Jeremy Smith and Daniel Rubin are the authors of “Wildfire housing crisis tests California price-gouging law” [PDF] published by the Daily Journal on January 30, 2025. 

Expect sweeping changes ahead. But when looking back, an aggressive enforcement agenda continued as the SEC reported record high financial remedies, although—like all numbers that high—the SEC’s enforcement measures in 2024 require context and came alongside a drop in new actions.

I.  Introduction

The dichotomy of an aggressive enforcement agenda tempered by litigation setbacks set forth in our mid-year 2024 SEC Enforcement update persisted through the end of the SEC’s 2024 fiscal year.  The SEC filed a flurry of enforcement actions up until the very end of the previous administration.  Now that the Gensler-led SEC has ended and the incoming administration has nominated Paul Atkins as its new Chairman and appointed Commissioner Mark Uyeda as Acting Chairman, change is coming.  To be clear, the Commission’s three-part mission and the critical role that enforcement plays in that mission will remain the same.  But, from those who have worked with Atkins—and as covered in a Gibson Dunn webcast—shifts are coming at the agency.

A.  2024 Enforcement Results: The Ups and Downs

While measuring success goes beyond numbers, the reported drop in new actions piqued interest given the Commission’s aggressive enforcement posture.

As reported by the SEC on November 22, the enforcement statistics for the fiscal year ending September 30, 2024 reflect that the Commission filed a total of 583 actions, compared to 784 actions the prior year, a drop of 26 percent.[1]  Of those 583 actions, the agency reported 431 stand-alone enforcement actions—the most significant measure of activity, involving cases independently charged and not linked to a prior finding of violation—as compared to 501 stand-alone enforcement actions filed the prior year, a 14 percent drop.

While the Commission obtained orders for an all-time aggregate high of $8.2 billion— consisting of $6.1 billion in disgorgement and prejudgment interest, the highest amount on record, and $2.1 billion in civil penalties, the second-highest amount on record—the 2024 financial remedies stem in large part from the continued off-channel communications settlements ($600 million) and a single crypto judgment ($4.5 billion in disgorgement, interest, and penalty), that received unanimous Commission support but appears uncollectible.[2]  Consistent with its general pattern over the last several years, in 2024, the SEC again recovered over twice as much in disgorgement as compared to penalties.

Another important metric to highlight includes $345 million in money distributed to harmed investors in fiscal year 2024, a drop from $930 million distributed to harmed investors in fiscal year 2023.  And the agency also reported fiscal year 2024 orders barring 124 individuals from serving as officers and directors of public companies, the second-highest number of such bars following the prior year’s 133 such orders.

The distribution of actions across subject matter remained generally consistent with prior years.  The SEC brought 97 stand-alone actions against investment advisers and investment companies (23 percent of actions in 2024) reflecting a continued focus on investment adviser and company regulation and enforcement, and an increase from the prior year (86 cases, 17 percent of actions in 2023).  The 94 stand-alone enforcement actions relating to securities offerings reflected a decrease from the prior year (22 percent of actions in 2024, compared to 164 cases and 33 percent of actions in 2023), while broker-dealer enforcement remained relatively steady (61 cases and 14 percent of actions in 2024, compared to 60 cases and 12 percent of actions in 2023).  There were also decreases year-over-year in the areas of issuer reporting (49 cases and 11 percent of actions in 2024, compared to 86 cases and 17 percent of actions in 2023) and—as conveyed in more detail within Gibson Dunn’s forthcoming 2024 FCPA Year-End Update—FCPA matters (two cases and zero percent in 2024, compared to 11 cases and two percent of actions in 2023).  In fact, the combined number of issuer reporting and FCPA matters is the lowest since at least 1998.  Finally, there was a slight increase in the percentage of stand-alone actions relating to insider trading in 2024 (34 cases and eight percent of actions in 2024, compared to 32 cases and six percent of actions in 2023).

B.  Explaining the Numbers: Jarkesy

Impacts of recent court cases remain important to watch for the SEC and all agencies.

In a November podcast, the SEC’s former enforcement director remarked that the numbers show the impacts of, among other things, the U.S. Supreme Court decisions from last year including SEC v. Jarkesy (June 2024).  The director, who announced his departure in October,[3] stated after the decisions, “we [enforcement] basically needed to hit pause” and “assess the impact of Jarkesy” on resolved, pending, and pipeline matters, which took “several months between June, July and even creeping into August.”  The former director continued that “if we want to see how the last fiscal year [ending September 30] was, you should look at October and November [cases filed] because those are the two months or more that we lost as a result of Jarkesy ….” The agency filed 200 enforcement actions in the first fiscal quarter of 2025 (October to December 2024), with 75 actions in October 2024 alone.  Of note, the agency sent out a press release on the last business day of the Gensler administration, touting the record number of enforcement actions in fiscal Q1 2025 (October through December 2024), and the 40 actions filed in the first two business weeks of January 2025.[4]

The CFTC similarly reported decreased enforcement numbers for its recent fiscal year, 58 new actions as compared to 96 the prior year, although the impacts of any litigation setbacks on the CFTC’s pipeline may not have been as pronounced (it filed three actions in October 2024 and no actions in December 2024).[5]  At the same time, a similar trend surfaced concerning financial remedies: like the SEC, the CFTC reported record-breaking monetary results for its fiscal year, though there, too, a single crypto case played a leading role in the monetary relief.

While explaining the SEC numbers further may involve other factors such as a review of resource allocation and case priorities, former acting enforcement director Sanjay Wadhwa (who stepped down effective on January 31) stated that “[w]hat our numbers do not reflect, however, are countless investigations that may not have resulted in an enforcement action for evidentiary or other reasons, or where we declined to pursue an enforcement action, but that shined a spotlight on potentially problematic conduct and caused responsible market participants to cease engaging in it.”

Finally, other litigation setbacks remain on radar, including SEC v. Govil.  That Second Circuit case, covered in detail in a prior client alert, held the SEC is not entitled to disgorgement unless it can show the allegedly defrauded investors suffered pecuniary harm.  This important holding emerged in the past year in a litigated SEC case where the Southern District of New York denied the agency’s request for roughly $1 billion in disgorgement and interest based on Govil.[6]  Another notable setback was in Coinbase v. SEC where the Third Circuit recently faulted the Commission for failing to provide “meaningful guidance on which crypto assets it views as securities.”  In light of the Coinbase decision and the SEC’s new leadership, we expect to see significant change in the Commission’s approach to crypto assets in the coming year.  Indeed, within a day of the inauguration, Acting Chairman Mark Uyeda launched a new crypto task force, led by Commissioner Hester Peirce, with the stated mission of “developing a comprehensive and clear regulatory framework for crypto assets.”[7]

C.  What the Past Might Tell Us: Looking Back to the Future

Past Republican Commissioner statements note that the “vast majority of SEC enforcement actions are straightforward.” 

Although steady commentary suggests a pullback on crypto and off-channel communication cases, sweeps for technical violations, and the overuse of internal controls and certain other provisions of the securities laws, other areas highlighted in the 2024 results will most likely remain in focus.  Those “straightforward” areas include major fraud, individual accountability, gatekeeper accountability, and certain public company cases, among others. Moreover, investigations typically take time to complete even under the best of circumstances, with the average of all investigations taking slightly over two years.  And while case outcomes might look different, the past administration’s matters (including on subject matter similar to cases filed in 2024) will most likely remain active for some time.  Notwithstanding new priorities, those legacy matters may mature into actions filed in the future and shape early trends for the new administration.

Whistleblowers

The topic of whistleblowers remains an important one.  Although the potential for decreased penalties in the new administration may impact the analysis for some whistleblowers, given that any bounty paid to the whistleblower derives from monetary relief, expect continued tips to the SEC and others.  Credible allegations of misconduct will always be investigated vigorously under any administration.

Highlights from 2024 regarding whistleblowers:

• The SEC reported receipt of 24,000 whistleblower tips and announced awards of more than $255 million to 47 individuals, a decline from the prior year, and reportedly more than 14,000 of the 24,000 tips came from two individual whistleblowers.[8]
• The SEC also continued to aggressively enforce whistleblower protections. In an enforcement sweep announced in September 2024, the SEC ordered over $3 million in penalties against seven companies for allegedly violating whistleblower protection rules by, for example, requiring employees to waive their right to receive whistleblower awards, asking customers to agree to not contact the SEC, and requiring signees to certify that they had not provided information to the government in the past.[9]
• In one case, as reported in our mid-year update, and which received unanimous Commission support for action, a broker-dealer paid an $18 million penalty for allegedly impeding “hundreds of advisory clients and brokerage customers from reporting potential securities law violations to the SEC” by having them sign an agreement prohibiting them from “affirmatively reporting” information to the Commission staff.[10]

Artificial Intelligence

Another important area from 2024 includes cases involving emerging technologies and emerging risks.  This same subject area appears in the SEC’s 2025 examination priorities.  While internal agency referrals (from other SEC divisions including Exams) might change in the years ahead, they will not cease—and thus examination priorities are likely to continue to shape and become enforcement priorities.

Highlights from 2024 regarding emerging technologies and emerging risks:

• Like many other agencies, the SEC messaged a strong focus on artificial intelligence.
• The SEC’s enforcement results highlighted this particular area, and numerous speeches and other statements touched upon this significant technology. As covered in our mid-year 2024 update, the SEC announced two enforcement actions in March 2024 against investment advisers for “AI-washing” and violations of the Marketing Rule (another area of focus during the last administration) for marketing the use of AI in certain ways that were not accurate.
• The types of AI matters the Commission has brought so far are uncontroversial fraud cases. Although the new administration will have its own priorities, a focus on straightforward material misstatements by any market participant to investors will remain of significant interest to the agency.

Individual Accountability

When looking at SEC enforcement reports for years during the previous Trump administration, this topic received rightful attention given that charging culpable individuals, where appropriate, hits at the core of accountability and deterrence and also because corporate entities act through individuals.  That leads to dynamic charging considerations, which as we look ahead might tip the balance of Commission thoughts towards the side of pursuing even more individual cases.  In any event, while the SEC’s 2024 report reviewed multiple cases involving individual accountability, a rough through-line indeed involved allegations of fraud.

Market Abuse and MNPI

The SEC’s report further highlighted a mix of actions related to market abuse and insider trading, an area that for the most part proves less controversial for the SEC (save for certain recent cases, including one litigated in 2024).  In 2024, the SEC brought or settled charges against investment adviser representatives for a “cherry-picking” scheme that allegedly “defrauded their clients out of millions,” against a hacker for illegally obtaining and trading on a public company’s MNPI, and against several investment advisers for failing to implement and enforce policies and procedures to prevent MNPI misuse.  Notably, after the fiscal year end, the SEC filed a litigated matter against an investment adviser for such compliance failures.[11]

Other Notes

With respect to the largest area of enforcement cases in 2024, investment advisers and companies, and notwithstanding the strike-down of the private funds rule, these important market participants will remain in focus for egregious cases and continued examinations.  With respect to new(er) rules that survived or did not receive challenges, while some added grace period may be more likely in the coming years, those areas will ripen to enforcement risk.

A note on off-channel communication cases: numerous takes foresee fewer, if any, such stand-alone technical matters.  However, the communications might resurface as more and more investigations uncover the substance of any unreviewed communications where indeed the reasons for going off-channel extended beyond the mundane.

On balance, there are at present more questions than answers on what the future holds, as we all await priority pronouncements, personnel appointments of directors, what’s to come from the Department of Government Efficiency, and how litigation setbacks like Jarkesy and Govil, among others, impact the way in which the SEC and others litigate, which might be particularly important as the SEC likely pursues even more individual accountability.  Nevertheless, when issues arise and bad actors reveal themselves, the SEC will come calling.

D.  Senior Staffing Update

Beyond the more covered staffing changes—such as the nomination of Paul Atkins as Chairman, former Chair Gary Gensler’s announced retirement along with Mark Uyeda’s naming as Acting Chairman, and Gurbir Grewal’s announced departure from the Enforcement Director position along with Sanjay Wadha’s appointment as Acting Enforcement Director—there were further changes at the senior staff level and in regional leadership.  Many of these changes accompanied, or immediately preceded, the change in administration.

• In July, Keith E. Cassidy was named Interim Acting Director of the Division of Examinations while Director Richard Best took a leave of absence to focus on his health. Cassidy concurrently serves as the National Associate Director of the Division’s Technology Controls Program, where he oversees the SEC’s CyberWatch program and the Cybersecurity Program Office.[12]
• In September, the SEC announced that Richard R. Best would transition to the role of Senior Advisor to the Director of the Division of Examinations from his role as Director of the Division of Examinations. Before becoming the Director of the Division of Examinations in 2022, Mr. Best served as the Director of the SEC’s New York Regional Office and also previously served as the Director of the SEC’s Atlanta Regional Office and the SEC’s Salt Lake Regional Office.
• In December, the SEC announced the departure of Trading and Markets Division Director Haoxiang Zhu. During Mr. Zhu’s tenure, the SEC shortened the settlement cycle for equities, corporate bonds, and municipal bonds to one day, expanded central clearing for Treasury repurchase and cash transactions, and updated execution rules under Regulation National Market System (NMS).  David Saltiel, formerly a deputy director in the Office of Analytics and Research, assumed the role of Acting Director upon Mr. Zhu’s departure.[13]
• In December, Erik Gerding left his position as Director of the Division of Corporate Finance.[14] Gerding joined the SEC as Deputy Director of the Division of Corporate Finance in October 2021 and became the Division’s Director in February 2023.  For the time being, Cicely LaMothe—who was serving as Deputy Director for Disclosure Operations within the division—will serve as Acting Director.

More staffing changes occurred at the turn of the year, in relatively quick succession, before the change in administration.

• Chief Accountant Paul Munter retired after serving in his role for two years.[15] Munter joined the Commission in 2019, was named as Acting Chief Accountant in 2021, and was appointed to Chief Accountant in early 2023.  Ryan Wolfe currently serves as Acting Chief Accountant.[16]
• Chief Economist and Director of the Division of Economic and Risk Analysis (DERA) Jessica Wachter departed the Commission around the same time, announcing that she would return to the Wharton School at the University of Pennsylvania to serve as the Dr. Bruce I. Jacobs Chair of Quantitative Economics.[17] Robert Fisher currently serves as the Acting Director of DERA.[18]
• General Counsel Megan Barbero also departed the Commission. She had served as General Counsel since February 2023 and joined the SEC in July 2021 to serve as the Principal Deputy General Counsel.[19]  Jeffrey Finnel currently serves as Acting General Counsel.[20]
• The Director of the Office of International Affairs, YJ Fisher, also left the Commission after serving in her position since August 2021.[21] Kathleen Hutchinson currently serves as Acting Director of the Office of International Affairs.[22]
• The Commission’s Chief of Staff, Amanda Fisher, similarly announced her departure from the Commission.[23] She first joined the Commission in June 2021 as Senior Counselor, then served as Chief of Staff from January 2023 until her departure.
• The SEC Policy Director, Corey Klemmer, also announced that she would step down from her role, which she held since May 2024.[24] Klemmer joined the Commission in July 2021 to serve as Corporate Finance Counsel.
• Director of the Office of Public Affairs, Scott Schneider, also left the SEC.[25] Schneider had served in this role since April 2021 and had also served as a counselor to Chair Gensler.
• Finally, Sanjay Wadha—who has been serving as Acting Director of the Division of Enforcement—announced that he would depart the Commission as of January 31, 2025. Wadha first joined the SEC as a staff attorney in 2003.[26]  Between then and his being named Acting Enforcement Director in October 2024, Mr. Wadha served in many roles at the Commission, including Senior Associate Director of the Division of Enforcement in the New York Regional Office (NYRO), Deputy Chief of the Market Abuse Unit, and Assistant Director in the NYRO.  Samuel Waldon, the previous Acting Deputy Director, currently serves as the Acting Director; and Antonia Apps as the Acting Deputy Director.[27]

E.  Whistleblower Actions

As noted above, 2024 trends demonstrated that the Commission continued to make whistleblowers an important aspect of its enforcement agenda throughout the year.  In three separate enforcement actions in September, the SEC announced settled charges against over 10 entities in total for alleged violations of Rule 21-F, the SEC’s whistleblower protection rule.  These actions notably demonstrated that the Commission continued to interpret Rule 21-F’s scope to be broad.  For example, in the first action described below, the SEC found that the whistleblower protection rule pertained to agreements made with clients, and not with employees.  This action marks the second time—the first being the Commission’s settled charges against a large broker-dealer, as noted in our mid-year update—that were brought with respect to agreements made outside of the employment context.  These actions further show that the Commission has interpreted the rule from asking signees to certify that they, retrospectively, had not provided information to the government in the past, before signing the agreement at issue.  The Commission has taken the position that such clauses violate the whistleblower protection rules, even where other aspects of the agreement allow signees to provide information to the government prospectively, and to reap related whistleblower awards.

