i)(1). CBW Bank filed a notice of appeal on March 28, 2025.

Speech by Governor Barr on Small Business Lending. On March 24, 2025, Federal Reserve Board Governor Barr gave a speech titled “Helping Small Businesses Reach Their Potential.” In his speech, Governor Barr highlighted the critical role small businesses play in the U.S. economy and called for enhancements to “financial transparency,” citing the Truth in Lending Act and Regulation Z as examples of laws that do not extend to small businesses and highlighting state laws in California and New York as examples of statues that mandate clearer disclosures to small business owners.

Acting Comptroller Hood Discusses Financial Inclusion. On March 24, 2025, Acting Comptroller Hood gave remarks on financial inclusion at the National Association of Hispanic Real Estate Professionals’ Homeownership and Housing Policy Conference. In his remarks, Acting Comptroller Hood discussed the OCC’s Project REACh, which aims to advance financial inclusion by focusing on (1) affordable homeownership, (2) small businesses, (3) technology and (4) geographic-specific efforts aimed at combatting challenges unique to specific neighborhoods. Acting Comptroller Hood gave a similar speech titled “Innovation Fosters Financial Inclusion” at the National Community Reinvestment Coalition’s Just Economy Conference 2025.

FDIC Updates PPE List. On March 31, 2025, the FDIC updated the list of companies that have submitted notices for a Primary Purpose Exception (PPE) under the 25% or Enabling Transactions test.

OCC to Host Virtual Innovation Office Hours. The OCC announced that it would host virtual office hours with its Office of Financial Technology on May 6-8, 2025, to provide banks and fintechs the opportunity to “engage with OCC staff on matters related to bank-fintech partnerships, cryptocurrency activities, or other matters related to responsible innovation in the federal banking system.”

OCC Launches Digitalization Resources for Community Banks. The OCC launched a new Digitalization page on its website dedicated to resources to help banks meet their digitalization objectives.

FRBNY’s Liberty Street Economics Blog Examines Payment Systems Interoperability. On March 27, 2025, the Federal Reserve Bank of New York published a Liberty Street Economics blog post titled, “An Interoperability Framework for Payment Systems.” The first post in a two-part series examines concerns whether novel payment systems based on blockchain networks can be made interoperable.

OCC Withdraws Principles for Climate-Related Financial Risk Management for Large Financial Institutions. On March 31, 2025, the OCC announced it withdrew its participation in the interagency principles for climate-related financial risk management for large financial institutions.

The following Gibson Dunn lawyers contributed to this issue: Jason Cabral, Ro Spaziani, and Rachel Jackson.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding the issues discussed in this update. Please contact the Gibson Dunn lawyer with whom you usually work or any of the member of the Financial Institutions practice group:

Jason J. Cabral, New York (212.351.6267, jcabral@gibsondunn.com)

Ro Spaziani, New York (212.351.6255, rspaziani@gibsondunn.com)

Stephanie L. Brooker, Washington, D.C. (202.887.3502, sbrooker@gibsondunn.com)

M. Kendall Day, Washington, D.C. (202.955.8220, kday@gibsondunn.com)

Jeffrey L. Steiner, Washington, D.C. (202.887.3632, jsteiner@gibsondunn.com)

Sara K. Weed, Washington, D.C. (202.955.8507, sweed@gibsondunn.com)

Ella Capone, Washington, D.C. (202.887.3511, ecapone@gibsondunn.com)

Sam Raymond, New York (212.351.2499, sraymond@gibsondunn.com)

Rachel Jackson, New York (212.351.6260, rjackson@gibsondunn.com)

Zack Silvers, Washington, D.C. (202.887.3774, zsilvers@gibsondunn.com)

Karin Thrasher, Washington, D.C. (202.887.3712, kthrasher@gibsondunn.com)

Nathan Marak, Washington, D.C. (202.777.9428, nmarak@gibsondunn.com)

Kensington Title-Nevada, LLC v. Tex. Dep’t of State Health Servs., No. 23-0644 – Decided March 28, 2025

On March 28, a unanimous Texas Supreme Court held that the Texas Administrative Procedure Act authorizes parties to challenge whether an agency rule applies to them.

The Texas Administrative Procedure Act “expressly allows parties who do not believe an administrative rule governs them to challenge its applicability in a judicial proceeding when that rule threatens to interfere with their rights.”

Chief Justice Busby, writing for the Court

Background:

A real estate company acquired property containing abandoned radioactive material. The company initially tried to clean up the material but stopped after municipal taxing entities obtained a lien on the material and threatened to sue the company for removing it. The Texas Department of State Health Services then began administrative proceedings against the company for possessing radioactive material without a license in violation of 25 Texas Administrative Code § 289.252(a)(2).

Faced with these conflicting government demands, the real estate company sought a declaration under Texas Government Code § 2001.038(a) that the Department’s licensing rule didn’t apply to it because it didn’t own or possess the abandoned radioactive material. In response, the Department filed a plea to the jurisdiction, arguing that the real estate company improperly challenged the application of the rule rather than its applicability. The trial court denied the plea, but the court of appeals reversed.

Issue:

Does Texas Government Code § 2001.038(a) authorize suits challenging whether parties are subject to an agency rule?