• The first action announced settled charges against a broker-dealer and two affiliated investment advisors for entering into confidentiality agreements with retail clients containing provisions that allegedly limited clients’ ability to provide information to the SEC by permitting communications only where the SEC first initiated an inquiry.[28] Without admitting or denying the allegations, the broker-dealer agreed to pay a civil penalty of $240,000 to settle the charges.
• The second action announced settled charges against seven entities for allegedly using employment and other agreements that either limited the signees’ ability to willingly and voluntarily provide information to the SEC, required signees to affirm that they had not provided information to the government in the past, or prevented signees from receiving whistleblower awards in return for providing information.[29] Without admitting or denying the SEC’s allegations, the entities agreed to pay civil penalties of over $3 million in the agreement, with individual penalties ranging from $19,500 to $1.4 million.
• The third action announced settled charges against a Florida-based investment advisor for allegedly entering into agreements with candidates for employment that, though allowing the candidates to provide information to the government in response to inquiries, prevented the candidates from making such disclosures voluntarily.[30] Without admitting or denying the allegations, the investment adviser agreed to pay a civil penalty of $500,000 to settle the charges.

The Commission relatedly continued to provide sizable awards to individuals that provided useful information through the whistleblower program.

• In July, the SEC announced two separate whistleblower awards, each coincidentally for approximately $37 million, to two different whistleblowers that provided information that purportedly facilitated successful enforcement actions. In one of the matters, the whistleblower purportedly provided information directly to the Commission and further conserved the Staff’s time and resources by identifying potential witnesses and documents.[31]  In the other matter, the respective whistleblower initially reported their concerns internally, which led their employer to conduct an internal investigation and also eventually helped prompt the SEC to open up its own investigation.  The whistleblower then purportedly facilitated the Staff’s investigation by providing ongoing, extensive, and timely assistance.[32]
• In August, the SEC announced two whistleblower awards totaling more than $98 million for information and assistance that led to an SEC enforcement action and an action brought by another agency. The first whistleblower received an award of $82 million for making the tip that prompted the opening of the investigations and for providing critical ongoing assistance to the investigations.  The second whistleblower received an award of $16 million for, at a later stage of the investigations, providing information that significantly contributed to one aspect of the actions.[33]
• Also in August, the SEC awarded $24 million to two whistleblowers who, after reporting conduct internally, provided information that prompted an SEC enforcement action and an action by another agency. Although the first whistleblower’s information prompted the SEC investigation, the second whistleblower received a higher award, purportedly because their “information played a more significant role in the investigation.”  The second whistleblower provided, among other things, “important information about key witnesses and their roles in the schemes,” which purportedly was “heavily” relied on by the SEC during the investigation.  The $24 million award was based on the entire amount ordered by the Commission, including disgorgement and prejudgment interest, as well as on the amount collected by the other agency in its separate action.[34]
• In October, the SEC announced a $12 million award to three whistleblowers who provided critical assistance to an SEC enforcement action. In determining the amount of the award, the SEC considered, among other things, the significance of the information provided to the commission, the assistance provided, the law enforcement interest in deterring violations, and participation in internal compliance systems.[35]

II.  Public Company Accounting, Financial Reporting, and Disclosure

A.  Purported Fraudulent Schemes

In June 2024, the SEC announced settled charges against an advanced materials and nanotechnology company, and filed related charges against its former CEOs, for alleged violations of fraud, reporting, internal accounting controls, and books and records provisions.[36]  The alleged scheme involved the two former CEOs issuing a special dividend—the value of which was allegedly overstated by the former CEOs—and effecting a merger between their former companies.  When the company’s stock price did indeed rise, the company sold over 16 million shares, raising $137.5 million.  The SEC alleges the true purpose of the merger and dividend were to create a short squeeze, which was allegedly never communicated publicly.  The company neither admitted nor denied the findings and agreed to pay a $1,000,000 penalty.  The charges against the former CEOs are pending in the U.S. District Court for the Southern District of New York, and the SEC is seeking permanent officer-and-director bars, disgorgement of ill-gotten gains, and civil penalties from them.

In August, the SEC announced that an Alabama-based shipbuilder and its Austrian parent company had agreed to settle charges brought by the SEC in the U.S. District Court for the Southern District of Alabama.[37]  The SEC’s complaint alleged that the companies conducted a purportedly fraudulent revenue recognition scheme from January 2013 to July 2016 to artificially reduce the estimated cost of completion of projects for the U.S. Navy by tens of millions of dollars.  As a result, the companies allegedly prematurely recognized revenue.  To settle the charges, both companies consented to permanent injunctions, and the Alabama-based shipbuilder agreed to pay a $24 million civil penalty.  The Department of Justice also announced settled charges against the Alabama-based shipbuilder.

B.  Financial Reporting

In August, the SEC announced settled charges against an electric vehicle company, its current CEO, former Chairman and CEO, and former CFO for allegedly reporting misleading information about the company’s financial performance from 2017 to 2019.[38]  Specifically, the SEC alleged that the company and the former Chairman and CEO reported 2017 revenue guidance of $300 million despite known issues that would negatively impact revenue, and misled the company’s auditor by allegedly providing a fraudulent letter of intent from a buyer in order to avoid writing down certain assets.  The SEC also alleged that the company and all three individuals improperly accounted for a cryptocurrency deal in 2019, resulting in an overstatement of revenues by more than $40 million, and made false representations in the company’s financial statements.  Finally, the SEC alleged that the former Chairman and CEO hid from the auditor his personal interest in two companies that received millions of dollars in cash and stock in deals with the company.  Without admitting or denying the SEC’s findings, the company agreed to pay a $1.4 million penalty and retain an independent compliance consultant; the current CEO and former CFO each agreed to pay a $75,000 penalty, and the former CFO further accepted a two-year accounting suspension; in addition, the former Chairman and CEO agreed to a $200,000 civil penalty, more than $3.3 million in disgorgement, and a 10-year officer-and-director bar.

In September, the SEC charged the former CFO; former audit committee chair; and former Chair, CEO, and President of a software company in connection with the company’s alleged overstated revenue as part of two public stock offerings.[39]  The complaint, filed in the U.S. District Court for the Southern District of New York, alleged that the former Chair, CEO, and President fabricated reports of successful testing of a software program, which resulted in the company’s recognizing $1.3 million in revenue—nearly all of its revenue leading up to its IPO.  The SEC also alleged that the former CFO and former audit committee Chair learned that these reports were false during the company’s secondary stock offering, but continued to make false statements about revenue, and, along with the third defendant, made related misrepresentations to the company’s auditor.  The former Chair, CEO, and President has agreed to a partial settlement of a permanent injunction, but continues to litigate the appropriate remedies.  The SEC is seeking injunctions and civil penalties against the other two defendants, as well as disgorgement and prejudgment interest and reimbursement from the former CFO.  The U.S. Attorney’s Office for the Southern District of New York also announced charges against the former Chair, CEO, and President.

In November 2024, the SEC announced settled charges against a major logistics company for allegedly misrepresenting its earnings by failing to follow generally accepted accounting principles (GAAP) in valuing one of its business units.[40]  Though the company had booked a goodwill impairment with respect to the business unit at issue, the SEC alleged that the company should have booked the impairment earlier than it had, and that its late recognition of the impairment was due to purported overreliance on an allegedly inadequate analysis by a third-party consultant showing no loss in value.  Without admitting or denying the findings, the company agreed to pay a $45 million civil penalty and committed to certain undertakings, including the adoption of training requirements for certain officers and employees, as well as retention of an independent compliance consultant to review and make recommendations about its fair value estimates and disclosure obligations.

C.  Public Statements and Disclosures

In mid-August, the SEC announced settled charges against a publicly traded Florida-based company and its founder for allegedly failing to disclose information related to pledges of company securities.[41]  In its order, the SEC alleged that the company’s founder had pledged approximately 51 to 82 percent of the company’s securities as collateral to secure personal loans and had allegedly failed to disclose such beneficial ownership to the SEC.  Further, the SEC alleged that the company had also failed to disclose the founder’s pledges of securities in its filings to the Commission and its investors.  In agreeing to settle the charges, the Commission considered the cooperation of the company and the founder, including providing to the Commission compilations of relevant documents, information, and data.  Without admitting or denying the charges, the company and the founder agreed to pay civil penalties of $1.5 million and $500,000, respectively.

In early September, the SEC announced settled charges against a publicly traded Massachusetts- and Texas-based company for allegedly making inaccurate statements to the SEC and its investors regarding the recyclability of its product.[42]  The SEC alleged that in the company’s 2019 and 2020 annual filings, the company indicated that its product was recyclable despite allegedly having some potential knowledge to the contrary.  Without admitting or denying the charges, the company agreed to pay a civil penalty of $1.5 million.

Later in September, the SEC announced settled charges against a biotechnology company related to alleged misrepresentations and omissions made during and after the company’s IPO.[43]  According to the SEC, the company misled investors regarding a large market opportunity, revenue prospects, and a customer pipeline for its products.  Despite allegedly receiving contradictory analysis from its sales team which valued the company’s total market opportunity at five to 10 percent of the initial published projection, the company allegedly failed to reassess the market opportunity it touted to investors.  Similarly, in the leadup to its IPO, the company allegedly shared revenue projections with research analysts that lacked a reasonable basis and were materially higher than the projections prepared by the company’s own sales team.  Lastly, the company allegedly misled investors about the strength of its customer pipeline, omitting key adverse facts known to the company’s sales team, including delays, dropouts, and growing concerns about potential purchases.  The company settled the charges without admitting or denying the SEC’s findings, agreeing to continue cooperating with the SEC’s investigation and to pay a $30 million civil penalty.  The settlement is subject to bankruptcy court approval because of the company’s pending bankruptcy proceeding.

Also in September, the SEC announced settled charges against the former CEO and independent director of a publicly traded consumer goods company, alleging violations of the proxy disclosure provisions of the federal securities laws.[44]  The SEC filed a complaint in the U.S. District Court for the Southern District of New York alleging that the former CEO—who was elected an independent director in 2020—failed to disclose that he maintained a close personal friendship with an executive at the company.  The former CEO also allegedly asked the executive to hide the fact of their relationship to avoid the appearance of bias, so that the former CEO could, as part of his independent director role, participate in the CEO succession process, in which the executive was being evaluated for appointment as the next CEO.  The former CEO settled the charges without admitting or denying the SEC’s allegations, agreeing to a five-year officer-and-director bar, permanent injunction, and civil penalty of $175,000.

In October, the SEC announced settled charges against four current and former publicly traded technology companies for allegedly making materially misleading disclosures to the Commission and investors regarding significant cybersecurity incidents that the companies had experienced in 2020.[45]  The SEC alleged that, despite investigating and disclosing the cybersecurity incidents in their public filings, the companies inaccurately disclosed the incidents by minimizing their significance and not providing detailed information related thereto.  The SEC further alleged that one company failed to maintain proper disclosure controls and procedures surrounding cybersecurity incidents, leading to materially misleading disclosures to the SEC and investors.  In agreeing to settle the charges, the SEC considered the cooperation and remedial measures taken by the companies, including, among others, providing Commission staff with detailed explanations, analysis, and summaries of multiple specific factual issues, promptly following up on the staff’s requests for additional documents and information, and conducting internal investigations regarding the incidents.  Without admitting or denying the SEC’s findings, the four companies agreed to pay civil penalties of $990,000, $995,000, $1 million, and $4 million.

In December, the SEC announced settled charges against a publicly traded Texas-based biotherapeutics company, its former CEO, and its former CFO for allegedly failing to disclose material information about two of the company’s drug candidates.[46]  The Commission alleged that the company failed to disclose to the SEC and its investors that two of the company’s drug candidates had been placed on an FDA clinical hold—an order to delay proposed clinical investigations—before, during, and after a 2021 public offering.  The company neither admitted nor denied the charges, and was not ordered to pay civil penalties, purportedly because of its self-reporting, cooperation, and remediation.  The individual defendants, however, agreed to pay civil penalties of $125,000 and $20,000, respectively, and the company’s former CEO further agreed to a three-year officer-and-director bar.

Also in December, the SEC announced settled charges against a New Jersey-based medical device manufacturer for allegedly misleading investors between 2016 and 2020 regarding risks associated with one of its medical devices, and for allegedly overstating the company’s income and understating its costs.[47]  The Commission alleged that the company knew that it could not obtain FDA clearance for the device, failed to make the necessary changes to the device to obtain FDA clearance, and failed to inform investors of the risk that the FDA would block sales of the device.  Further, the SEC alleged that the company misled investors regarding its profitability in 2019 by failing to follow GAAP and not accounting for costs associated with potentially recalling the device.  Without admitting or denying the charges, the company agreed to retain an independent compliance consultant to review and make recommendations concerning its disclosure controls and procedures, and to pay a civil penalty of $175 million.

Later in December, the SEC announced settled charges against a fashion retailer for allegedly failing to disclose nearly $1 million in perks to its former CEO.[48]  The SEC order alleged that the company failed to disclose the perks, mostly associated with company-authorized expensing of personal travel on privately chartered aircraft in 2019, 2020, and 2021.  In April 2023, the company released its fiscal year 2022 proxy statement, which included updated disclosures about perks in 2020 and 2021, and disclosed that the CEO voluntarily reimbursed the company around $454,000 for personal expenses.  The SEC noted the company’s self-reporting, cooperation, and remedial efforts, and therefore did not impose a civil penalty.

D.  External Accountants and Internal Accounting Controls

In early September, the SEC charged the former finance director of a technology manufacturer for allegedly manipulating the company’s internal accounting records to falsify financial results ahead of inclusion in the company’s financial statements, and that he further fabricated documents to conceal his misconduct.[49]  Through its complaint filed in the U.S. District Court for the District of Massachusetts, the SEC is seeking a permanent injunction, civil penalty, and disgorgement and prejudgment interest.  The SEC also announced settled charges against the technology manufacturer for allegedly failing to maintain sufficient internal accounting controls that could have prevented the alleged fraud and the company’s overstatement of its financial performance for 2019, 2020, and through Q3 2021, but did not charge the company with fraud.  The company was not charged a civil penalty, purportedly because the company self-reported the violations to the SEC following an internal investigation, provided substantial cooperation to Commission staff, and implemented remedial measures.  Without admitting or denying the SEC’s findings, the company agreed to cease and desist from further violations.

In mid-September, the SEC announced that two related accounting firms had agreed to settle charges in two separate cases filed by the SEC.[50]  In the first case, filed in the U.S. District Court for the Southern District of Florida, the SEC alleged that the firms improperly included indemnification provisions in engagement letters for more than 200 audits, reviews, and exams in violation of auditor independence requirements.  The SEC sought a permanent injunction, civil penalty, and disgorgement and prejudgment interest, and the firms agreed to permanent injunctions and to pay a combined $1.2 million in civil penalties and disgorgement.  In the second case, filed in the U.S. District Court for the Southern District of New York, the SEC alleged that the firms misrepresented that they complied with Generally Accepted Auditing Standards (GAAS) in two audits of FTX, including by failing to understand the risk associated with the relationship between FTX and a hedge fund controlled by FTX’s CEO.  Without admitting or denying the charges, the firms agreed to permanent injunctions and a $745,000 civil penalty—both of which the SEC sought in its complaint—and to retain an independent consultant.

In December, the SEC announced settled charges against a Louisiana-based utility company for alleged failure to maintain internal accounting controls.[51]  The SEC alleged that, starting in mid-2018, the utility company included materials and supplies at their average cost as an asset on its balance sheets despite allegedly having been warned by employees and management consultants that this asset included a substantial amount of surplus.  The SEC alleged that the utility company failed to follow GAAP by not establishing a process to identify surplus, remeasure it, and record as an expense the differences between the remeasured cost and the average cost.  Without admitting or denying the allegations in the SEC’s complaint, which was filed in the U.S. District Court for the District of Columbia, the utility company agreed to a permanent injunction, to adopt recommendations from an independent consultant, and to pay a $12 million civil penalty.

III.  Private Companies

In July, the SEC charged the founder and former CEO of a defunct social media startup for allegedly defrauding investors by making false and misleading statements about the startup’s growth and operating expenses.[52]  According to the SEC, the individual misleadingly ascribed the startup’s rising userbase to viral popularity and organic growth when, in reality, the CEO allegedly paid millions of dollars through third parties for “incent” advertisements, which offered users incentives to download the app.  The SEC also alleged that the founder and former CEO and his wife hid from investors hundreds of thousands of dollars in personal expenses related to clothing, home furnishings, travel, and everyday living expenses charged to the startup’s business credit cards.  The SEC’s complaint, filed in the U.S. District Court for the Northern District of California, seeks a permanent injunction, an officer-and-director bar, disgorgement, and civil monetary penalties.

In September, the SEC announced settled charges against a large, privately held family company and its founder, Chairman, and former CEO in connection with the public announcement of a tender offer that the company allegedly did not have the cash to purchase.[53]  The SEC alleged that the company, at the direction and approval of the founder, made a public tender offer to purchase a large, public industrial manufacturing company at $35 per share, which would have required $7.8 billion in cash to complete.  The day after the public offer was made, the founder allegedly appeared on a large national news program and stated that the company had over $10 billion in cash committed to the deal, and would not put up any company assets as collateral.  The SEC further alleged that the company had only one percent of the required $7.8 billion in cash, and that neither the company nor founder had a reasonable belief that the company had the financial means to complete the tender offer.  The tender offer was allegedly withdrawn nine days after it was first announced.  The SEC alleged violations of Section 14(e) of the Securities Exchange Act of 1934 and Rule 14e-8 thereunder.  Without admitting or denying the SEC’s findings, the founder and company agreed to cease and desist from further violations and agreed to pay civil penalties of $100,000 and $500,000 respectively.

In September, the SEC filed charges in U.S. District Court for the Northern District of California against the former CEO of a technology startup, alleging that he defrauded investors by overstating revenue and forging bank statements.[54]  The SEC’s complaint details that the CEO allegedly raised over $30 million from investors by falsely inflating the company’s annual recurring revenue in the millions of dollars, despite the actual recurring revenue never exceeding $170,000.  The complaint further alleges that the CEO misappropriated at least $270,000 of investor funds for personal expenses such as mortgage payments and home renovations.  The SEC seeks permanent injunctions, including a conduct-based injunction, disgorgement, civil penalties, and an officer-and-director bar.  The U.S. Attorney’s Office for the Northern District of California also announced criminal charges against the former CEO.

Later in September 2024, the SEC charged three former executives of a digital pharmacy startup, alleging that they defrauded investors by overstating revenue with fake prescriptions while raising over $170 million.[55]  The complaint filed in the U.S. District Court for the Eastern District of New York alleges the company used a subsidiary in India for accounting and financial analysis while barring U.S.-based employees from accessing financial systems in an alleged effort to conceal the fraud.  The SEC seeks permanent injunctions, civil money penalties, disgorgement, and officer-and-director bars against all three defendants.

In December, the SEC announced settled charges against two private companies and one registered investment adviser for failing to file Forms D on time for multiple unregistered securities offerings.[56]  The SEC alleged that over the last several years, the two private companies and the registered investment adviser independently engaged in unregistered securities offerings, soliciting hundreds of potential investors and raising close to $300 million.  In reaching a settlement, the SEC credited the parties’ remedial acts and cooperation during the investigation.  Without admitting or denying the allegations, the two private companies and the registered investment adviser agreed to pay a total of $430,000 in civil penalties.

IV.  Investment Advisers

A.  Purportedly Fraudulent Schemes

In July, the SEC charged an activist short seller and his firm for violating antifraud provisions of the federal securities laws by allegedly engaging in a $20 million scheme from March 2018 through December 2020 to defraud followers by publishing false and misleading statements regarding stock trading recommendations.[57]  According to the complaint, the short seller allegedly used his website and related social media platforms to publicly recommend taking long or short positions in various companies and held out the positions as consistent with his own and his firm’s positions.  The complaint goes on to allege that following the short seller’s recommendations, the price of the target stocks moved more than 12 percent on average, and that once the recommendations were issued and the stocks moved, the short seller and his firm allegedly reversed their positions to capitalize on the stock price movements.  Additionally, the SEC alleged that the short seller and his firm made several false and misleading statements in connection with the scheme and that they falsely represented that the short seller’s website had never received compensation from third parties to publish information about target companies when, in fact, it had.  The complaint seeks disgorgement and civil penalties against both the short seller and his firm and an officer-and-director bar, a penny stock bar and permanent injunctions against the short seller.  The Fraud Section of the Department of Justice and the U.S. Attorney’s Office for the Central District of California announced charges against the short seller as well.

In September, the SEC announced settled charges against a registered investment adviser and subsidiary of a global financial services company for alleged violations of antifraud and compliance provisions of the federal securities laws.[58]  The SEC’s order alleged that the adviser overvalued collateralized mortgage obligations and overstated the performance of client accounts holding those positions.  The order separately alleged that the adviser executed unlawful cross trades to limit certain investor losses, favoring some investors over others.  Without admitting or denying the SEC’s findings, the adviser agreed to pay a penalty and disgorgement totaling almost $80 million and to retain a compliance consultant to review its policies and procedures.

In November, the SEC charged an investment advisory firm and its owner for defrauding nearly two dozen investors out of approximately $2.1 million.[59]  The SEC alleged that the firm and owner raised $10.5 million from investors to be invested in short-term loans to professional athletes and sports agents.  However, the owner and his firm allegedly made misrepresentations to investors on undisclosed fees and took hundreds of thousands of dollars from these investments for themselves.  The owner and his firm also allegedly misappropriated $1.5 million that was supposed to be returned to investors, allegedly using the misappropriated funds for personal expenses, such as cars, rental homes, country club dues, and college tuition.  The SEC seeks a permanent injunction, disgorgement, civil monetary penalties, and a conduct-based injunction and officer-and-director bar against the firm’s owner.

In December, the SEC announced settled charges against an investment advisory firm for allegedly failing to reasonably supervise four investment advisers and registered representatives who allegedly stole millions of dollars from advisory clients and brokerage customers.[60]  The SEC alleged that the firm failed to adopt policies that could have detected and prevented the alleged theft.  Specifically, the SEC’s order alleged that the firm failed to prevent the advisers from using authorized third-party disbursements, which allowed hundreds of unauthorized transfers from customer and client accounts to adviser accounts.  Without admitting or denying the SEC’s findings, the firm consented to undertakings, including engaging a compliance consultant to review all forms of third-party cash disbursements from customer and client accounts, and to pay a $15 million penalty.

B.  Misleading Statements and Disclosures

In August, the SEC charged a China-based investment adviser, its U.S.-based holding company, and the company’s CEO with fraud violations involving the marketing of AI-based investments.[61]  The SEC’s complaint alleges that the companies and the CEO misled clients about the safety of their investments, made false claims about relationships with reputable financial and legal firms, and misled investors to believe the company would soon be listed on the NASDAQ.  The SEC further alleges that the company collected over $6 million from individual investors before cutting off client communication and taking down access to client accounts through their website.  The SEC’s complaint in the U.S. District Court for the District of South Dakota seeks a permanent injunction, disgorgement, civil penalties, and an officer-and-director bar.

In September, the SEC announced settled fraud charges against an Idaho-based investment adviser for allegedly misleading investors and failing to comply with its own investment strategy.[62]  The adviser positioned itself as having a “biblically responsible” investment strategy by utilizing a data-driven methodology to evaluate companies and exclude any companies that did not align with biblical values.  Instead, according to the SEC, from at least 2019 to March 2024, the adviser allegedly used a manual research process that did not always evaluate companies based on eligibility under the investment adviser’s own investing criteria.  The SEC also alleged that the adviser lacked written policies or procedures setting forth a process for evaluating companies’ activities as part of its investment process, which caused inconsistent application of criteria and led to investments in companies that failed to align with the adviser’s own stated criteria.  Without admitting or denying the SEC’s findings, the adviser agreed to pay a $300,000 civil penalty and to retain a compliance consultant.

In October, the SEC announced settled charges against an investment adviser for violating antifraud provisions of the federal securities laws by allegedly misrepresenting that certain environmental, social, and governance factors (ESG) exchange-traded funds would not be used to invest in companies that were involved in fossil fuel or tobacco.[63]  Between 2020 and 2022, the investment adviser allegedly used data from third-party vendors that did not screen out these company types.  This practice allegedly led to fund investments in fossil fuel and tobacco-related companies, including in coal mining and transportation, natural gas extraction and distribution, and retail sales of tobacco products.  The SEC also alleged that the adviser did not have any policies and procedures over the screening process that would exclude those company types.  Without admitting or denying the SEC’s findings, the adviser agreed to pay a $4 million civil penalty.

In November, the SEC announced settled charges against an investment advisory firm for allegedly making misleading statements about the percentage of its parent company’s assets that were ESG integrated.[64] The SEC order alleged that though the marketing materials claimed that between 70 and 94 percent of its parent company’s assets were ESG integrated, the firm did not have a policy defining ESG integration and a substantial number of assets were allegedly held in passive ETFs that did not consider ESG factors in investment decisions.  Without admitting or denying the SEC’s findings, the firm agreed to pay a $17.5 million penalty.

C.  Safeguards and Policies

In August, the SEC announced settled charges against a New York-based registered transfer agent for allegedly failing to assure that client securities and funds were protected against theft or misuse.[65] The SEC claimed that the alleged failures led to the loss of more than $6.6 million of client funds as a result of two separate cyber intrusions in 2022 and 2023. Without admitting or denying the SEC’s findings, the registered agent agreed to pay an $850,000 civil penalty.  The SEC’s order made note of the registered agent’s cooperation and remedial efforts, including the full reimbursement of all clients and accounts for losses resulting from the cyber incidents.

Also in August, the SEC announced settled charges against a New York-based registered investment adviser for failing to establish, maintain, and enforce written policies and procedures reasonably designed to prevent the misuse of material nonpublic information concerning its trading of collateralized loan obligations.[66] According to the SEC’s order, the adviser maintained a credit business through which it obtained material nonpublic information (MNPI) about companies whose loans were held in collateralized loan obligations that the adviser traded, but did not establish, maintain, or enforce any written policies or procedures concerning the potential impact of the MNPI for over five years.  Without admitting or denying the SEC’s findings, the adviser agreed to pay a $1.8 million civil penalty.  The SEC’s order made note of the adviser’s prompt remedial acts and cooperation.

In September, the SEC announced settled charges against 11 institutional investment managers for allegedly failing to file Forms 13F, which report quarterly holdings and are required for institutional investment managers that have discretion over $100 million in certain types of securities (Section 13(f) securities).[67]  Two of the managers were also charged with allegedly failing to file Forms 13H, a form required for large traders with a substantial number of transactions of securities listed on national securities exchanges.  All 11 managers settled without admitting or denying the SEC’s findings.  Nine of the managers agreed to pay an aggregate of more than $3.4 million in civil penalties, with individual penalties ranging from $175,000 to $725,000.  Two of the managers were not ordered to pay any civil penalties, however, purportedly because they self-reported the alleged violations.

D.  Recordkeeping

The Commission continues to bring heavy fines against a multitude of broker-dealers, investment advisors, and dual registrants for failing to preserve electronic communications.  As demonstrated below, this trend persisted through the second half of 2024, and the SEC has already announced settled charges related thereto so far in 2025 with Gensler as the Chair.[68]

In September, the SEC resolved three separate enforcement actions involving recordkeeping violations.  In the first action, the SEC announced settled charges against six nationally recognized statistical rating organizations for failing to maintain and preserve electronic communications.[69]  All six firms admitted to the SEC’s findings and agreed to pay an aggregate of more than $49 million in civil penalties, with firms agreeing to pay between $100,000 and $20 million individually.  Five of the firms further agreed to retain a compliance consultant.  In the second action, the SEC announced settled charges against 12 municipal advisors for failing to preserve electronic communications sent or received by personnel related to their activities as municipal advisors.[70]  Because the failures included personnel at the supervisory level, the advisors were also charged with supervision failures.  All 12 advisors admitted to the SEC’s findings and agreed to pay an aggregate of more than $1.3 million in civil penalties, with individual penalties ranging from $40,000 to over $300,000. In the third action, the SEC announced settled charges against an investment advisory firm for allegedly failing to keep records, including off-channel communications, related to recommendations and advice to purchase and sell securities.[71]  Without admitting or denying the SEC’s findings, the firm agreed to a cease and desist and a censure.  The SEC did not impose a penalty because the firm self-reported the conduct, promptly remediated the violations, and cooperated on the third-party investigation.

E.  Custody Rule

In September, the SEC announced settled charges against a registered investment adviser for allegedly failing to comply with requirements related to the safekeeping of client assets from at least 2018 through 2022 and for its use of allegedly impermissible liability disclaimers in advisory and private fund agreements beginning in 2019.[72] According to the SEC’s order, the adviser allegedly violated the “custody rule” under the Advisors Act—which requires advisers to implement various safeguarding measures unless the adviser instead distributes audited financials prepared in accordance with GAAP—because it failed to implement the enumerated safeguards or timely distribute annual audited financial statements to investors in certain private funds that it advised.  In addition, the SEC alleged that the adviser included liability disclaimers in its advisory agreements and certain private fund partnership and operating agreements that could have led a client to incorrectly believe that the client had waived non-waivable causes of action against the adviser.  The order further alleged that certain of the liability disclaimers also contained misleading statements regarding the adviser’s otherwise unwaivable fiduciary duty.  Without admitting or denying the SEC’s findings, the adviser agreed to pay a $65,000 civil penalty.  According to the order, the SEC considered the adviser’s remedial acts—which included revising its procedures regarding compliance with the custody rule, and removing problematic clauses from its advisory and private fund agreements—when deciding upon settlement.

Also in September, the SEC announced settled charges against a privately held Florida-based advisory firm for allegedly violating the custody rule by purportedly failing to ensure that certain crypto assets held by its client were maintained with a qualified custodian.[73] The SEC further alleged that the firm misled certain investors by representing to them that redemptions required at least five business days’ notice before month-end while allowing other investors to redeem with fewer days’ notice.  The firm agreed, without admitting or denying the allegations, to a civil penalty of $225,000.

F.  Marketing Rule

In September, the SEC announced settled charges against nine registered investment advisers for violating the new Marketing Rule by allegedly disseminating advertisements that included untrue or unsubstantiated statements of material facts, testimonials, endorsements, or third-party ratings without required disclosures.[74]  All nine advisers settled without admitting or denying the SEC’s findings and agreed to pay an aggregate of $1.24 million in civil penalties, with individual penalties ranging from $60,000 to $325,000, and to review their advertisements and certify compliance with the Marketing Rule.

V.  Broker-Dealers

A.  Regulation Best Interest and Pricing

In September, the SEC announced settled charges against a Tennessee-based broker-dealer for failing to maintain and enforce policies and procedures reasonably designed to achieve compliance with Regulation Best Interest (Reg BI).[75]  The SEC alleged that, in 2021, the company merged with another broker-dealer, but due to incompatibilities between the two parties’ systems, the company lacked accurate customer information for more than 5,000 customer brokerage accounts that migrated to its platform.  Additionally, the SEC alleged the new registered representatives that joined the company post-merger did not have access to the site the company used to review structured notes transactions flagged as non-compliant and that, as a result, the company approved such note recommendations without all the documentation required by its own Reg BI policies and procedures.  Without admitting or denying the allegations, the broker-dealer agreed to a civil penalty of $325,000.

In October, the SEC announced settled charges against two affiliates of a large multinational financial services firm in five separate enforcement actions for allegedly misleading disclosures to investors, breach of fiduciary duty, prohibited joint transactions and principal trades, and failure to make recommendations in the best interest of customers.[76] Without admitting or denying the SEC’s findings, the affiliates agreed to pay more than $151 million in combined civil penalties and voluntary payments to investors.

The first three enforcement actions pertained to one affiliate.  The first of these orders alleged that the affiliate made misleading disclosures to investors about the extent to which it had discretion over when to sell and the number of shares to be sold, subjecting customers to market risk and failing to sell certain shares for months, which resulted in a decline in value.  The second order alleged that the affiliate failed to fully and fairly disclose the financial incentive that it and its advisers had when recommending their own portfolio management programs over third-party programs between July 2017 and October 2024. The third SEC order alleged that, in violation of Reg BI, the affiliate recommended certain mutual fund products to its retail brokerage customers despite the fact that materially less expensive ETF products already existed, and offered the same portfolio as being available between June 2020 and July 2022. No civil penalty was imposed in this third order, as the affiliate promptly self-reported, conducted an internal investigation, provided substantial cooperation, and voluntarily repaid impacted customers approximately $15.2 million.

The other two enforcement actions pertained to the second affiliate.  The first of these orders alleged that the affiliate caused $4.3 billion in prohibited joint transactions that advantaged an affiliated foreign money market fund.  The second SEC order alleged that this same affiliate engaged in or caused 65 prohibited principal trades with a combined notional value of approximately $8.2 billion between July 2019 and March 2021. The order alleged that the affiliate directed an unaffiliated broker-dealer to buy commercial paper or short-term fixed income securities from the affiliate, which the affiliate then purchased back on behalf of its clients.

B.  Market Manipulation

In September, the SEC announced settled charges against a registered broker-dealer for allegedly manipulating the U.S. Treasury cash securities market through an illicit trading strategy known as spoofing.[77]  The SEC order alleged that between April 2018 and May 2019, a trader employed by the broker-dealer entered orders on one side of the market that they had no intention of executing in order to obtain more favorable execution prices on bona fide orders on the other side of the market.  Allegedly, once the bona fide orders were filled, the spoofed orders were then canceled.  The broker-dealer allegedly lacked adequate controls and failed to take reasonable steps to scrutinize the trader after receiving warnings of his potentially irregular trading activity.  The broker-dealer settled the charges and agreed to pay a penalty and disgorgement totaling more than $6.9 million, which will be credited from a monetary sanction of more than $15 million from a deferred prosecution agreement the broker-dealer entered into with the DOJ.  The broker-dealer separately agreed to pay a $6 million fine to FINRA to resolve related charges.