Court’s Holding:

Yes. The real estate company had constitutional standing to bring, and properly alleged, a rule-applicability challenge.

What It Means:

The Court’s decision preserves a pathway for challenging the applicability of agency rules directly in court without exhausting administrative remedies.
The Court held that parties have standing to request declaratory relief when an agency rule threatens to interfere with or impair their rights. Here, the Department sought to impose an administrative penalty against the real estate company for violating the licensing rule. And a declaration that the rule didn’t apply to the company would redress that financial threat.
The Court rejected the Department’s proposed distinction between a rule’s applicability and its application. Instead, the Court explained that Section 2001.038(a) authorizes “suits seeking a declaration of whether a rule applies to the plaintiff” even if those suits would also “yield guidance on . . . the outcome of [the rule’s] application.” Op. at 12. The trial court had jurisdiction here because the real estate company was challenging whether the rule applied to it—that the answer to that inquiry might involve factual disputes in an ongoing agency proceeding was beside the point.

Continuing to provide insight into the newly created Fifteenth Court of Appeals, the Court observed in a footnote that the Fifteenth Court would, in the future, hear these kinds of appeals under the Texas APA. It also underscored that the Fifteenth Court would “not [be] bound by precedent of the Third Court of Appeals.” Op. at 11 n.4.

The Court’s opinion is available here.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Texas Supreme Court. Please feel free to contact the following practice group leaders:

Appellate and Constitutional Law Practice

Thomas H. Dupree Jr. +1 202.955.8547 tdupree@gibsondunn.com	Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com	Julian W. Poon +1 213.229.7758 jpoon@gibsondunn.com
Brad G. Hubbard +1 214.698.3326 bhubbard@gibsondunn.com

Related Practice: Texas General Litigation

Trey Cox +1 214.698.3256 tcox@gibsondunn.com	Collin Cox +1 346.718.6604 ccox@gibsondunn.com	Gregg Costa +1 346.718.6649 gcosta@gibsondunn.com
Mike Raiff +1 214.698.3350 mraiff@gibsondunn.com	Russ Falconer +1 214.698.3170 rfalconer@gibsondunn.com

This alert was prepared by Texas of counsels Ben Wilson and Kathryn Cherry and associates Elizabeth Kiernan, Stephen Hammer, and Joseph Barakat.

This Royalty Report provides an analysis of publicly reported royalty finance transactions for the last five years (2020 to 2024) in the life sciences sector, focusing on both traditional and synthetic royalty transactions. Traditional royalty transactions encompass monetizations of royalties under existing license agreements. Synthetic royalty transactions involve the sale of a portion of future product sales, rather than the sale of an existing future royalty entitlement.

INTRODUCTION

Methodology and limitations: We analyzed a total of 93 publicly announced royalty transactions over this time period involving the largest and/or most active funds in the space, consisting of the following: Royalty Pharma, HealthCare Royalty Partners (HCRx), Blackstone, OMERS, XOMA Royalty, CPPIPB, Oberland Capital, and DRI Capital. Survey data are based on publicly reported information, including in SEC filings, as well as data from 27 financing transactions executed by Gibson Dunn (representing approximately 30% of the total transactions reviewed during this period). While this is an expansive survey, it does not capture certain transactions that would not have been reported on EDGAR or announced in press releases. Additionally, global pharmaceutical companies are increasingly using clinical funding arrangements (often structured as a type of synthetic royalty financing transaction) to defray development costs and many of these transactions are not sufficiently material to require disclosure. This analysis highlights the growing complexity and dynamism of the pharmaceutical royalty finance market.

TRENDS AND MARKET OUTLOOK

Key Trends (2020-2024)

Rising Use of Synthetic Royalties: Emerging as a viable alternative to debt or equity financing transactions, with an average annual growth rate of 33% over the five-year period.
Increased Activity in recent years (2023 and 2024): Driven in particular by high-value deals and late-stage product transactions.
Milestone-Heavy Transactions: Growing preference for performance-linked payments, allowing buyers to lower their risk profile and allowing sellers to lower their cost of capital.

Factors Driving Market Dynamics

Economic Conditions: Depressed equity valuations have prompted more companies to seek non-dilutive capital, including through royalty financing. At the same time, a higher interest rate environment has increased discount rates that royalty finance providers apply when valuing royalty streams, which increased the cost of capital, likely moderating the volume of royalty financing transactions.
Clinical and Regulatory Process: Funds tend to focus on commercial-stage products, though opportunities exist for pre-approval products, in the form of debt, clinical funding arrangements, and/or where positive clinical data bolsters the investment thesis for a particularly de-risked asset.

Please click on the link below to view the complete Royalty Report:

READ MORE

The following Gibson Dunn lawyers prepared this update: Todd Trattner and Ryan Murr.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these issues. Please contact the Gibson Dunn lawyer with whom you usually work, any leader or member of the firm’s Life Sciences or Royalty Finance practice groups, or the authors:

Todd Trattner – San Francisco (+1 415.393.8206, ttrattner@gibsondunn.com)

Ryan Murr – San Francisco (+1 415.393.837, rmurr@gibsondunn.com)

From the Derivatives Practice Group: The FIA has published updated versions of the FIA Uniform Futures and Options on Futures Risk Disclosures Booklet and FIA Template Disclosures Regarding Separate Accounts to account for the CFTC’s changes to the 1.25 Rule and the Separate Accounts Rule.