C.  Safeguards and Policies

In July, the SEC announced settled charges against a California-based parent company of a cryptocurrency bank, its former CEO, and former Chief Risk Officer for allegedly misleading investors.[78]  The Commission alleged that from 2022 to 2023, the company and its officers misled investors about the strength of its Bank Secrecy Act/Anti-Money Laundering compliance program and falsely stated in its SEC filings that it conducted ongoing monitoring of its high-risk crypto customers.  The SEC further alleged that following the collapse of one of its customers, the company misrepresented its financial condition.  Without admitting or denying the charges, the company agreed to pay a civil penalty of $50 million, and its officers agreed to pay civil penalties of $1 million and $250,000, respectively, in addition to five-year officer-and-director bars.  In parallel actions, the company also settled charges with the Federal Reserve System (FRB) and the California Department of Financial Protection and Innovation (DFPI).

In August, the SEC announced settled charges against a New York-based broker-dealer for allegedly failing to adopt or implement reasonably designed anti-money laundering policies and procedures between March 2020 to May 2023.[79]  As a result, the broker-dealer allegedly did not surveil certain types of purportedly risky transactions for red flags of potentially suspicious conduct, nor did it allocate sufficient resources to review alerts generated from its automated surveillance of other types of transactions.  Without admitting or denying the alleged facts, the broker-dealer agreed to a censure and a cease-and-desist order, in addition to paying a $1.19 million penalty.

In September, the SEC announced settled charges against two investment adviser firms for allegedly exceeding clients’ designated investment limits over a two-year period beginning in March 2016.[80] The SEC order alleged that one of the firms was the primary investment adviser and portfolio manager for a trading strategy in which options were traded in a volatility index with the aim of generating incremental returns.  The firm allegedly allowed many accounts to exceed the exposure levels that investors had set, including dozens of accounts that exceeded the limit by 50 percent or more.  The other firm allegedly introduced its clients to the trading strategy despite knowing that investors’ exposure levels were being exceeded, and purportedly failed to adequately inform affected investors.  Both firms allegedly received management and incentive fees, as well as trading commissions from the trading strategy.  The SEC also alleged that both firms neglected to adopt and implement policies and procedures reasonably designed to ensure that they kept their clients abreast of material facts and excessive exposure.  Without admitting or denying the findings, both firms agreed to civil penalties and disgorgement totaling $5.5 million and $3.8 million, respectively.

In November, the SEC announced settled charges against three broker-dealers related to suspicious activity reports (SARs) filed by the broker-dealers that allegedly lacked certain important, required information.[81] Over a four-year period beginning in 2018, the three broker-dealers filed multiple allegedly deficient SARs in violation of Section 17(a) of the Exchange Act, as well as Rule 17a-8 promulgated thereunder.  Without admitting or denying the charges, the firms agreed to civil penalties of $125,000, $75,000, and $75,000, respectively, and two of the broker-dealers further agreed to have their anti-money laundering programs reviewed by compliance consultants.

In December, the SEC filed charges against a registered investment adviser for allegedly failing to establish, implement, and enforce written policies and procedures reasonably designed to prevent the misuse of material nonpublic information (MNPI) relating to its participation on ad hoc creditors’ committees.[82]  The SEC’s complaint focused on one of the investment adviser’s attorney-consultants, who sat on the private side of the investment adviser’s information barrier, which was the subject of extensive policies and procedures.  The SEC alleged that this attorney-consultant sat on an ad hoc creditors’ committee in connection with certain distressed municipal bonds and received MNPI pursuant to a customary confidentiality agreement.  According to the complaint, the attorney-consultant then allegedly had unspecified communications with the investment adviser’s public trading desk when he had MNPI and while the firm continued to buy the distressed issuer’s bonds.  The SEC did not allege, and presumably had no evidence, that any MNPI was communicated by the attorney-consultant to the public-side investment team; nor did the SEC allege any improper trading violation of any kind nor any harm to investors.  The investment adviser is charged with allegedly violating provisions of the Investment Advisers Act of 1940 related to establishing and enforcing reasonably designed compliance policies and procedures.  The SEC is seeking a civil penalty and permanent injunctive relief.  The investment adviser has stated that it fully cooperated with the SEC in its years-long investigation and would not agree to settle a dispute in which there was no wrongdoing nor any deficiency in its detailed information barrier policies or its compliance program.

D.  Recordkeeping

In August, the SEC announced settled charges against 26 broker-dealers and investment advisers for alleged widespread and longstanding failures by the firms and their personnel to maintain and preserve electronic communications.[83] The firms admitted to the facts alleged against them and agreed to pay civil penalties of $392.75 million in the aggregate, ranging between $400,000 and $50 million each.  Three of the firms self-reported their violations and resultingly incurred lower civil penalties.  The CFTC also announced settlements for related conduct with three of the entities.

In September, the SEC announced settled charges against 12 broker-dealers and investment advisers for failures to maintain and preserve electronic communications.[84] The firms admitted to the facts alleged against them and agreed to pay civil penalties of over $88 million in the aggregate, ranging between $35 million and $325,000. One firm will not pay a penalty because it self-reported, self-policed, and demonstrated substantial efforts at compliance.  Two other firms similarly self-reported and incurred lower civil penalties as a result.  The CFTC announced a settlement for related conduct with an additional entity on the same day.

E.  Failure to Register

In September, the SEC announced settled charges against three sales agents from a Delaware investment advisor for unregistered broker activity, including selling membership interests in LLCs that purported to invest in shares of pre-IPO companies.[85] The SEC alleged that the sales agents engaged in broker activities—including providing investors with marketing materials, advising investors on the merits of investments, and receiving transaction-based compensation—despite not being registered as brokers.  Without admitting or denying the findings, each sales agent agreed to industry and penny stock bars, and to pay disgorgement ranging from $431,287 to $1,392,367, along with a civil penalty ranging from $90,000 to $300,000.  One of the sales agents also settled related fraud charges that the SEC had previously announced in March 2023.

F.  Technical Violations

In December, the SEC announced settled charges against two broker-dealer firms for failing to provide complete and accurate securities trading information to the SEC, known as blue sheet data.[86]  The SEC orders found that, over a period of several years, due to a number of errors, one broker-dealer made approximately 11,195 blue sheet submissions to the SEC with missing or inaccurate data, while the other firm made approximately 3,679 submissions with misreported or missing data.  The SEC orders did find that both broker-dealers engaged in remedial efforts to correct and improve their blue sheet reporting systems and controls, and that one of the broker-dealers self-identified and self-reported all but one of the errors affecting its blue sheet submissions.  The broker-dealers admitted the findings, agreed to be censured, and to each pay a $900,000 penalty.  The broker-dealers separately settled with FINRA for related conduct.

Also in December, the SEC announced settled charges against a registered broker-dealer for failing to file certain Suspicious Activity Reports (SARs) in a timely manner.[87]  According to the order, in certain instances between April 2019 and March 2024, the broker-dealer received requests in connection with law enforcement or regulatory investigations/litigation but allegedly failed to conduct or complete SARs investigations within a reasonable period of time.  The broker-dealer settled the charges and agreed, without denying or admitting the allegations, to pay a $4 million civil penalty, to a censure, and to cease and desist.

VI.  Cryptocurrency

A.  Purported Fraud

In July, the SEC filed fraud charges against a high-profile software engineer and social media platform founder.[88]  The SEC accused the individual of raising more than $257 million from unregistered offers and sales of crypto assets, while falsely telling investors that proceeds would not be used to compensate him or other employees.  The SEC alleged that the individual nonetheless spent more than $7 million of investor funds on personal expenditures, and further misled investors by portraying his company as a decentralized project.  The individual was charged with violating the registration and anti-fraud provisions of the Securities Act of 1933 and the anti-fraud provisions of the Securities Exchange Act of 1934.

In August, the SEC announced partially settled fraud charges against a privately held entity, the entity’s co-owner and CEO, its co-owner and COO, and its promoters.[89] The SEC alleged that, from 2019 through 2023, the entity was operated as a multi-level marketing and crypto asset investment program.  The SEC further alleged that the entity and individuals misled investors by claiming they would invest their funds on crypto assets and foreign exchange markets despite using the majority of investor funds to make payments to existing investors and to pay commissions to promoters.  The co-owners further allegedly siphoned millions of dollars of investor assets for themselves, allegedly raising more than $650 million in crypto assets from more than 200,000 investors worldwide.  The SEC charged most parties involved with violations of the registration regulations and antifraud provisions of the federal securities laws, and seeks permanent injunctive relief, disgorgement of ill-gotten gains, and civil penalties.  The case is still ongoing against the entity and co-owners, but one of the parties involved agreed, without admitting or denying the allegations, to a $100,000 civil penalty and an injunction.

B.  Unregistered Offerings

In August, the SEC charged a privately held Georgia-based crypto asset lender for allegedly operating as an unregistered investment company and for offering unregistered securities.[90]  The SEC Complaint alleged that, in and around 2020, the company used their crypto lending program to offer and sell a product, which the SEC alleged qualified as a security, that allowed U.S. investors to tender their crypto assets in exchange for the company’s promise to pay a variable interest rate.  The SEC further alleged that the company operated for at least two years as an unregistered investment company because it issued securities and held more than 40 percent of its total assets, excluding cash, in investment securities, including its loans of crypto assets to institutional borrowers.  The company agreed, without admitting or denying the allegations, to an injunction and to pay a civil penalty of $1,650,000.

In September, the SEC announced settled charges against a privately held New Jersey-based investment platform.[91]  The SEC alleged that since at least 2020, the company operated as a broker and clearing agency by providing U.S. customers the ability, through the company’s online trading platform, to trade crypto assets allegedly being offered and sold as securities without complying with the registration provisions of the federal securities laws.  The company agreed, without admitting or denying the allegations, to the entry of a cease-and-desist order, to pay a penalty of $1.5 million, and to liquidate any crypto assets being offered and sold as securities that the company is unable to transfer to its customers, and return the proceeds to the respective customers.  The company publicly announced that the only crypto assets that will continue to be traded on their platform will be Bitcoin, Bitcoin Cash, and Ether.

Also in September, the SEC announced settled charges against a decentralized finance protocol and its three co-founders for allegedly misleading investors and engaging in unregistered broker activity.[92]  The SEC order alleged that the protocol conducted unregistered offers and sales of securities by offering investors crypto asset investment funds using tokens that earned returns as well as offering certain investors governance tokens.  The SEC also alleged that the protocol and its co-founders misled investors by touting high annual percentage yields without accounting for the various fees charged and by telling investors their assets would be rebalanced automatically, when in actuality the rebalancing mechanism often required manual input, which was, in some cases, not initiated.  The protocol and its co-founders, without admitting or denying the SEC’s allegations, agreed to various forms of relief to settle the SEC’s charges, including permanent injunctions, conduct-based injunctions, civil penalties, disgorgement, and equitable officer-and-director bars against the co-founders for a period of five years.

Later in September, the SEC announced settled charges against an issuer of a purported stablecoin and the developer and operator of a lending protocol.[93]  The SEC alleged that the companies, from November 2020 until April 2023, engaged in the unregistered offer and sale of investment contracts, which the SEC alleged qualified as securities, in the form of the stablecoin.  The SEC further alleged that the companies falsely marketed the investment contracts as safe and trustworthy by claiming that the stablecoin was fully backed by U.S. dollars or their equivalent, despite investing a substantial portion of the assets purportedly backing the stablecoin in a speculative and risky offshore investment fund to earn additional returns for the companies.  The companies agreed, without admitting or denying the allegations, to the entry of final judgments enjoining them from violating applicable provisions of the federal securities laws and to pay civil penalties of $163,766 each.  The issuer of the stablecoin also agreed to pay a disgorgement of $340,930.

At the end of September, the SEC announced settled charges against two affiliated entities, one a purported decentralized autonomous organization, and the other a Panamanian entity.[94]  The SEC alleged that the entities engaged in the unregistered offer and sale of certain crypto assets, which the SEC alleged qualified as securities, since August 2021, raising more than $70 million.  According to the SEC Order, the entities engaged in unregistered broker activity related to the allegedly unregistered securities by actively soliciting and recruiting users to trade securities, providing advice and valuations as to the merits of an investment in securities, and helping to facilitate securities transactions on their platform by assisting customers in opening accounts and regularly handling customer funds and securities.  The entities settled the charges and agreed, without admitting or denying the allegations, to injunctions and orders to collectively pay nearly $700,000 in civil penalties.  The entities further agreed to destroy certain crypto tokens, to request the removal of those tokens from trading platforms, and to refrain from soliciting any trading platform to allow trading in, offering, or selling those tokens.

In October, the SEC filed charges against a privately held Chicago-based crypto market-maker.[95]  The SEC alleged that the company operated as an unregistered dealer in more than $2 billion of crypto assets offered and sold as securities from at least March 2018 through the present.  According to the SEC’s Complaint, public statements made by the issuers and promoters of the crypto assets, and retransmitted by the company, would have led investors to reasonably believe that the crypto assets were being offered as investment contracts that, according to the SEC, qualified as securities.  Therefore, the SEC alleged that, because the company did not register its offering of the crypto assets, it failed to comply with the Securities Exchange Act of 1934’s registration requirements for dealers of securities.  The SEC is seeking permanent injunctive relief, disgorgement of ill-gotten gains, prejudgment interest, and civil penalties.

VII.  Insider Trading

Insider Trading proved yet again to be a consistent area of enforcement for the Commission in 2024.  Indeed, the Commission has already announced settled insider trading charges in 2025 under Gensler,[96] and nothing suggests that this area will receive any less attention under the new administration.

In September, the SEC filed insider trading charges against a former employee of a national consulting firm, his father, and his two friends.[97]  In the complaint, the SEC alleged that the employee obtained material nonpublic information (MNPI) indicating that his firm’s client was interested in purchasing an infrastructure business, and that the employee tipped that information to his father and friend, who then shared the information with another mutual friend.  The employee’s father and friends then traded on this MNPI and collectively realized approximately $1.1 million in ill-gotten profits.  The defendants agreed to a to-be-determined civil penalty and the father and two friends agreed to disgorgement of the ill-gotten gains.  The U.S. Attorney’s Office for the Southern District of Florida also filed parallel criminal charges against all four individuals.[98]  Three of the defendants entered guilty pleas and one entered a joint motion with the government for pretrial diversion.

Also in September, the SEC filed charges against a U.K. citizen, alleging that he had violated the antifraud provisions of the federal securities laws by engaging in a “hack to trade” scheme.[99]  As part of that scheme, the individual allegedly hacked into computer systems of five U.S. public companies—by allegedly resetting several senior-level executives’ email passwords—to obtain MNPI about the companies’ corporate earnings, including draft earnings releases, press releases, and scripts.  The SEC alleges that the individual used such information to earn $3.75 million in illicit profits by establishing large and risky option positions in the companies and then later selling his positions after the companies made impactful public earnings announcements.  The Commission seeks injunctive relief, disgorgement, and civil penalties.  In a parallel action, the U.S. Attorney’s Office for the District of New Jersey announced criminal charges against the individual.[100]

Also in September, the SEC announced settled charges against 23 entities and individuals for alleged failures to timely report information about their holdings and transactions in public company stock.[101] The charges came as a result of the SEC’s enforcement initiatives on (1) Schedules 13D and 13G reports, which provide information about the holdings and intentions of investors who own more than five percent of the registered voting shares of a public company stock, and (2) Forms 3, 4, and 5, which are required to be filed by certain corporate insiders who own more than 10 percent of their company’s stock.  The SEC alleged that the charged entities and individuals filed the required reports late.  Without admitting or denying the SEC’s findings, all of the entities and individuals agreed to cease and desist from further violations and have agreed to pay an aggregate of more than $3.8 million in civil penalties; the entities have agreed to pay between $40,000 and $750,000, while the individuals have agreed to pay between $10,000 and $200,000. Two of the entities are public companies that the SEC alleged contributed to the filing failures, and each has agreed to pay $200,000 in civil penalties.

In December, the SEC and DOJ filed insider trading charges against the former CEO of a publicly traded telecommunications company.[102]  The SEC’s complaint alleges that the CEO received a confidential presentation regarding the company’s upcoming earnings results, and that several days later, the CEO learned he would be terminated for cause.  Shortly after being terminated, and while being subject to two trading blackout periods, the CEO allegedly sold shares of the company and directed his financial advisor to sell shares held in a joint account.  A week later, the company announced negative quarterly earnings, which caused its stock price to fall more than 25 percent.  The SEC alleges that, because the SEC sold shares in advance of the negatively impactful earnings release, the CEO avoided losses of over $12,400.  Moreover, according to the SEC’s complaint, although the CEO’s financial advisor was unable to trade the shares within the CEO’s joint account due to a blackout period, the CEO would have avoided an additional $110,000 of losses had the financial advisor proceeded with the trades.  The complaint seeks permanent injunctions, disgorgement, civil penalties, and an officer or director bar.

[1] SEC Press Release, SEC Announces Enforcement Results for Fiscal Year 2024 (Nov. 22, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-186.

[2] See Dave Michaels, SEC Writes Off $10 Billion in Fines it Can’t Collect, The Wall Street Journal (Dec. 31, 2024), available at https://www.wsj.com/finance/regulation/sec-fines-penalties-collection-write-off-071cb768.