New Developments

ICE and Circle Sign MOU to Explore Product Innovation Based on Circle’s USDC and USYC Digital Assets. On March 27, Intercontinental Exchange Inc. (“ICE”), a leading global provider of technology and data, and Circle Internet Group, Inc. (“Circle”), a global financial technology company and stablecoin market leader, today announced an agreement whereby ICE plans to explore using Circle’s stablecoin USDC, as well as tokenized money market offering US Yield Coin (“USYC”), to develop new products and solutions for its customers. Under the MoU, Circle and ICE plan to collaborate to explore applications for using Circle’s stablecoins and other product offerings within ICE’s derivatives exchanges, clearinghouses, data services, and other markets, to deliver innovation and build new markets and product offerings based on Circle’s products. [NEW]
Updated FIA Disclosures For New CFTC Rules. On March 24, the FIA announced that is has published updated versions of the FIA Uniform Futures and Options on Futures Risk Disclosures Booklet and FIA Template Disclosures Regarding Separate Accounts for new CFTC rules. Both documents are available in the “Regulatory Disclosures” section of FIA’s US Documentation Library. The CFTC approved new rules in December revising the list of permitted investments for Futures Commissions Merchants (“FCMs”) and DCOs in CFTC Regulation 1.25 (“1.25 Rule”) and codifying no-action relief governing treatment of separate accounts (“Separate Accounts Rule”). The 1.25 Rule requires FCMs and Introducing Brokers to use a revised form of the 1.55 risk disclosure statement for customers onboarded on or after March 31, 2025. The revised disclosure statement reflects the scope of permissible investments, as modified by the 1.25 Rule. The FIA Uniform Futures and Options on Futures Risk Disclosures Booklet is intended to assist FCMs in delivering mandatory customer disclosures under CFTC, exchange and Self-Regulatory Organization rules. Among the disclosures contained in the booklet is the FIA Combined Risk Disclosure Statement. That document has been updated in accordance with the 1.25 Rule to reflect the modified list of permissible investments. [NEW]
CFTC Staff Issues Interpretation Regarding Financial Reporting Requirements for Japanese Nonbank Swap Dealers. On March 20, the CFTC’s Market Participants Division issued an interpretation concerning financial reporting obligations for nonbank swap dealers subject to regulation by the Financial Services Agency of Japan (“Japanese nonbank SDs”). On July 18, 2024, the CFTC issued a comparability determination and related comparability order granting substituted compliance in connection with the CFTC’s capital and financial reporting requirements to Japanese nonbank SDs, subject to certain conditions in the order (“Japanese Comparability Order”). One of the conditions in the Japanese Comparability Order, condition 9, requires each Japanese nonbank SD to file a copy of its home regulator Annual Business Report with the CFTC and the National Futures Association (NFA). The staff interpretation clarifies that Japanese nonbank SDs may satisfy condition 9 of the Japanese Comparability Order by filing with the CFTC and the NFA certain enumerated schedules of the Annual Business Report (In Scope Schedules), subject to the translation, U.S. dollar conversion, and deadline requirements of condition 9. The interpretation was issued in response to a request from the Securities Industry and Financial Markets Association on behalf of its Japanese nonbank SD members that rely on the Japanese Comparability Order.
SEC’s Division of Corporation Finance Releases Statement on Certain Proof-of-Work Mining Activities. On March 20, the SEC’s Division of Corporation Finance (“Corp Fin”) released a statement providing its views on certain activities on proof-of-work networks known as “mining.” Specifically, the statement addressed the mining of crypto assets that are intrinsically linked to the programmatic functioning of a public, permissionless network, and are used to participate in and/or earned for participating in such network’s consensus mechanism or otherwise used to maintain and/or earned for maintaining the technological operation and security of such network. Corp Fin said that participants in “Mining Activities” (as defined in the statement) do not need to register transactions with the SEC under the Securities Act or fall within one of the Securities Act’s exemptions from registration in connection with these Mining Activities. Commissioner Crenshaw released a related statement, noting that Corp Fin’s statement delivers “neither progress nor clarity” and suffers from issues of flawed logic and limited and imprecise application. Commissioner Crenshaw said that Corp Fin’s statement “leaves us exactly where we started,” because it does not obviate the need for a facts and circumstances application under the investment contract test set forth in SEC v. W.J. Howey Co., 328 U.S. 293 (1946).
CFTC’s Office of Customer Education and Outreach Releases New Advisory on Fraud Using Generative AI. On March 19, the CFTC’s Office of Customer Education and Outreach (the “OCEO”) released a customer advisory that says generative artificial intelligence is making it increasingly easier for fraudsters to create convincing scams. The OCEO advisory describes how fraudsters use AI to create fraudulent identifications with phony photos and videos that can appear very real if one is not familiar with the advances of AI technology. The fraudsters also are using AI to forge government or financial documents. An FBI public service announcement also warns the public about how criminals are using AI to commit fraud and how the technology is being used in relationship investment scams.
CFTC Staff Withdraws Advisory on Swap Execution Facility Registration Requirement. On March 13, the CFTC Division of Market Oversight (“DMO”) announced it is withdrawing CFTC Letter No. 21-19, Staff Advisory Swap Execution Facility (“SEF”) Registration Requirement, effective immediately. As stated in the withdrawal letter, DMO determined to withdraw the advisory since it has created uncertainty regarding whether certain entities are required to register as SEFs.

New Developments Outside the U.S.

ESMA Makes Recommendations for the Supervision of STS Securitizations. On March 27, ESMA published its Peer Review Report on National Competent Authorities’ (“NCAs”) supervision of Simple, Transparent and Standardized (“STS”) securitizations. The Report looks into and provides recommendations on the supervisory approaches adopted by selected NCAs when supervising STS securitization transactions and the activities of their originators, sponsors and securitization special purpose entities. The Peer Review focused on the NCAs of France, Germany, Portugal, and the Netherlands. [NEW]
ESMA Extends the Tiering and Recognition of the Three UK-Based CCPs. On March 17, ESMA announced its decision to temporarily extend the application of the recognition decisions under Article 25 of the European Market Infrastructure Regulation (“EMIR”) for three central counterparties (“CCPs”) established in the United Kingdom (“UK”). On January 30, 2025, the European Commission adopted a new equivalence decision in respect of the regulatory framework applicable to CCPs in the UK. Subsequently, ESMA has prolonged the tiering determination decisions and recognition decisions for the three recognized UK CCPs – ICE Clear Europe Ltd, LCH Ltd (as Tier 2) and LME Clear Ltd (as Tier 1) – that were adopted by ESMA on September 25, 2020, to align with the expiry date of the new equivalence decision. The application of the tiering determination decisions and recognition decisions is temporarily extended until 30 June 2028.
ESMA and Bank of England Conclude a Revised MoU in Respect of UK-Based CCPs Under EMIR. On March 17, ESMA and the Bank of England (“BoE”) signed a revised Memorandum of Understanding (“MoU”) on cooperation and information exchange concerning the three CCPs established in the UK (ICE Clear Europe Ltd, LCH Ltd and LME Clear Ltd) which have been recognized by ESMA under EMIR. ESMA said that, according to EMIR, one of the conditions for recognition of a third-country CCP (TC-CCP) by ESMA is the establishment of cooperation arrangements between ESMA and the relevant third-country authority. ESMA noted that the revised MoU follows the amendments introduced by EMIR 3 on the requirements concerning the content of such cooperation arrangements, in particular, cooperation in respect of systemically important TC-CCPs (Tier 2 TC-CCPs), and replaces the earlier version that ESMA and the BoE concluded in 2020.
UK Drops Proposals to Publicize Enforcement Investigations if Public Interest Test is Met. On March 11, the UK Financial Conduct Authority (“FCA”) wrote to the Treasury Select Committee and House of Lords Financial Services Regulation Committee about its proposals to increase the transparency of enforcement investigations. The FCA indicated that, given continued industry concern over its proposals to publicize an investigation into a regulated firm carrying out authorized activity, where a public interest test is met, the FCA will not proceed with this. Instead, it will stick to its existing exceptional circumstances test to determine if it should publicize investigations into regulated firms. The FCA noted that it will take forward the following proposals and aim to publish a policy statement in the first half of this year: (i) Reactively confirming investigations announced by others; (ii) Public notifications that focus on the potentially unlawful activities of unregulated firms and regulated firms operating outside the regulatory perimeter; and (iii) Publishing greater detail of issues under investigation on an anonymous basis. ISDA said that the FCA’s proposal, which would have given it the ability to publicly name firms at the start of an investigation, caused concern across the industry. In their February 17 response to the proposal, ISDA and the Association for Financial Markets in Europe (“AFME”) highlighted concerns that the proposals would be harmful to UK competitiveness and growth and suggested a broader interpretation of the existing exceptional circumstances test could be used to meet the FCA’s objectives. This was the second consultation ISDA and AFME responded to on this subject. The first response, submitted on April 30, 2024, is available here.
ESMA Clarifies the Treatment of Settlement Fails with Respect to the CSDR Penalty Mechanism. On March 14, ESMA published a statement on the treatment of settlement fails with respect to the Central Securities Depositories Regulation (“CSDR”) penalty mechanism, following the major incident that affected TARGET Services (T2S and T2) last month. ESMA clarifies in the statement that National Competent Authorities (“NCAs”) do not expect Central Securities Depositories to apply cash penalties in relation to settlement failures for the days of February 27 and 28, 2025. As specified in an existing CSDR Q&A, cash penalties should not be applied in situations where settlement cannot be performed for reasons that are independent from the involved participants.

New Industry-Led Developments

IOSCO Launches New Alerts Portal to Help Combat Retail Investment Fraud. On March 20, IOSCO announced the launch of the International Securities & Commodities Alerts Network (“I-SCAN”). IOSCO said that I-SCAN is a unique global warning system where any investor, online platform provider, bank or institution can check if a suspicious activity has been flagged for a particular company by financial regulators, which will submit alerts directly to I-SCAN, worldwide. According to IOSCO, I-SCAN forms part of IOSCO’s Roadmap for Retail Investor Online Safety, an initiative which was launched in November last year.

The following Gibson Dunn attorneys assisted in preparing this update: Jeffrey Steiner, Adam Lapidus, Marc Aaron Takagaki, Hayden McGovern, and Karin Thrasher.