[3] SEC Press Release, SEC Announces Departure of Enforcement Director Gurbir S. Grewal (Oct. 2. 2024), available at https://www.sec.gov/newsroom/press-releases/2024-162.

[4] SEC Press Release, SEC Announces Record Enforcement Actions Brought in First Quarter of Fiscal Year 2025 (Jan. 17, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-26.

[5] CFTC Press Release, CFTC Releases FY 2024 Enforcement Results (Dec. 4, 2024), available at https://www.cftc.gov/PressRoom/PressReleases/9011-24; CFTC Press Release, CFTC Releases FY 2023 Enforcement Results (Nov. 7, 2023), available at https://www.cftc.gov/PressRoom/PressReleases/8822-23.

[6] See SEC v. Ripple Labs, Inc. 2024 WL 3730403 (S.D.N.Y. Aug. 7, 2024).

[7] SEC Press Release, SEC Crypto 2.0: Acting Chairman Uyeda Announces Formation of New Crypto Task Force (Jan. 21, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-30.

[8] SEC Press Release, SEC Announces Enforcement Results for Fiscal Year 2024 (Nov. 22, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-186.

[9] SEC Press Release, SEC Charges Seven Public Companies with Violations of Whistleblower Protection Rule (Sept. 9, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-118.

[10] SEC Press Release, J.P. Morgan to Pay $18 Million for Violating Whistleblower Protection Rule (Jan. 16, 2024), available at https://www.sec.gov/news/press-release/2024-7.

[11] In the Matter of Marathon Asset Management, L.P., Inv. Advisers Act Rel. No. 6737 (Sept. 30, 2024), available at https://www.sec.gov/files/litigation/admin/2024/ia-6737.pdf.

[12] SEC Press Release, Keith E. Cassidy Named Interim Acting Director of the Division of Examinations (July 22, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-87.

[13] SEC Press Release, SEC Announces Departure of Trading and Markets Division Director Haoxiang Zhu (Dec. 9, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-191.

[14] SEC Press Release, SEC Announces Departure of Corporation Finance Division Director Erik Gerding (Dec. 13, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-200.

[15] SEC Press Release, SEC Announces Chief Accountant Paul Munter to Retire From Federal Service This Month (Jan. 14, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-9.

[16] SEC Press Release, Acting Chairman Mark T. Uyeda Names Acting Senior Staff (Jan. 24, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-31.

[17] SEC Press Release, SEC Announces Departure of Chief Economist Jessica Wachter (Jan. 15, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-11.

[18] SEC Press Release, Acting Chairman Mark T. Uyeda Names Acting Senior Staff (Jan. 24, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-31.

[19] SEC Press Release, SEC Announces Departure of General Counsel Megan Barbero (Jan. 16, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-13.

[20] SEC Press Release, Acting Chairman Mark T. Uyeda Names Acting Senior Staff (Jan. 24, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-31.

[21] SEC Press Release, SEC Announces Departure of Director of International Affairs YJ Fischer (Jan. 16, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-14.

[22] SEC Press Release, Acting Chairman Mark T. Uyeda Names Acting Senior Staff (Jan. 24, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-31.

[23] SEC Press Release, SEC Announces Departure of Chief of Staff Amanda Fischer (Jan. 17, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-23.

[24] SEC Press Release, SEC Policy Director Corey Klemmer to Step Down (Jan. 17, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-24.

[25] SEC Press Release, SEC Announces Departure of Public Affairs Head Scott Schneider (Jan. 17, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-25.

[26] SEC Press Release, SEC Announces Departure of Acting Enforcement Director Sanjay Wadhwa (Jan. 17, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-28.

[27] SEC Press Release, Acting Chairman Mark T. Uyeda Names Acting Senior Staff (Jan. 24, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-31.

[28] SEC Press Release, SEC Charges Broker-Dealer Nationwide Planning and Two Affiliated Investment Advisers with Violating Whistleblower Protection Rule (Sept. 4, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-115.

[29] SEC Press Release, SEC Charges Seven Public Companies with Violations of Whistleblower Protection Rule (Sept. 9, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-118.

[30] SEC Press Release, EC Charges Advisory Firm GQG Partners With Violating Whistleblower Protection Rule (Sept. 26, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-150.

[31] SEC Press Release, SEC Awards More Than $37 Million to a Whistleblower (July 17, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-85.

[32] SEC Press Release, SEC Awards Whistleblower More Than $37 Million (July 29, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-90.

[33] SEC Press Release, SEC Issues Awards Totaling $98 Million to Two Whistleblowers (Aug. 23, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-103.

[34] SEC Press Release, SEC Issues $24 Million Awards to Two Whistleblowers (Aug. 26, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-104.

[35] SEC Press Release, SEC Issues $12 Million Award to Joint Whistleblowers (Oct. 10, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-168.

[36] SEC Press Release, SEC Charges Meta Materials and Former CEOs With Market Manipulation, Fraud and Other Violations (June 25, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-77.

[37] SEC Press Release, SEC Charges U.S. Navy Shipbuilder Austal USA with Accounting Fraud (Aug. 27, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-108.

[38] SEC Press Release, SEC Charges Ideanomics and Three Senior Executives with Accounting and Disclosure Fraud (Aug. 9, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-94.

[39] SEC Press Release, SEC Charges Former Chairman and CEO of Tech Co. Kubient with Fraud and Lying to Auditors (Sep. 16, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-131.

[40] SEC Press Release, UPS to Pay $45 Million Penalty for Improperly Valuing Business Unit (Nov. 22, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-184.

[41] SEC Press Release, SEC Charges Carl Icahn and Icahn Enterprises L.P. for Failing to Disclose Pledges of Company’s Securities as Collateral for Billions in Personal Loans (Aug. 19, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-99.

[42] SEC Press Release, SEC Charges Keurig with Making Inaccurate Statements Regarding Recyclability of K-Cup Beverage Pod (Sept. 10, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-122.

[43] SEC Press Release, SEC Charges Zymergen Inc. With Misleading IPO Investors About Company’s Market Potential and Sales Prospects (Sept. 13, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-129.

[44] SEC Press Release, SEC Charges Independent Director and Ex-CEO of Church & Dwight With Concealing Close Friendship with Company Executive (Sept. 30, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-161.

[45] SEC Press Release, SEC Charges Four Companies With Misleading Cyber Disclosures (Oct. 22, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-174.

[46] SEC Press Release, SEC Charges Kiromic BioPharma and Two Former C-Suite Executives with Misleading Investors about Status of FDA Reviews (Dec. 3, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-189.

[47] SEC Press Release, Becton Dickinson to Pay $175 Million for Misleading Investors About Alaris Infusion Pump (Dec. 16, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-201.

[48] SEC Press Release, SEC Charges Express, Inc. with Failing to Disclose Nearly $1 Million in Perks Provided to Former CEO (Dec. 17, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-203.

[49] SEC Press Release, SEC Charges Former Finance Director at CIRCOR International with Accounting Fraud (Sep. 5, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-116.

[50] SEC Press Release, Audit Firm Prager Metis Settles SEC Charges for Negligence in FTX Audits and for Violating Auditor Independence Requirements (Sep. 17, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-133.

[51] SEC Press Release, SEC Charges Utility Company Entergy Corp. with Internal Accounting Controls Violations (Dec. 20, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-206.

[52] SEC Press Release, SEC Charges Founder of Social Media Company “IRL” with $170 Million Fraud (July 31, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-92.

[53] SEC Press Release, SEC Charges Esmark Inc. and Chairman James Bouchard with Announcing False Tender Offer to Purchase U.S. Steel Corp. (Sept. 6, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-117.

[54] SEC Press Release, SEC Charges Former CEO of Tech Startup SKAEL with $30 Million Fraud (Sept. 24, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-146.

[55] SEC Press Release, SEC Charges Three Former Executives of Pharmacy Startup Medly Health Inc. with Defrauding Investors (Sept. 12, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-128.

[56] SEC Press Release, SEC Files Settled Charges Against Multiple Entities for Failing to Timely File Forms D in Connection With Securities Offerings (Dec. 20, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-210.

[57] SEC Press Release, SEC Charges Andrew Left and Citron Capital for $20 Million Fraud Scheme (July 26, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-89.

[58] SEC Press Release, SEC Charges Advisory Firm Macquarie Investment Management Business Trust with Fraud (Sept. 19, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-140.

[59] SEC Press Release, SEC Charges Advisory Firm La Mancha and its Owner David Kushner with Fraud (Nov. 21, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-183.

[60] SEC Press Release, SEC Charges Morgan Stanley Smith Barney for Policy Deficiencies that Resulted in Failure to Prevent and Detect its Financial Advisors’ Theft of Investor Funds (Dec. 9, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-193.

[61] SEC Press Release, SEC Charges China-based QZ Asset Management Ltd. and its CEO in Pre-IPO Fraud Scheme (Aug. 27, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-109.

[62] SEC Press Release, SEC Charges Advisory Firm Inspire Investing With Misleading Investors Regarding Its Investment Strategy (Sept. 19, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-139

[63] SEC Press Release, SEC Charges Advisory Firm WisdomTree with Failing to Adhere to Its Own Investment Criteria For ESG-Marketed Funds (Oct. 21, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-173.

[64] SEC Press Release, SEC Charges Invesco Advisers for Making Misleading Statements About Supposed Investment Considerations (Nov. 8, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-179.

[65] SEC Press Release, SEC Charges Transfer Agent Equiniti Trust Co. with Failing to Protect Client Funds Against Cyber Intrusions (Aug. 20, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-101.

[66] SEC Press Release, SEC Charges Sound Point Capital Management for Compliance Failures in Handling of Nonpublic Information (Aug. 26. 2024), available at https://www.sec.gov/newsroom/press-releases/2024-106.

[67] SEC Press Release, SEC Charges 11 Institutional Investment Managers with Failing to Report Certain Securities Holdings (Sept. 17, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-135.

[68] SEC Press Release, Twelve Firms to Pay More Than $63 Million Combined to Settle SEC’s Charges for Recordkeeping Failures (Jan. 13, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-6.

[69] SEC Press Release, SEC Charges Six Credit Rating Agencies with Significant Recordkeeping Failures (Sept. 3, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-114.

[70] SEC Press Release, SEC Charges 12 Municipal Advisors With Recordkeeping Violations (Sept. 17, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-132.

[71] SEC Press Release, Advisory Firm Atom Investors, Charged with Recordkeeping Violations, Avoids Civil Penalty Because of Self-Reporting, Substantial Cooperation, and Prompt Remediation (Sept. 23, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-143.

[72] SEC Press Release, SEC Charges Advisory Firm ClearPath with Custody Rule and Liability Disclaimer Violations (Sept. 3, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-113.

[73] SEC Press Release, SEC Charges Crypto-Focused Advisory Firm Galois Capital for Custody Failures (Sept. 3, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-111.

[74] SEC Press Release, SEC Charges Nine Investment Advisers in Ongoing Sweep into Marketing Rule Violations (Sept. 9, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-121.

[75] SEC Press Release, SEC Charges Broker-Dealer First Horizon With Regulation Best Interest Violations (Sept. 18, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-136.

[76] SEC Press Release, JP Morgan Affiliates to Pay $151 Million to Resolve SEC Enforcement Actions (Oct. 31, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-178.

[77] SEC Press Release, TD Securities Charged in Spoofing Scheme (Sept. 30, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-160.

[78] SEC Press Release, SEC Charges Silvergate Capital, Former CEO for Misleading Investors about Compliance Program (July 2, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-82.

[79] SEC Press Release, SEC Charges OTC Link LLC with Failing to File Suspicious Activity Reports (Aug. 12, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-96.

[80] SEC Press Release, SEC Charges Merrill Lynch and Harvest Volatility Management for Ignoring Client Instructions (Sept. 25, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-147.

[81] SEC Press Release, SEC Charges Three Broker-Dealers with Filing Deficient Suspicious Activity Reports (Nov. 22, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-185.

[82] SEC Press Release, available at https://www.sec.gov/newsroom/press-releases/2024-209.

[83] SEC Press Release, Twenty-Six Firms to Pay More Than $390 Million Combined to Settle SEC’s Charges for Widespread Recordkeeping Failures (Aug. 14, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-98.

[84] SEC Press Release, Eleven Firms to Pay More Than $88 Million Combined to Settle SEC’s Charges for Widespread Recordkeeping Failures (Sept. 24, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-144.

[85] SEC Press Release, SEC Files Settled Charges Against Three StraightPath Sales Agents for Unregistered Broker Activity (Sept. 12, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-127.

[86] SEC Press Release, Wells Fargo and LPL Financial Charged for Submitting Deficient Trading Data to SEC (Dec. 20, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-207.

[87] SEC Press Release, Deutsche Bank Subsidiary to Pay $4 Million for Untimely Filing Certain Suspicious Activity Reports (Dec. 20, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-208.

[88] SEC Press Release, SEC Charges Nader Al-Naji with Fraud and Unregistered Offering of Crypto Asset Securities (Jul. 30, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-91.

[89] SEC Press Release, SEC Charges Alleged Crypto Company NovaTech and its Principals and Promoters with $650 Million Fraud (Aug. 12, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-95.

[90] SEC Press Release, SEC Charges Abra with Unregistered Offers and Sales of Crypto Asset Securities (Aug. 26, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-105; Order Granting Parties’ Consent Motion for Final Judgment, SEC v. Plutus Lending, LLC, 1:24-cv-02457-BAH (D.D.C. 2025).

[91] SEC Press Release, eToro Reaches Settlement with SEC and Will Cease Trading Activity in Nearly All Crypto Assets (Sept. 12, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-125.

[92] SEC Press Release, SEC Charges DeFi Platform Rari Capital and its Founders With Misleading Investors and Acting as Unregistered Brokers (Sept. 18, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-138.

[93] SEC Press Release, SEC Charges Crypto Companies TrustToken and TrueCoin With Defrauding Investors Regarding Stablecoin Investment Program (Sept. 24, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-145.

[94] SEC Press Release, SEC Charges Entities Operating Crypto Asset Trading Platform Mango Markets for Unregistered Offers and Sales of the Platform’s “MNGO” Governance Tokens (Sept. 27, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-154.

[95] SEC Press Release, SEC Charges Cumberland DRW for Operating as an Unregistered Dealer in the Crypto Asset Markets (Oct. 10, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-169.

[96] SEC Press Release, SEC Charges Former Public Company Officer and His Sister-In-Law with Insider Trading (Jan. 13, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-4.

[97] SEC Press Release, SEC Charges Former Financial Consultant for Providing Father and Friends Inside Information Regarding Firm’s Client (Sept. 13, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-130.

[98] U.S. Attorney’s Office Press Release, Four Miami Residents Charged with Reaping Over $1 Million From Friends and Family Insider Trading Scheme (Sept. 13, 2024), available at https://www.justice.gov/usao-sdfl/pr/four-miami-residents-charged-reaping-over-1-million-friends-and-family-insider-trading.

[99] SEC Press Release, SEC Charges U.K. Citizen in Hacking and Trading Scheme Involving Five U.S. Public Companies (Sept. 27, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-153.

[100] U.S. Attorney’s Office Press Release, U.K. National Charged with Multimillion-Dollar Hack-to-Trade Fraud Scheme (Sept. 27, 2024), available at https://www.justice.gov/usao-nj/pr/uk-national-charged-multimillion-dollar-hack-trade-fraud-scheme.

[101] SEC Press Release, SEC Levies More Than $3.8 Million in Penalties in Sweep of Late Beneficial Ownership and Insider Transaction Reports (Sept. 25, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-148.

[102] SEC Press Release, SEC Charges Ken Peterman, Former Comtech CEO, with Insider Trading in Advance of Negative Earnings Announcement (Dec. 11, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-195.

The following Gibson Dunn lawyers prepared this update: Mark Schonfeld, David Woodcock, Osman Nawaz, Tina Samanta, Timothy Zimmerman, Lauren Jackson, Michael Ulmer, Monica Woolley, Veronica Altabef, Priya Datta, Ina Kosova, Hayden McGovern, Nicholas Whetstone, Sara Zamani, Lauren Hernandez, Ty Shockley, Nell Tooley, Timoteo L’Esperance, Danilo Risteski, Trey Shomin, and Grace Summers.

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

Mark K. Schonfeld – Co-Chair, New York (+1 212.351.2433, mschonfeld@gibsondunn.com)
David Woodcock – Co-Chair, Dallas (+1 214.698.3211, dwoodcock@gibsondunn.com)
Osman Nawaz – New York (+1 212.351.3940, onawaz@gibsondunn.com)
Tina Samanta – New York (+1 212.351.2469, tsamanta@gibsondunn.com)
Lauren Cook Jackson – Washington, D.C. (+1 202.955.8293, ljackson@gibsondunn.com)
Timothy M. Zimmerman – Denver (+1 303.298.5721, tzimmerman@gibsondunn.com)

© 2025 Gibson, Dunn & Crutcher LLP.  All rights reserved.  For contact and other information, please visit us at www.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.