Jeffrey L. Steiner, Washington, D.C. (202.887.3632, jsteiner@gibsondunn.com)

Michael D. Bopp, Washington, D.C. (202.955.8256, mbopp@gibsondunn.com)

Michelle M. Kirschner, London (+44 (0)20 7071.4212, mkirschner@gibsondunn.com)

Darius Mehraban, New York (212.351.2428, dmehraban@gibsondunn.com)

Jason J. Cabral, New York (212.351.6267, jcabral@gibsondunn.com)

Adam Lapidus, New York (212.351.3869, alapidus@gibsondunn.com )

Stephanie L. Brooker, Washington, D.C. (202.887.3502, sbrooker@gibsondunn.com)

William R. Hallatt, Hong Kong (+852 2214 3836, whallatt@gibsondunn.com )

David P. Burns, Washington, D.C. (202.887.3786, dburns@gibsondunn.com)

Marc Aaron Takagaki, New York (212.351.4028, mtakagaki@gibsondunn.com )

Hayden K. McGovern, Dallas (214.698.3142, hmcgovern@gibsondunn.com)

Karin Thrasher, Washington, D.C. (202.887.3712, kthrasher@gibsondunn.com)

Note: This updates and supersedes a prior alert (available here).

On March 25, 2025, amendments were adopted by the Delaware legislature and signed into law that both lower Delaware courts’ scrutiny of controlling stockholder transactions and moderate the scope of investors’ access to company books and records. Senate Bill 21 (SB21) amends Sections 144 and 220 of the Delaware General Corporation Law (DGCL). The amendments apply to all acts or transactions, except for litigations pending or inspection demands made on or before February 17, 2025.

These amendments follow mounting concerns in Delaware about “DExit”—the actual and potential departures of Delaware-incorporated corporations from the State for jurisdictions perceived to be more friendly to certain types of corporations.[1] By enhancing clarity and facilitating proactive evaluation of director appointments, conflicts cleansing, and transactional planning, SB21 continues Delaware’s long history of modernizing its corporate law in response to market developments.

Amendments to Section 144

Amendments to Section 144 of the DGCL significantly change how controlling stockholder transactions are reviewed by the court.[2] The amendments also strengthen the presumption that a public company director is disinterested and independent.

Controller Transactions Other than Going Private Transactions. SB21 legislatively reverses the Delaware Supreme Court’s recent decision in In re Match Group, Inc. Derivative Litigation, 315 A.3d 446 (Del. 2024). As Gibson Dunn discussed in its April 8, 2024 Alert, Match reaffirmed that entire fairness is the default standard of review for corporate acts or transactions involving a controlling stockholder unless procedures are in place satisfying the requirements of Kahn v. M&F Worldwide Corp.,88 A.3d 635, 645 (Del. 2014) (“MFW”), and related case law; Match also held that all members of a special committee must be disinterested and independent to shift the burden or standard of review at the pleading stage. SB21 also lowers the requirements of MFW.SB21 makes the following changes to the common law, as articulated in Match, MFW, and related cases:

Common Law	Amendments to Section 144
Entire fairness applies to controller acts or transactions approved by either a special committee of independent and disinterested directors or disinterested stockholders, unless the below elements are satisfied.	A safe harbor insulates controller acts or transactions (other than going private transactions) approved by either a special committee of independent and disinterested directors or disinterested stockholders.
An act or transaction must be conditioned on both special committee and disinterested stockholder approval from inception, i.e. before substantive economic negotiations begin.	For disinterested stockholder approval to be effective, the act or transaction must be conditioned on such approval at or prior to the time it is submitted to stockholders.
All members of the special committee are disinterested and independent.	A special committee must have 2+ members, the board must determine all members are disinterested with respect to the controller, and the act or transaction must be approved by a majority of disinterested members.
The special committee is empowered to select and retain its own advisors.	The special committee need not be empowered to select and retain its own advisors.
The special committee is empowered to reject the proposed act or transaction.	The special committee is empowered to reject the proposed act or transaction (no change).
The special committee satisfies its duty of care in negotiating the act or transaction.	The special committee approves the act or transaction in good faith and without gross negligence.
The act or transaction must be approved by a majority of outstanding voting power of disinterested stockholders.	The act or transaction must be approved by a majority of votes cast by disinterested stockholders.
Disinterested stockholder approval must be uncoerced and fully informed.	Disinterested stockholder approval must be uncoerced and fully informed (no change).

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Going Private Transactions. Under the amendments, for a safe harbor to apply to going private transactions at the pleading stage, such transactions require informed, uncoerced approval by both a special committee and disinterested stockholders, subject to the other changes to MFW discussed above.
- For public companies, SB21 defines “going private transaction” as a Rule 13e-3 transaction (as defined in 17 CFR § 240.13e-3(a)(3)).
- Otherwise, a “going private transaction” is one in which all shares of capital stock held by disinterested stockholders are cancelled or acquired (other than those of the controlling stockholder).
Definition of Controlling Stockholder. The amendments define who is a controlling stockholder to address uncertainty in Delaware law regarding who may be a “controlling stockholder.”
- A stockholder with majority voting power is controlling.
- Otherwise, a stockholder with less than majority voting power is controlling only if it has both (i) power functionally equivalent to majority voting power by virtue of one-third in voting power of the outstanding stock of the corporation entitled to vote (A) generally in the election of directors or (B) for the election of directors who have a majority in voting power of the votes of all directors on the board of directors, and (ii) power to exercise managerial authority over the business and affairs of the corporation.
Exculpation for Controlling Stockholders. The amendments exculpate controlling stockholders and members of a control group from liability for duty of care violations. The exculpation automatically applies without any option to opt out.
Disinterestedness and Independence of Public Company Directors. The amendments define what it means to be “disinterested” for purposes of “disinterested” director or stockholder status. Among other things, for publicly listed companies, a director is presumed to be a disinterested director with respect to an act or transaction to which he or she is not a party if the board determined that such director satisfies applicable stock exchange criteria for independence from the company and, if applicable with respect to the act or transaction, the controlling stockholder. This presumption will be more difficult to rebut at the pleading stage, because rebuttal requires “substantial and particularized facts” of a “material interest” or a “material relationship,” as defined in the amendments.

Nomination or Election by Interested Person. Under the amendments, an interested person’s nomination or election of a director to the board does not, by itself, evidence that such director, if not a party to an act or transaction, is not a disinterested director. This means that directors designated to a board by a stockholder, for instance, are not automatically disqualified from being considered independent for Delaware law purposes.

Amendments to Section 220

Following judicial expansion of stockholder inspection rights in recent years, corporations have increasingly been subjected to invasive demands for an ever-widening range of corporate records, including director, officer, or management communications that in some cases courts have permitted for inspection. SB21 amendments to Section 220 of the DGCL narrow the scope of books and records available to stockholders and increase the burden on stockholders for obtaining such records.

Scope of Books and Records. The amendments limit the definition of “books and records” to the certificate, bylaws, minutes and signed consents of stockholder meetings, formal communications to stockholders as a whole, minutes and resolutions of the board and committees, materials provided to the board and committees, annual financial statements, Section 122(18) (i.e., Moelis) agreements, and director independence questionnaires. Director, officer, and manager communications like emails and text messages are notably absent from this definition.
Relevant Period. The amendments limit the period of time from which stockholders may obtain minutes and signed consents of stockholder meetings, formal communications to stockholders as a whole, and annual financial statements to those within three years of the date of the demand.
Demand Requirement. Under the amendments, to obtain inspection, a stockholder demand is required to describe its purpose and the records it seeks with “reasonable particularity.” At least for the purpose of investigating suspected mismanagement or wrongdoing, this appears to heighten, if not outright replace, the low “credible basis” standard.
Protections. The amendments codify the court’s practice of permitting a company to impose reasonable restrictions on confidentiality, use, and distribution of books and records, and deeming produced materials to be incorporated by reference into any complaint. The latter is important because otherwise stockholders can mislead the court by cherry-picking facts from documents in a complaint without permitting the court to consider the whole document. A company also is permitted to redact portions of documents that are not specifically related to the stockholder’s purpose.
Court’s Discretion to Expand “Books and Records.” The amendments prohibit the court from compelling production of materials outside the defined term—e.g., director, officer, or management communications—with a few narrow exceptions. If a company does not have minutes and consents of stockholder meetings, minutes and resolutions of the board and committees, or annual financial statements (and, for public companies, director questionnaires), then the court is permitted to order production of additional records that are the “functional equivalent” of these materials and “only to the extent necessary and essential” to fulfill a proper purpose. Otherwise, the court may only compel the production of other specific records if a stockholder shows a compelling need of such records to further a proper purpose and demonstrates by clear and convincing evidence that such specific records are necessary and essential to further such purpose.

Stay Tuned

Gibson Dunn will continue monitoring these developments as they are interpreted and applied in litigation.

[1] For example, following Tesla’s reincorporation in Texas, TradeDesk reincorporated in Nevada, Dropbox filed notice that it is in the process of reincorporating in Nevada, and other controller-led companies announced they are considering reincorporation.

[2] The amendments also provide a safe harbor for an act or transaction for which a majority of directors are conflicted—for example, decisions regarding director compensation—if such act or transaction is approved by a special committee of at least two disinterested, independent directors or approved or ratified by disinterested stockholders, in each case on a fully informed basis.

The following Gibson Dunn lawyers prepared this update: Ari Lanin, Monica K. Loseman, Brian M. Lutz, Mary Beth Maloney, Julia Lapitskaya, Colin B. Davis, Jonathan D. Fortney, and Mark H. Mixon, Jr.