While the new regulations were issued during the closing days of the Biden Administration, they are the product of a broad interagency process and of policy drivers that will continue to motivate Trump Administration officials. Companies should take steps now to evaluate the impact of the regulations on their plans for AI model training and deployment, and to develop and implement the procedures that will be required to win export licenses or to qualify for licensing exceptions.

On January 13, 2025, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued an interim final rule titled “Framework for Artificial Intelligence Diffusion” (the Framework)[1] that lays the groundwork for expansive new controls targeting frontier Artificial Intelligence (AI) models themselves and the computing power to create them.  The Framework, taken together with recent U.S. Government actions targeting AI, seeks to use the current leading role played by companies based in the U.S. and a select group of allied countries in the design and production of computing power as a point of leverage to force companies, research institutes and other organizations develop AI models inside an ecosystem closely monitored by the United States and the handful of other countries that have agreed to impose similar controls.  In several ways, the Framework bookends a multiyear effort by Commerce officials and their interagency peers to control access to, and impede the indigenous development of, computing power by China, and other countries perceived to pose a threat to U.S. national security and foreign policy interests.

To this end, the Framework, through a multi-part control structure, aims to reduce the risk that “countries of concern” (i.e., countries listed in Country Group D:5, which includes Hong Kong now treated by export regulations as part of China, and Macau) obtain advanced U.S. and allied closed-weight AI models by broadly (i) expanding licensing requirements for the export of advanced integrated circuits (ICs) (ii) imposing controls on frontier AI models, and (iii) closing a significant loophole that previously allowed persons in countries of concern rent access to computing power outside their countries.  At the same time, the Framework creates a three-tiered licensing policy with a more permissive structure allowing exports to and among countries whose export controls are aligned with the U.S., imposing an effective embargo against countries the U.S. perceives as threats, and detailing a conditional policy for countries yet to adopt certain safeguards against the unchecked development of frontier AI models.  Thus, the Framework seeks to strike a balance between the goal of keeping advanced AI capabilities out of the hands of strategic competitors while facilitating the diffusion of AI technology and its benefits within a U.S.-structured AI ecosystem.

BIS uses several familiar tools to fashion the new Framework, including a new foreign direct product rule that could reach AI frontier models globally and a powerful new nationality-based license exception that conditions the powerful authorization it provides on building certain amounts of computing power within the countries whose companies are eligible to use it.  While the Trump Administration has issued an executive order[2] that authorizes the Department of Commerce to postpone the implementation of the Framework, the Framework’s export controls may meet the criteria set in President Trump’s America First Trade Policy memoranda of deploying export controls that help the United States to “maintain, obtain, and enhance” the United States’s “technological edge” and to “identify and eliminate loopholes.”  Because of this, and because the Framework is the product of a broad and sustained interagency efforts focused addressing geopolitical threats that have not changed with the new Administration, we expect that enough of the Framework will be implemented that companies in the AI model development, advanced IC manufacturing and distribution, and data center sectors should plan now for its implementation.

I. Background (Prior Actions)

The Framework in many ways bookends a series of measures aimed at targeting AI development capabilities of China and others.  In 2022, the Biden Administration’s National Security Strategy identified China as “the only competitor with both the intent to reshape the international order and increasingly, the economic, diplomatic, military, and technological power to advance that objective” and specifically identified export controls as a key tool to “ensure strategic competitors cannot exploit foundational American and allied technologies, know-how, or data to undermine American and allied security.” In October 2022, BIS put in play a “chokepoint” strategy to target indigenous Chinese semiconductor development.  It identified, broadly, within the semiconductor ecosystem, four chokepoints where the U.S. and its allies maintained significant technological advantage and crafted export controls around them: (i) ICs, (ii) semiconductor manufacturing equipment (SME), (iii) SME parts and components, and (iv) design and other software for ICs and SME.  A leading rationale for imposing these controls was to address China’s use of AI for military modernization as well as surveillance.  In October 2023, BIS updated the October 2022 controls, again specifically noting China’s use of “advanced computing ICs and supercomputing capacity in the development and deployment of [] AI models to further its goal of surpassing the military capabilities of the United States and its allies.”  Over the course of 2024, BIS clarified the scope of AI and SME controls and, expanded Authorization Validated End User (VEU) to enable data centers to receive VEU authorizations in order to facilitate the responsible diffusion of advanced AI technology.  In November 2024, the Biden Administration issued a National Security Memorandum on AI that called for, among other, ensuring the “safety, security, and trustworthiness of American AI innovation writ large.”  And, as BIS notes in the Supplemental Information to the Framework, the Department of Commerce has engaged in an extensive and ongoing policy process with partners across the U.S. Government to consider strategic, tailored, and effective controls on the diffusion of advanced AI technology to entities and destinations around the world.

II. The Framework: New Controls and Jurisdiction-Based Rules

a. “Chokepoint” Strategy for AI Development

The Framework attempts to control access to three elements critical for AI model training:

1. 1. Advanced ICs: Training advanced AI models requires large clusters of advanced computing ICs capable of handling large quantities of data and models containing large numbers of parameters. The Framework expands current restrictions and imposes a global export  licensing requirement for advanced ICs.
   2. Compute Power: These advanced IC clusters are housed within data centers, which provide processing power to run AI applications, including training and inference applications. The Framework creates multi-year quotas that meter access to computing power in most countries.  It also creates a revamped validated end user (VEU) authorization system for data centers which is premised on nationality of those seeking to procure computing power and data center country location and which conditions VEU authorization both on ensuring that the computing power required to train frontier AI models remains in installed in only a handful of countries and on the adoption of significant physical and cyber security controls.
   3. Model Weights: Model weights are numerical parameters that define the internal logic of an AI model and which are the product of model design and training. The Framework creates a new Export Control Classification Number (ECCN) 4E091 for certain advanced closed-weight AI models and imposes a global licensing requirement for such model weights (subject to license exceptions discussed below).  At present, the controls apply to model weights trained with 10^26 computational operations or more, a threshold which BIS will likely increase through amendments of the regulations over time.

b. Three-Tiered Destination-Based System

The Framework established a three-tier destination-based system that will trigger different controls based on the end user:

Tier 1:

• Tier 1 is comprised of entities located in the United States and allied jurisdictions identified in paragraph (a) of supplement no. 5 of Part 740 (currently, Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Republic of Korea, Spain, Sweden, Taiwan, and the United Kingdom). BIS and interagency drafters of the Framework deem these governments to have “implemented measures to prevent the diversion of advanced technologies” and to have created “ecosystems that will enable and encourage firms to use advanced AI models to advance the common national security and foreign policy interests of the United States and its allies and partners.”[3]

• However, an entity headquartered outside these jurisdictions or whose ultimate parent is headquartered outside these jurisdictions would not be deemed to fall within Tier 1.

• These countries continue to retain almost unrestricted access to controlled ICs and will generally have no restrictions on their access to model weights and compute power.

Tier 3:

• Tier 3 is comprised of entities headquartered in, or whose ultimate parent company is headquartered in, Macau or destinations specified in Country Group D:5 (currently, China (including Hong Kong), Afghanistan, Belarus, Burma, Cambodia, Central African Republic, Democratic Republic of the Congo, Cuba, Cyprus, Eritrea, Haiti, Iran, Iraq, North Korea, Libya, Lebanon, Russia, Somalia, Republic of South Sudan, Republic of the Sudan, Syria, Venezuela, and Zimbabwe).

• The Framework maintains the current restrictions on the supply of advanced ICs to these countries continue to remain in place and adds additional restrictions. For example, model weights cannot be supplied to Tier 3 countries and data centers in Tier 3 countries are not eligible for VEU Authorization (discussed below).

• Security requirements for Tier 2 entities incentivizes Tier 2 countries to not only adopt a posture similar to the U.S. toward Tier 3 countries, but also, in the long run, to align themselves technologically with the U.S. In addition to de facto export controls, this would mean adoption of other elements of the U.S. technological landscape such as security controls, computing and other standards and integration with existing U.S.-origin technologies.

Tier 2:

• Tier 2 encompasses entities not specified in Tier 1 or Tier 3 and includes entities located in most countries in the world.

• The Framework permits the export of AI chips and associated compute power without a license up to a capped amount of Total Processing Performance (TPP). Data center companies in these jurisdictions can apply for a BIS license to access more compute power, subject to satisfying certain security and other requirements.

• Tier 1 entities may export their model weights to Tier 2 destinations, provided that the end user has instituted specified security measures that will reduce the risk of diversion.

• Notably, Tier 2 includes both countries that are otherwise considered close allies of the United States (including countries in NATO and the European Union, Israel and Singapore) and countries that are often treated by U.S. export controls and licensing decisions as posing higher evasion risks. The common thread among Tier 2 countries is the U.S. Government’s belief that their governments have not yet adopted the kinds of export controls on advanced AI chips and access to computing power that the U.S. and other Tier 1 countries have put in place in recent years.

III. The Framework Addresses Certain Evasion Activities to Limit Access to Advanced ICs and Model Weights.

a. Worldwide Licensing Requirements

According to BIS, Chinese companies have circumvented existing restrictions by using “foreign subsidiaries in a range of uncontrolled destinations to buy ICs subject to [Export Administration Regulations (“EAR”)] controls.”  BIS views the risk of evasion through the use of subsidiaries in uncontrolled jurisdictions to be even greater for AI model weights as they can be sent anywhere in the world instantaneously once copied.

The Framework consequently imposes a license requirement to supply (i.e., export, reexport, or transfer (in-country)) controlled ICs and model weights to any end user in any destination.  However, the Framework also provides license exceptions and other mechanisms to enable access to advanced IC to certain end users and designations which pose a comparatively low risk of diversion.  The licensing requirements are thus based on the tier system described above, with permissive conditions for Tier 1 countries.

Critically, the Framework conditions access to computing power on the closing of a loophole that has troubled BIS drafters for the last several years—how to control access by Tier 3 country governments and entities to AI Infrastructure-as-a-Service (IaaS) offered by data centers outside of Tier 3 countries.  Through the imposition of this worldwide licensing requirement, and the Framework’s conditioning of parallel licensing exceptions for those procuring computing power in Tier 1 and Tier 2 countries on not providing AI IaaS to Tier 3 country users, BIS is hoping to close this loophole.[4]

b. The AI Model Weights Foreign Direct Product Rule

Tier 3 entities have increasingly turned to data centers outside the United States and cloud services to remotely access computing power as a result of regulations on advanced ICs introduced in October 2022 and October 2023, along with the financial and logistical challenges of obtaining large clusters of ICs through subsidiaries and other third parties.

Another way in which BIS attempts to limit Tier 3 access to AI IaaS is through its creation of a new foreign direct product (FDP) rule with breathtaking scope.  BIS attempts to address this evasion, through an FDP rule that claims jurisdiction over closed-weight AI models trained anywhere in the world with the use of controlled ICs.  Given that most advanced ICs manufactured globally remain dependent on at least some U.S. software, technology, and on items produced by U.S. software and technology, and that BIS has claimed jurisdiction over these advanced ICs through prior FDP rules, there will be few closed-weight AI models that would not be subject to the new licensing requirements imposed by this FDP rule.

BIS’s use of FDP rules in recent years arguably has far outpaced its ability to enforce its FDP rules outside of the United States, however, and it is unclear whether and how non-U.S. developers of new AI models will become aware of this new jurisdiction claim and whether they will submit to U.S. licensing authority.

IV. The Frameworks Offers Multiple Pathways for Exporting Advanced ICs

Despite BIS’s imposition of global licensing requirements on advanced ICs or closed weight AI models, the Framework offers several exclusions, exceptions, and favorable licensing policies that it argues will facilitate more responsible diffusion of advanced AI technology and benefits to certain end users and jurisdictions.

a. Exclusion for Open Weight Models

BIS “determined that a reasonable proxy for the performance of an AI model is the amount of compute—i.e., the number of computational operations—used to train the model.” Accordingly, the Framework places restrictions on the export of the model weights of the most advanced AI models.

The Framework’s new restrictions on the export of model weights only applies to closed-weight models trained with 10^26 computational operations or more.  The Framework explicitly excludes “open” model weights of any AI model that have been “published” as defined in 15 C.F.R. § 734.7(a) and any closed models that are less powerful than the most powerful open-weight model.

b. License Exceptions

Existing License Exceptions (NAC/ACA)

The Export Administration Regulations (EAR) existing license exceptions for Notified Advanced Computing (NAC) and Advanced Computing Authorized (ACA) will apply to authorize the export of advanced ICs classified under ECCNs 3A090, 4A090, and corresponding .z items (except for 3A090.a items designed or marketed for use in a datacenter).

License Exception Low Processing Performance (LPP)

The Framework creates License Exception LPP to permit exports of advanced computing ICs and corresponding computing power up to a per-entity allocation of 26,900,000 TPP per-calendar year to any individual Tier 2 entity.  This annual TPP limit applies to shipments to any individual Tier 2 entity even if the shipments are made by multiple exporters or reexporters or through more than one intermediate consignee.

License Exception Artificial Intelligence Authorization (AIA)

The Framework created License Exception AIA to permit exports of advanced computing ICs and corresponding computing power to Tier 1 countries.

The license exception also permits exports of otherwise controlled closed AI model weights, without an authorization, by companies headquartered in the United States and allies listed in paragraph (a) of supplement no.  5 and (i) the entities obtaining the items are located outside Macau or destinations specified in Country Group D:5; and (ii) the items will be stored in a facility that complies with the certain security standards that are set forth in supplement no. 10 to part 748.

License Exception Advanced Compute Manufacturing (ACM)

The Framework created License Exception ACM to permit exports of advanced computing ICs to “private sector end users” for the purposes of “development,” “production,” and storage (in a warehouse or other similar facility) of such ICs.  However, the license exception does not cover exports for the purpose of training an AI model or exports to Tier 3 countries.

“Private sector end user” defined as either (1) an individual who is not acting on behalf of any government (other than the U.S. Government), or (2) a commercial firm (including its subsidiary and parent firms, and other subsidiaries of the same parent) that is not wholly owned by, or otherwise controlled by any government (other than the U.S. Government).

Summary of New Licensing Requirements, License Exceptions and Exclusions and Licensing Policy

* Except for 3A090.a items designed or marketed for use in a datacenter.

c. License Review Policy (Tier 1 Presumption of Approval; Tier 2 Per-Country Allocation)

The Framework creates a presumption of approval for exports of advanced ICs and closed-weight AI models to Tier 1 countries.

The Framework provides a favorable license review policy for exports of advanced ICs and corresponding computing power up to a per-country allocation of 790,000,000 TPP for Tier 2 countries for the period from 2025 to 2027.  BIS will review applications for the supply of advanced ICs to Tier 2 countries under a presumption of approval, up to this amount.

d. Revamped VEU Authorizations

In October 2024, BIS introduced a Data Center VEU Authorization to facilitate the supply of advanced ICs to end users in destinations that do not raise national security or foreign policy concerns.  The Framework bifurcates the Data Center VEU Authorization into a Universal VEU (UVEU) Authorization and National VEU (NVEU) Authorization.

The UVEU Authorization is available only to Tier 1 entities, and, subject to certain geographic allocation limits, enables UVEU to deploy data center in Tier 2 destinations.  Specifically, a UVEU cannot transfer or install more than 25% of its total AI computing power—i.e., the AI computing power owned by the entity all its subsidiary and parent entities—to or in locations outside of Tier 1 countries.  U.S. UVEUs are required to maintain at least 50% of their total AI computing power in the United States.  Moreover, UVEUs cannot transfer or install more than 7% of its total AI computing power to or in any single Tier 2 country.  This kind of AI computing power location requirement has no precedent within the EAR, but more broadly tracks policy efforts by the Department of Commerce and interagency partners to induce the world’s leading advanced IC manufacturers to locate more of their production capacity in the United States.

The NVEU Authorization, on the other hand, is available to Tier 2 entities on a per-company, per-country basis (i.e., separate authorizations required for each Tier 2 country, even if undertaken by the same company), subject to quarterly caps.  BIS explains that these allocation caps represent computing power clusters that are approximately 12 months, or one generation, behind the cluster size it believes will be needed to train the most advanced dual-use AI models.  Importantly, the total amount of computing power authorized for exports to NVEUs will not count towards the amount of computing power allocated to a Tier 2 country.

In order to receive NVEU Authorization, a data center operator that owns its advanced computing capacity must apply to BIS and go through an intensive application process that will be subject to interagency review.  The criteria for NVEU approval are extensive and span over two pages of the Federal Register (published at least initially in a smaller font size) and include requirements on data center ownership, physical security, supply chain security, personnel security, and acceptable use criteria that are subject to documentation, auditing and reporting requirements.  Approved applicants for the NVEU Authorization will be listed in the EAR.

V. Conclusion

The Framework is a sweeping and unprecedented attempt to regulate the global diffusion of AI technology, especially to countries that pose national security and foreign policy challenges to the United States.  It reflects the U.S. Government’s recognition of the strategic importance of AI as a transformative and disruptive technology that can have profound implications for military, economic, and social domains.  It also reflects the U.S. Government’s determination to maintain its leadership and competitive edge in AI innovation, while preventing the misuse and exploitation of AI by adversaries and competitors.