Gibson Dunn lawyers are available to assist in addressing any questions you may have regarding these developments. Please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any of the following Securities Litigation, Mergers and Acquisitions, Private Equity, or Securities Regulation and Corporate Governance practice group leaders and members:

Securities Litigation:
Colin B. Davis – Orange County (+1 949.451.3993, cdavis@gibsondunn.com)
Jonathan D. Fortney – New York (+1 212.351.2386, jfortney@gibsondunn.com)
Monica K. Loseman – Denver (+1 303.298.5784, mloseman@gibsondunn.com)
Brian M. Lutz – San Francisco (+1 415.393.8379, blutz@gibsondunn.com)
Mary Beth Maloney – New York (+1 212.351.2315, mmaloney@gibsondunn.com)
Mark H. Mixon, Jr. – New York (+1 212.351.2394, mmixon@gibsondunn.com)
Craig Varnen – Los Angeles (+1 213.229.7922, cvarnen@gibsondunn.com)

Mergers and Acquisitions:
Robert B. Little – Dallas (+1 214.698.3260, rlittle@gibsondunn.com)
Saee Muzumdar – New York (+1 212.351.3966, smuzumdar@gibsondunn.com)
George Sampas – New York (+1 212.351.6300, gsampas@gibsondunn.com)

Private Equity:
Richard J. Birns – New York (+1 212.351.4032, rbirns@gibsondunn.com)
Wim De Vlieger – London (+44 20 7071 4279, wdevlieger@gibsondunn.com)
Federico Fruhbeck Jr. – London (+44 20 7071 4230, ffruhbeck@gibsondunn.com)
Ari Lanin – Los Angeles (+1 310.552.8581, alanin@gibsondunn.com)
Michael Piazza – Houston (+1 346.718.6670, mpiazza@gibsondunn.com)
John M. Pollack – New York (+1 212.351.3903, jpollack@gibsondunn.com)

Securities Regulation and Corporate Governance:
Elizabeth Ising – Washington, D.C. (+1 202.955.8287, eising@gibsondunn.com)
Julia Lapitskaya – New York (+1 212.351.2354, jlapitskaya@gibsondunn.com)
James J. Moloney – Orange County (+1 949.451.4343, jmoloney@gibsondunn.com)
Lori Zyskowski – New York (+1 212.351.2309, lzyskowski@gibsondunn.com)

John Adams is the co-author of “Swift and Rigorous — Texas Business Court’s Primexx Energy Ruling and Its Implications for Corporate Governance” [PDF] published by The Texas Lawbook on March 25, 2025.

State Attorneys General are playing an increasingly active role in enforcing corporate misconduct, often acting independently or in coordination with federal agencies. Whether as to consumer protection, data privacy, false government claims, antitrust, securities fraud, or environmental, state AGs are leveraging their broad investigative and prosecutorial powers to shape policy and drive high-dollar recoveries. This webcast examines the key areas where state AGs have asserted and will increasingly assert their influence, recent enforcement actions, and what companies should expect—and prepare for—as state-level enforcement continues to expand.

MCLE CREDIT INFORMATION:

This program has been approved for credit by the New York State Continuing Legal Education Board for a maximum of 1.5 credit hour in the professional practice category. This course is approved for transitional and non-transitional credit.

Gibson, Dunn & Crutcher LLP certifies this activity is approved for 1.5 hour of MCLE credit by the State Bar of California in the General Category.

California attorneys may claim self-study credit for viewing the archived webcast. No certificate of attendance is required for self-study credit.

PANELISTS:

Winston Y. Chan is a litigation partner in the San Francisco office, and serves as co-chair of the firm’s global White Collar Defense and Investigations practice group, and also its False Claims Act/Qui Tam Defense practice group. He leads matters involving government enforcement defense, internal investigations and compliance counseling, and regularly represents clients before and in litigation against federal, state and local agencies, including the U.S. Department of Justice, Securities and Exchange Commission, and State Attorneys General. Prior to joining the firm, Winston served as an Assistant United States Attorney in the Eastern District of New York, where he investigated a wide range of corporate and financial criminal matters and held a number of supervisory roles.

Jina Choi is a partner in the San Francisco office of Gibson Dunn and a member of the firm’s Securities Enforcement and White Collar Defense and Investigations Practice Groups. Jina represents and counsels major public and private companies and financial institutions, as well as their executives and boards of directors, on government and internal investigations, enforcement-related litigation, whistleblower complaints and compliance programs.

Mylan Denerstein is a litigation partner in the New York office and co-chair of the Public Policy Practice Group and a member of the Crisis Management, White Collar Defense and Investigations, and Labor and Employment Groups. Mylan leads complex litigation and internal investigations, representing companies confronting a wide range of legal issues during their most critical times. With deep knowledge of New York State and extensive prior government service, including roles as Deputy Chief of the Criminal Division, United States Attorney’s Office, Southern District of York, Executive Deputy Attorney General, New York State Attorney General’s Office, and Counsel to the New York State Governor, Mylan is widely recognized for her outstanding legal advocacy and exceptional problem-solving skills.

Karin Portlock is a partner in the New York office and a member of the White Collar Defense and Investigations, Litigation, Labor and Employment, and Crisis Management Practice Groups. She regularly represents institutional clients in probes by state Attorneys General from initial investigation through appeal, as well as individuals and companies under criminal investigation and indictment by the U.S. Department of Justice. From 2015-2020, Karin served as an Assistant United States Attorney in the U.S. Attorney’s Office for the Southern District of New York, prosecuting a broad range of federal criminal violations. Karin currently has a broad-based government enforcement and investigations practice, ranging from government and internal corporate investigations to criminal defense and regulatory enforcement litigation through trial. Karin is an experienced trial lawyer and courtroom advocate, having served as lead counsel in numerous trials over the course of her career.

Prerak Shah is Of Counsel in the Houston office, where he specializes in state attorney general investigations and enforcement actions. He was previously Senior Counsel to the Texas A.G., where he served on the agency’s executive management team and led high-profile litigation and investigations, including coordinating with multistate groups on national lawsuits and investigations in areas including antitrust, consumer protection, and data privacy. Prerak rejoined the firm after serving as the Acting U.S. Attorney for the Northern District of Texas and as Chief of Staff to U.S. Senator Ted Cruz.

The New York Times quoted Trey Cox, counsel to Energy Transfer, in its coverage of a jury’s verdict to award over $660 million in damages to Energy Transfer, holding Greenpeace accountable for its role in the Dakota Access Pipeline protests.

Read the full article in The New York Times (subscription required).

Trey Cox, counsel for Energy Transfer, was quoted in the Texas Lawyer on the jury’s verdict against Greenpeace, awarding Energy Transfer $660 million in damages.

Read the full article in the Texas Lawyer (subscription required).

CNN quoted Trey Cox, counsel for Energy Transfer, on the jury’s verdict awarding more than $660 million in damages Greenpeace related to the Dakota Access Pipeline protests.

Read the full article in CNN.

Trey Cox, counsel for Energy Transfer, was quoted in the Associated Press on the jury’s decision awarding over $660 million in damages against Greenpeace stemming from protests against the Dakota Access Pipeline.

Read the full article in the Associated Press.

Ahead of the release of its full list of Rising Stars of European Finance for 2025 — which celebrates the most talented professionals under the age of 40 working in financial and professional services in the U.K. and Europe — the Financial News published a profile of Gibson Dunn London partner Kavita Davis. Kavita discusses her work over the past 12 months, describes how she navigates challenges, and offers some advice to those starting their first role in law. “Be open to new experiences and seize opportunities to work on different projects,” she says. “This will help you learn, grow, and enhance your problem-solving skills. Also, always be focused on the long game.”

Read the full article in the Financial News.

Please join us for a presentation that delves into the essential considerations for optimizing corporate and capital structures as companies prepare for a successful transition to the public market through an Initial Public Offering (IPO). With a focus on structuring and tax issues, we explore key strategies that can maximize value and enhance long-term performance as a public company.

This presentation is designed to equip legal professionals and corporate stakeholders with the knowledge necessary to navigate the complex legal landscape of structuring and tax issues during the IPO process. Attendees will leave with actionable insights into best practices and emerging legal trends that can facilitate a successful transition to public company status.

MCLE CREDIT INFORMATION:

This program has been approved for credit in accordance with the requirements of the New York State Continuing Legal Education Board for a maximum of 1.0 credit hour, of which 1.0 credit hour may be applied toward the areas of professional practice requirement. This course is approved for transitional/non-transitional credit.

Attorneys seeking New York credit must obtain an Affirmation Form prior to watching the archived version of this webcast. Please contact CLE@gibsondunn.com to request the MCLE form.

Gibson, Dunn & Crutcher LLP certifies that this activity has been approved for MCLE credit by the State Bar of California in the amount of 1.0 hour in the General Category.

California attorneys may claim “self-study” credit for viewing the archived version of this webcast. No certificate of attendance is required for California “self-study” credit.

PANELISTS:

Pamela Lawrence Endreny is a partner in the New York office of Gibson, Dunn & Crutcher and a Co-Chair of the firm’s Tax Practice Group. Ms. Endreny represents clients in a broad range of U.S. and international tax matters.

Ms. Endreny’s experience includes mergers and acquisitions, spin-offs, joint ventures, financings, restructurings and capital markets transactions. She has obtained private letter rulings from the Internal Revenue Service on tax-free spin-offs and other corporate transactions.

Ms. Endreny earned her Juris Doctor from Columbia University School of Law. She received her undergraduate degree from Brown University. She is a member of the Massachusetts bar and New York bar.

Jennifer Sabin is a partner in the New York office of Gibson, Dunn & Crutcher. She represents clients in a broad range of domestic and international tax matters, including taxable and tax-free mergers and acquisitions (public and private), spin-offs, joint ventures, financings, and restructurings. Her practice also includes formation of, and transactions undertaken by, private equity, hedge funds, and asset managers. In addition, Ms. Sabin advises on various aspects of information reporting, including matters relating to the Foreign Account Tax Compliance Act.

Jennifer received her Juris Doctor, cum laude, in 2011 from The University of Pennsylvania Law School. She received her Bachelor of Arts, magna cum laude, in History from Yale University in 2006.

Eric M. Scarazzo is a partner in the New York office of Gibson, Dunn & Crutcher. He is a member of the firm’s Capital Markets Practice Group and Securities Regulation and Corporate Governance Practice Group. He also is a member of the firm’s Public Company Industry Group and Cleantech Industry Group. The broad range of clients that Mr. Scarazzo represents includes issuers and underwriters, public, private, and private equity portfolio companies, and businesses from development-stage to blue chip. Clients span the geographic spectrum from U.S.-based to foreign and multinational.

Mr. Scarazzo received his Juris Doctor, with a concentration in Corporate Law, in 2005 from the University of California, Los Angeles. He earned a master’s degree in Accounting, with a concentration in Tax Consulting, in 2000, and a Bachelor of Science degree in Finance, Economics and Accounting in 1999, from the University of Virginia.