The Framework drafters have acknowledged the heavy lifts that stakeholders impacted by these new regulations will be required to make by staggering its implementation dates.  The new worldwide licensing requirements on computing power and on closed-weight AI models, and associated license exceptions will not be implemented until May 15, 2025, and the significant security and other requirements associated with the VEU license exceptions will not be required to be in place until January 15, 2026.  Even if new Commerce officials opt to postpone the implementation of these new regulations by two months under authority of President Trump’s Regulatory Freeze Pending Review Executive Order, the sweeping nature of these new regulations will require many companies and other industry stakeholders to begin taking steps now to reflect new controls and to be in a position to take advantage of the different authorizations the Framework makes available.

The Framework, however, is not without its challenges and uncertainties.  It is likely to face significant critique by at least some types of AI sector stakeholder during the public comment period, which is currently scheduled to close on May 15, 2025.  It is also likely to face technical, and political hurdles, as well as potential backlash and countermeasures from affected countries and entities, as it is implemented.  On a technical level, its efficacy is premised in part on widespread awareness of the new export controls it puts in place, especially by stakeholders located outside of the United States, and it is unclear whether the Trump Administration will expend the resources required to publicize and educate non-U.S. persons on how the regulations will work, including convincing those training AI models outside the United States that their closed-weight AI models may be subject to U.S. licensing controls based on the computing power and infrastructure required to train them.  There are also data center business model and associated contract-related changes that some Tier 2 country stakeholders would be required to make to take advantage of the NVEU and LPP authorizations that will take many months to implement.

The perceived efficacy of the Framework is also challenged by the release of the Chinese company DeepSeek’s r1 open-weight AI model, which DeepSeek released after BIS published the interim final rule establishing the Framework.  In allowing exports of open-weight models without a license, BIS “assess[ed] that the most advanced open-weight models are currently less powerful than the most advanced closed-weight Models.”  However, the availability of powerful open-weight AI models like DeepSeek that approximate the capabilities of the most advanced closed-weight, and the possibility that powerful AI models could be trained with lower levels of compute power, both challenge key assumptions underlying the Framework..

Moreover, implementation of the regulations will also require extensive coordination and cooperation among U.S. allies.  On the intergovernmental level, the BIS and U.S. Government agency partners such as the Department of State will need to act and think multilaterally to continue to enjoy the cooperation of Tier 1 countries and to attract support for a U.S.-lead AI ecosystem in Tier 2 countries, which may be more difficult to do amidst threats and other actions that the Trump Administration may take unilaterally to advance the America First Trade Policy.

[1] Framework for Artificial Intelligence Diffusion, 90 Fed. Reg. 4544 (Jan. 13, 2025) (hereinafter the Framework).

[2] President Donald, J. Trump, Regulatory Freeze Pending Review Executive Order, Jan. 20, 2025 (available at https://www.whitehouse.gov/presidential-actions/2025/01/regulatory-freeze-pending-review/).

[3] Framework at 4548.

[4] For example, the Framework requires Tier 2 compute providers to institute exacting security measures, including new security measures in supplement no.  10 to part 748, to prevent the use of their compute power by Tier 3 entities.

The following Gibson Dunn lawyers prepared this update: Christopher Timura, Dharak Bhavsar, Mason Gauch, Frances Waldmann, David Wolber, and Adam M. Smith.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these issues. For additional information about how we may assist you, please contact the Gibson Dunn lawyer with whom you usually work, the authors, or the following leaders and members of the firm’s International Trade practice group:

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© 2025 Gibson, Dunn & Crutcher LLP.  All rights reserved.  For contact and other information, please visit us at www.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.

We are pleased to provide you with Gibson Dunn’s Accounting Firm Quarterly Update for Q4 2024. The Update is available in .pdf format at the below link, and addresses news on the following topics that we hope are of interest to you:

• Presidential and SEC Transitions Begin
• PCAOB Adopts Firm Reporting and Firm and Engagement Metrics Requirements
• Corporate Transparency Act Subject to Multiple Legal Battles
• PCAOB Adopts Rule to Address Filing and Fee Deficiencies
• One of Three Pending PCAOB Constitutional Challenges Dismissed
• U.K. Publishes Guidance on New Failure to Prevent Fraud Offense
• Other Recent PCAOB Regulatory and Enforcement Developments

Please let us know if there are topics that you would be interested in seeing covered in future editions of the Update.

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Warmest regards,

Jim Farrell
Monica Loseman
Michael Scanlon

Chairs, Accounting Firm Advisory and Defense Practice Group, Gibson, Dunn & Crutcher LLP

In addition to the practice group chairs, this update was prepared by David Ware, Timothy Zimmerman, Monica Limeng Woolley, Bryan Clegg, Douglas Colby, Hayden McGovern, John Harrison, Nicholas Whetstone, and Ty Shockley.

Accounting Firm Advisory and Defense Group Chairs:

Jim Farrell – Co-Chair, New York (+1 212-351-5326, jfarrell@gibsondunn.com)

Monica K. Loseman – Co-Chair, Denver (+1 303-298-5784, mloseman@gibsondunn.com)

Michael Scanlon – Co-Chair, Washington, D.C.(+1 202-887-3668, mscanlon@gibsondunn.com)

This guidebook offers an overview of the numerous decision points, procedures and vital considerations a company should contemplate before, during and after the IPO process.

Completing an Initial Public Offering (IPO) is a significant milestone for many business owners, executives, directors and stockholders. However, the journey towards going public can be fraught with complexities and unexpected challenges. For companies seeking to raise capital, whether through an IPO or other alternatives, it is critical to understand the road ahead.

The insights in this guidebook are derived from Gibson Dunn’s vast experience representing clients across various sectors in many IPOs over the years. We capitalize on our representation of large and seasoned public companies to implement leading-edge corporate governance and public reporting practices.

The involvement in the IPO process of our unmatched Securities Regulation and Corporate Governance team is core to the IPO process. This enables our IPO teams to anticipate potential problems in drafting the registration statement and to reach key decision-makers at the Securities and Exchange Commission on an expedited basis to seek tailored guidance, waivers, or resolution of challenging comments.

You can download a PDF of Gibson Dunn’s IPO Guidebook (2025 Edition) at the link below.

Read More

The following Gibson Dunn lawyers prepared this update: Andrew Fabens, Hillary Holmes, Stewart McDowell, Harrison Tucker, Peter Wardle, Marie Kwon, Bryan McCutcheon, and Justine Robinson.

Gibson Dunn’s lawyers are available to assist with any questions you may have regarding the guidebook or how we may assist in navigating your journey to going public. To learn more, please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm’s Capital Markets practice group, or the following practice leaders:

Andrew L. Fabens – New York (+1 212.351.4034, afabens@gibsondunn.com)
Hillary H. Holmes – Houston (+1 346.718.6602, hholmes@gibsondunn.com)
Stewart L. McDowell – San Francisco (+1 415.393.8322, smcdowell@gibsondunn.com)
Peter W. Wardle – Los Angeles (+1 213.229.7242, pwardle@gibsondunn.com)

© 2025 Gibson, Dunn & Crutcher LLP.  All rights reserved.  For contact and other information, please visit us at www.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.

Krystyna M. Blakeslee is a partner in the New York office of Gibson, Dunn & Crutcher and a member of the Real Estate Department where she focuses on commercial real estate finance and investment.

Krystyna has led some of the country’s largest and most high-profile commercial real estate transactions in recent years. She concentrates on the origination, acquisition and disposition (including securitization and syndication) of mortgage loans, mezzanine financings, preferred equity, bridge loans and corporate debt. In addition, Krystyna has extensive experience in restructures and workouts, as well as the exercise of remedies (including, in connection with acquiring assets in bankruptcy). She is also experienced in handling joint venture investments and acquisitions of real estate assets, including hotels, and advises funds in connection with their investment and financing activities in real estate.

Q1: What do you think the top lessons learned are from 2024, and as we start 2025, are you optimistic?

Blakeslee: One of the key lessons from 2024 involves the importance of honest property valuations. We’ve seen the market start to accept realistic valuations, which has been instrumental in unlocking more deal activity. I’m cautiously optimistic about 2025. A more favorable regulatory environment could encourage dealmaking, but we must remain vigilant about inflation. If inflation picks up again, it could pose a significant challenge.

Q2: What are your projections for this year? What is needed to increase deal volume?

Blakeslee: Multifamily and industrial sectors will remain the safest bets, but competition is intense and driving tighter pricing. The deals available at certain yields are not always of the best quality, which is something investors will need to navigate carefully. Rate stabilization will be key to increasing deal volume.

Additionally, creative financing solutions, such as seller financing and preferred equity, will continue to play a critical role, especially as traditional banks pull back and non-bank lenders and CMBS platforms step in to fill the gap.

Q3: How has the lending landscape shifted over the past year? What are the benefits of CMBS and other finance sources that have made gains coming out of 2024?

Blakeslee: The lending space has seen a significant influx of private market entrants. These lenders have been very innovative, offering flexibility in terms, structures, and asset classes. For example, we’re seeing innovation in mezzanine financing, preferred equity, and even loan purchases instead of originations. Private lenders’ sources of capital, such as insurance funds, allow them to structure deals in ways that traditional banks often cannot.

In the CMBS space, a notable trend from 2024 was the increased influence of B-piece buyers during the origination process. By addressing potential issues upfront, B-piece buyers can help improve pricing and reduce the likelihood of problems emerging later. This collaboration is a win-win for the market.

Q4: How can market participants better navigate today’s market and increasingly complex transactional environment?

Blakeslee: Navigating today’s market requires creativity, adaptability, and a willingness to engage in honest conversations about valuations. For example, structuring workouts in a way that reflects current valuations without punishing sponsors can accelerate resolutions. These structures can motivate sponsors to contribute additional capital by offering equity upside, which avoids the pain of taking REO or realizing a loss.

Refinancing risk is another critical area, particularly for office deals. With the shift to shorter fixed-rate loans in recent years, investors now need to consider rollover risks over the next decade. This challenge is compounded by tenant preferences for newer office products and the rising costs of tenant improvements and leasing commissions.

Maintaining liquidity and the ability to pivot quickly are also essential. Creative financing solutions, flexibility in deal structures, and strong sponsorship will continue to be key drivers for success in this increasingly complex environment.

Q5: Are there any additional factors that could influence the market in 2025?

Blakeslee: Insurance will be an important factor, especially in markets vulnerable to natural disasters. Interest rates are another when looking at refinancing risks, so increased deal volume will likely be contingent on rate stabilization.

We’ve also seen that sponsorship remains critical. Workouts from 2024 have shown us who will stand by their properties and who will not. Even strong sponsors may decide to walk away from troubled deals after making good faith efforts to save them. These decisions will impact how deals are structured and resolved this year.

Overall, 2025 will require dynamism, resilience, and a clear-eyed approach to the challenges and opportunities ahead.

Originally Published January 28, 2025 on CommercialObserver.com

Our update provides key takeaways from President Trump’s Executive Order and its potential impact on various energy initiatives as well as the M&A and capital markets outlook for energy companies.  

On January 20, 2025, President Donald Trump signed executive order “Unleashing American Energy“ (the Executive Order). This update discusses key takeaways from the Executive Order and the potential impact of the Executive Order on various energy initiatives as well as the M&A and capital markets outlook for energy companies. For a broader discussion of the twenty-six executive orders President Trump signed on January 20, 2025 and the major regulatory and policy issues energy industry experts will be monitoring in the coming days, please refer to Trump 2.0 on Energy: Ten Items to Watch.

1. Overview of the Executive Order

The Executive Order is intended to reverse years of what the new administration characterizes as “burdensome and ideologically motivated regulations” which have impeded the development of America’s abundant energy and natural resources. By implementing new policies and revoking several executive orders from prior administrations, the Executive Order seeks to promote and encourage energy exploration and development by revising the permitting process, revoking or revising regulations, and promoting domestic mining, amongst other changes.

2. Impact on Oil & Gas Leasing and Permitting

The Executive Order lays out policies of the United States which include (a) encouraging energy exploration and production of Federal lands and waters, including on the Outer Continental Shelf, in order to meet the needs of US citizens and solidify the United States as a global energy leader and (b) establishing the United States’ position as the leading producer and processor of non-fuel minerals, thus creating jobs and prosperity at home.

The heads of all federal agencies are ordered to review, revise, or rescind all existing regulations, orders, guidance documents, policies, or other agency actions, that impose an undue burden on the identification, development or use of domestic energy resources, particularly “oil, natural gas, coal, hydropower, biofuels, critical mineral, and nuclear energy resources.” Agency heads are instructed to develop and begin implementing action plans to suspend, revise or rescind any such unduly burdensome agency actions within 30 days of the Executive Order (Feb. 19, 2025).

The chair of the Council of Environmental Quality (CEQ) is ordered to provide guidance on implementing the National Environmental Policy Act (NEPA) and propose rescinding burdensome NEPA regulations in order to expedite and simplify permitting. Further, the Executive Order directs various federal agencies to eliminate delays within their permitting process. In doing so, the Executive Order intends to streamline the NEPA judicial review process and promote the permitting and construction of critical infrastructure whilst providing greater certainty in the Federal permitting process.

These changes are expected to streamline and promote domestic exploration and production on both onshore and offshore federal oil and gas leases. While challenges from environmental groups are likely, we expect significantly more federal lease sales to be conducted, including in federal lands that had never previously been considered for sale. Environmental review of well and pipeline permit applications will still occur, but the process will likely be overhauled and permit approvals will likely be granted significantly faster in an effort to promote resource development.

3. Pause on Inflation Reduction Act Funding on Various Energy Projects

Pursuant to the Executive Order, all agencies are to immediately pause the disbursement of funds appropriated through the Inflation Reduction Act (Public Law 117-169, IRA) or the Infrastructure Investment and Jobs Act (Public Law 117-58, IIJA). On January 21, 2025, the acting director of the Office of Management and Budget (OMB) issued guidance clarifying that the pause only applies to funds supporting programs, projects or activities that contravene the policies of the Executive Order and that agency heads may disburse funds as they deem necessary after consulting with OMB. Given that the Executive Order indicates a lack of support for solar and wind, while remaining silent on geothermal or carbon capture, utilization, and storage (CCUS), IRA and IIJA funding for geothermal and CCUS projects may not be suspended for long, if at all. However the future of federal funding for solar and wind-related projects is more uncertain.

It is important to note that a pause on federal funding under the IRA is not tantamount to a revocation of tax credits under the IRA. For further discussion on the impact to IRA Tax Credits, please refer to Trump 2.0 on Energy: Ten Items to Watch.

4. Changes to Environmental Analyses and Carbon Monitoring

The Executive Order aims to streamline the permitting process, reduce regulatory burdens, and shift the focus away from certain climate-related metrics. As touched on in Section 2 above, it does so in part by revoking prior Executive Orders related to Environmental regulations under NEPA and directing agencies to make changes related to consideration and calculation of greenhouse gas emissions.

• Revocation of Executive Order 11991: Revokes Executive Order 11991 (Carter, May 24, 1977), which amended Executive Order 11514 (Nixon, March 5, 1970).  Executive Order 11991 tasked CEQ with issuing regulations to federal agencies for implementing the procedural provisions of NEPA, and directed that federal agencies comply with those regulations unless such compliance would be inconsistent with statutory requirements.
• NEPA Implementation: Tasks the Chairman of CEQ with providing guidance to expedite and simplify the permitting process under the NEPA. Agencies are required to prioritize efficiency and certainty in the permitting process, minimizing delays and ambiguity.
• Adherence to Legislated Requirements: Agencies must adhere strictly to legislated requirements for environmental considerations, using robust methodologies and avoiding arbitrary or ideologically motivated methods.
• Disbanding the Interagency Working Group on the Social Cost of Greenhouse Gases (IWG): The IWG is disbanded, and all its guidance, instructions, and documents are withdrawn. This includes the withdrawal of the Technical Support Document on the social cost of carbon, methane, and nitrous oxide.
• Elimination of the Social Cost of Carbon Calculation: The calculation of the social cost of carbon is deemed arbitrary and potentially harmful to the U.S. economy.  The EPA Administrator is directed to issue guidance to address these issues, including the potential elimination of the social cost of carbon calculation from federal permitting or regulatory decisions.
• Review of EPA’s Endangerment Findings: The EPA Administrator, in collaboration with other agencies, is to review the legality and applicability of the EPA’s findings on greenhouse gases under the Clean Air Act.
• Review of Agency Actions:  Agency heads must review existing regulations and actions to identify those that burden domestic energy development, and create and implement plans to suspend, revise, or rescind identified burdensome actions, in collaboration with OMB and the National Economic Council (NEC).
• Revocation of Executive Orders: Revokes a dozen of President Biden’s Executive Orders related to environmental justice, climate change, and the environment.

There are various agency deadlines related to the above NEPA and carbon monitoring changes which will need to be achieved as part of the Executive Order.

• Within 30 days:
  • Agency heads must develop and begin implementing action plans to suspend, revise, or rescind burdensome actions.
  • The Chairman of CEQ must provide guidance on implementing NEPA.
  • Agencies must submit reports identifying instances where enforcement discretion can advance policy goals.
• Within 60 days:
  • The EPA Administrator must issue guidance addressing the inadequacies of the social cost of carbon calculation.

The Executive Order mandates a review and revision of regulations that are seen to burden domestic energy development, which could lead to faster permitting processes and reduced compliance costs for energy companies. CEQ is expected to be stripped of its power to issue binding NEPA regulations for federal agencies. Because most agencies have their own regulations to implement NEPA, this change will not eliminate NEPA reviews. The elimination of the social cost of carbon calculations is intended to lessen the importance of climate change analysis in permitting decisions. Industry should prepare for streamlined regulatory requirements and potential shifts in the rigor required to prepare environmental analyses and environmental impact statements, with agencies tasked with focusing on efficiency and adherence to strict legislative text and these new guidelines. We expect NEPA litigation to increase as environmental groups challenge these executive orders. Energy sector companies should stay informed about changes to ensure compliance and leverage opportunities for expedited project approvals over the coming months as these agencies undergo a potentially major overhaul of NEPA and carbon reporting.

5. Impact on LNG Export Projects

The Executive Order directs the Secretary of Energy to “restart reviews of applications for approvals of liquified natural gas (LNG) export projects,” which, coupled with President Trump reversing the Biden administration’s pause on LNG permits on day one of his second term by rolling back President Biden’s executive order that paused granting LNG export authorizations, suggests an emphasis on increasing LNG exports by the current administration. LNG exports are a key driver for investment in natural gas assets, midstream projects, and CCUS, thus such a change should be positive for investment and dealmaking in these areas. 

For further discussion on the future of LNG under the Trump administration, please refer to Trump 2.0 on Energy: Ten Items to Watch.

6. Impact on Mergers & Acquisitions and Antitrust in the Energy Industry

While the Executive Order promises to reduce administrative hurdles to traditional energy projects, we expect oil and gas companies to operate largely consistently with the approach they have taken in the post-pandemic era, with an emphasis on capital discipline, efficient returns, and consolidation. The Executive Order will likely enhance the value of companies with asset bases that include large portfolios of leases on federal lands or in the Outer Continental Shelf, but from a dealmaking perspective, the administration’s attitude shift toward traditional energy is likely to also be seen in the antitrust review process. With the change in political leadership and an emphasis on encouraging investment in natural resources in the name of energy security, the Federal Trade Commission (FTC) is unlikely to be as hostile to mergers and acquisitions in the energy industry as the previous administration. For example, the FTC conducted large-scale Second Request investigations into a range of industry transactions as part of its antitrust reviews under the Hart-Scott-Rodino (HSR) Act, following requests from Democratic leadership in the Senate for thorough investigations of industry transactions. With that said, the FTC cleared most industry transactions without challenge, despite the costs imposed through extensive investigations. Furthermore, the career FTC staff that has reviewed transactions in the industry for a number of years will likely remain in place, suggesting that changes in the substantive review of industry transactions are likely to be modest. Nonetheless, the potential for fewer Second Requests and quicker HSR approvals would be beneficial to an energy consolidation wave that industry experts suggest has not yet crested.

7. Impact on Energy Industry Capital Raising and Public Company Regulation

The reduction in environmental reporting and carbon monitoring under the Executive Order, in combination with the policy objectives stated in the Executive Order and other directives from the Trump administration, indicate that the outlook for energy capital markets and public company regulation under the second Trump administration is positive. Both going public and operating as a public company should be less time-consuming and costly than it was under the Biden administration. A majority of the U.S. Securities and Exchange Commission (SEC) commissioners (including the nominated chair, former Commissioner Atkins) will be appointed by President Trump and, judging from the first Trump administration, will set an agenda that is supportive of capital raising and focused on reducing the burden of being publicly traded. For example, the climate disclosure rules adopted by the Biden administration’s divided SEC (and stayed pending challenge in federal court) are likely to be repealed, saving energy companies a significant amount of G&A expense and reducing the risk of litigation. As another example, based on experience with the SEC review process under the first Trump administration, we expect the process and waiver requests to be faster and more commercial, further facilitating capital markets transactions. We also can expect rule proposals that are focused on making it easier for private companies to raise capital from a broader investor base. For capital intensive businesses in the energy industry, a relatively fast, predictable process with as little unnecessary expense as possible, is important. As such, we expect the backlog of private energy companies who have been waiting to IPO to seize the opportunity to access the capital markets while the process is easier, being a public company is less costly, and the broader business climate for the industry is supportive. In addition, we expect public energy companies to take advantage of this improved regulatory climate to access the capital markets more often than in recent years. Regardless, investor pressures to live within free cash flow, maintain low leverage and pay dividends to shareholders will continue to impact decision making with respect to equity and debt capital markets transactions.

Despite all this optimism, it remains true that capital markets for the energy industry are only as strong as the capital markets themselves. Other significant events, such as war, pandemic, inflation, labor shortages, or supply cost increases from tariffs, could have an adverse impact on the equity markets or the  energy industry generally.  Similarly, any increases in the deficit and inflation could cause interest rates to rise again, increasing the cost of accessing the debt capital markets. Even so, energy capital markets generally thrive on stability and low volatility and the regulatory environment under the second Trump administration appears to be conducive to this.

The following Gibson Dunn lawyers prepared this update: Rahul Vashi, Hillary Holmes, Harrison Tucker, Adam Whitehouse, and Zain Hassan.

Gibson, Dunn & Crutcher’s lawyers are available to assist in addressing any questions you may have about these developments. To learn more, please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any leader or member of the firm’s Oil & Gas, Energy Regulation & Litigation, Environmental Litigation & Mass Tort, Power & Renewables, Cleantech, Antitrust & Competition, Capital Markets, or Mergers & Acquisitions practice groups:

Oil and Gas:
Michael P. Darden – Houston (+1 346.718.6789, mpdarden@gibsondunn.com)
Rahul D. Vashi – Houston (+1 346.718.6659, rvashi@gibsondunn.com)
Graham Valenta – Houston (+1 346.718.6646, gvalenta@gibsondunn.com)

Energy Regulation and Litigation:
William R. Hollaway – Washington, D.C. (+1 202.955.8592, whollaway@gibsondunn.com)
Tory Lauterbach – Washington, D.C. (+1 202.955.8519, tlauterbach@gibsondunn.com)

Environmental Litigation and Mass Tort:
Stacie B. Fletcher – Washington, D.C. (+1 202.887.3627, sfletcher@gibsondunn.com)
David Fotouhi – Washington, D.C. (+1 202.955.8502, dfotouhi@gibsondunn.com)
Rachel Levick – Washington, D.C. (+1 202.887.3574, rlevick@gibsondunn.com)

Power and Renewables:
Peter J. Hanlon – New York (+1 212.351.2425, phanlon@gibsondunn.com)
Nicholas H. Politan, Jr. – New York (+1 212.351.2616, npolitan@gibsondunn.com)

Cleantech:
John T. Gaffney – New York (+1 212.351.2626, jgaffney@gibsondunn.com)
Daniel S. Alterbaum – New York (+1 212.351.4084, dalterbaum@gibsondunn.com)
Adam Whitehouse – Houston (+1 346.718.6696, awhitehouse@gibsondunn.com)

Antitrust and Competition:
Rachel S. Brass – San Francisco (+1 415.393.8293, rbrass@gibsondunn.com)
Kristen C. Limarzi – Washington, D.C. (+1 202.887.3518, klimarzi@gibsondunn.com)
Cynthia Richman – Washington, D.C. (+1 202.955.8234, crichman@gibsondunn.com)

Capital Markets:
Andrew L. Fabens – New York (+1 212.351.4034, afabens@gibsondunn.com)
Hillary H. Holmes – Houston (+1 346.718.6602, hholmes@gibsondunn.com)
Stewart L. McDowell – San Francisco (+1 415.393.8322, smcdowell@gibsondunn.com)
Peter W. Wardle – Los Angeles (+1 213.229.7242, pwardle@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)

© 2025 Gibson, Dunn & Crutcher LLP.  All rights reserved.  For contact and other information, please visit us at www.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.

This update summarizes key amendments to the COPPA Rule and related FTC Commissioner statements, as well as key proposals that the FTC declined to adopt, and it positions these developments in the broader legal landscape related to children’s privacy and safety online.

On January 16, 2025, the Federal Trade Commission (FTC or Commission) voted 5-0 to approve long-awaited updates to the Children’s Online Privacy Protection Rule (COPPA Rule or Rule),[1] which was last updated over a decade ago, in 2013. The FTC had proposed amendments to the COPPA Rule in a Notice of Proposed Rulemaking (NPRM) in January 2024,[2] following a 2019 request for comment[3] on the effectiveness of the 2013 amendments. While the updated COPPA Rule does not include some of the more sweeping amendments proposed, it imposes significant new obligations regarding the collection, use, and disclosure of personal information from children under 13. Many of these updates effectively codify positions that the Commission has taken in COPPA enforcement actions under the prior COPPA Rule.

As described in detail below, key updates to the COPPA Rule include:

• Requiring separate parental consent for data sharing with third parties for targeted ads and other non-integral purposes. Requiring covered operators to obtain separate verifiable parental consent to disclose children’s personal information to third-party companies for targeted advertising or other purposes that are not “integral” to the operator’s websites or online services;
• Requiring data minimization and a data retention policy. Limiting the retention of children’s personal information to only the time reasonably necessary to fulfill the specific purpose for which it was collected, prohibiting the retention of children’s personal information indefinitely, and requiring adoption of a written data retention policy;
• Clarifying definitions of child-directed and mixed audience services. Clarifying which online services may be covered by the Rule by amending the definition of “website or online service directed to children” to include a non-exhaustive exemplary list of evidence the FTC may consider in analyzing audience composition and intended audience, and adding a new, standalone definition of “mixed audience website or online service”;
• Expanding the definition of covered information. Expanding the definition of “personal information” to include biometric identifiers and government-issued identifiers beyond Social Security numbers;
• Expanding parental notice requirements. Clarifying and expanding the scope of disclosures required in direct notices and online privacy notices, including: the identities and categories of any third parties with which the operator shares children’s personal information; how specifically the operator uses persistent identifiers to support its internal operations and what measures are in place to avoid using persistent identifiers for unauthorized purposes; and when an operator collects an audio file of a child’s voice pursuant to the audio file exception, a description of how the operator uses audio files and a disclosure that such files are deleted immediately after responding to the request for which they were collected;
• Enumerating additional methods to obtain verifiable parental consent. Enumerating additional methods that satisfy the requirement to obtain verifiable parental consent before collecting personal information from children or using or disclosing such information, including using a text message coupled with an additional step, such as a confirmatory text message following receipt of consent (the “text plus” method);
• Enhancing data security requirements. Clarifying the reasonable security measures required to protect personal information from children, which include, at a minimum, establishing a written data security program; and
• Increasing oversight and transparency of Safe Harbor programs. Enhancing oversight of, and transparency regarding, Safe Harbor programs, including by requiring that such programs disclose their membership lists and report additional information to the FTC.

Significant proposals the FTC dropped include changes that would have codified requirements for educational technology companies operating in a school environment, and those that would have prohibited the use of push notifications and similar engagement techniques without separate parental consent.

The amended COPPA Rule will become effective 60 days after its publication in the federal register, and covered operators will have until one year after the publication date to comply, except with respect to certain provisions regarding Safe Harbor programs.[4] We note, however, that businesses should continue to monitor updates regarding the publication of the updated Rule, given the possibility for delay or withdrawal under the Trump administration or the new FTC leadership.[5] Although the FTC’s vote approving the final Rule was unanimous, then-incoming Chair Andrew Ferguson issued a strongly worded concurring statement identifying three “serious problems” with the amendments that he ascribed to “the outgoing administration’s irresponsible rush to issue last-minute rules two months after the American people voted to evict them from office,” and calling for “[t]he Commission under President Trump [to] address these issues and fix the mess that the outgoing majority leaves in its wake.”[6]

Despite some uncertainties, companies that knowingly provide services to children under 13 or that have offerings that could be considered attractive to children should revisit their existing compliance strategies to mitigate the substantial risk of liability for non-compliance with the updated COPPA Rule, which include civil penalties up to $53,088 per violation for 2025.[7] Given historical and continued bipartisan consensus that the privacy and safety of children online is a priority in light of developing technologies,[8] we expect rigorous oversight and enforcement by the FTC, including under the new administration.

Gibson Dunn has extensive experience advising and defending multinational companies on COPPA and youth-related strategies, including regulatory investigations and engagement strategies, product counseling, and litigation matters. We stand ready to advise companies on compliance with the updated COPPA Rule, and on federal, state, and international youth privacy and safety laws more broadly.

A. COPPA Background

Congress enacted COPPA in 1998, and the FTC’s COPPA Rule implementing COPPA first went into effect in 2000 and was last amended in 2013.

Importantly, COPPA applies only to online services that are directed to children under 13 or that are collecting, using, or sharing personal information of a user with actual knowledge that a particular user is under 13. More specifically, COPPA applies to (1) “operators of commercial websites and online services” that are “directed to children under 13 that collect, use, or disclose personal information from children”; (2) “operators of general audience websites or online services with actual knowledge that they are collecting, using, or disclosing personal information from children under 13”; and (3) to websites or online services that have actual knowledge that they are collecting personal information directly from users of another website or online service directed to children.”[9] COPPA’s primary goal is to give parents control over their children’s personal information and how that information is collected and processed.[10]

The COPPA Rule imposes several requirements on covered operators of websites and online services, including requirements to provide clear direct notice to parents and to obtain verifiable parental consent before collecting personal information from children or using or disclosing such information.[11] The Rule also confers other rights on parents, including the right to request that covered operators delete their children’s personal information,[12] and it imposes several additional obligations on covered operators, including for example with respect to security measures[13] and data retention.[14]

B. Key Amendments to the COPPA Rule

The following sections detail key amendments to the COPPA Rule.

a. Companies Covered By the COPPA Rule

The amended COPPA Rule “clarifies” the definition of “website or online service directed to children” by adding to the non-exhaustive exemplary list of evidence the FTC may consider in analyzing audience composition and intended audience “consideration of marketing or promotional materials or plans, representations to consumers or to third parties, reviews by users or third parties, and the age of users on similar websites or services.”[15] The latter example may be particularly challenging for companies to address since it relies on extraneous information outside a service’s control (and for the same reason, would not appear to be probative of a company’s intent to direct its service to children).

The amended Rule also includes a new, standalone definition of “mixed audience website or online service,” which the FTC confirmed is not intended to expand the scope of child-directed websites and online services, and does not change which websites or online services are directed to children.[16] The 2013 COPPA amendments and the FTC’s subsequent COPPA FAQ guidance introduced the concept of “mixed audience” websites and online services as a subcategory within the definition of “website or online service directed to children,” but did not define this term.[17] Under the updated Rule, “mixed audience” websites and online services are defined as those directed to children but that do not target children as their primary audience, and that do not collect personal information from any visitor other than to assess whether a visitor is a child.[18] Unlike other child-directed websites and online services, mixed audience websites and online services are permitted to collect information from visitors in a neutral manner in order to determine whether a visitor is a child.[19] Once a mixed audience website or online service determines that a visitor is 13 or over, it may collect personal information from the visitor without obtaining verifiable parental consent. The mixed audience website or online service may not deny access to visitors who are under 13, but may require verifiable parental consent or offer an experience that does not collect their personal information.

b. Expanded Definition of “Personal Information”

As amended, “personal information” under COPPA now explicitly includes (1) biometric identifiers, defined as an “identifier that can be used for the automated or semi-automated recognition of an individual, such as fingerprints; handprints; retina patterns; iris patterns; genetic data, including a DNA sequence; voiceprints; gait patterns; facial templates; or faceprints”; and (2) government-issued identifiers beyond Social Security numbers, including state ID cards, birth certificates, and passport numbers.[20]

c. Direct Notice & Verifiable Parental Consent

Direct Notice. The amended COPPA Rule clarifies and expands what companies must include in their direct notice disclosures to parents prior to collecting from and using their children’s personal information. Specifically, companies should ensure their direct notice disclosures:

• Include information on “how the operator intends to use [a child’s personal] information;”[21]
• Disclose the identity or categories of third parties the company shares personal information with, the purposes for sharing with those third parties, and that a parent can consent to the collection of and use of the child’s information, without consenting to its disclosure;[22] and
• Are provided in every instance in which a company seeks parental consent.[23]

Online Privacy Notice. Companies must also post clear, prominent links to online notices of their information practices regarding children.[24] As with the direct notices, the COPPA Rule amendments expand what must be included in the online notices to include:

• The identities and categories of any third parties to which the operator discloses personal information and the purpose for such disclosure;[25]
• The specific internal operations for which the operator uses persistent identifiers, and the policies or practices the operator has in place to avoid using persistent identifiers for unauthorized purposes;[26]
• When an operator collects an audio file of a child’s voice pursuant to the audio file exception (discussed below), a description of how the operator uses the audio files, and that such files are deleted immediately after responding to the request for which they were collected;[27] and
• The operator’s data retention policies for personal information collected from children.[28]

Verifiable Parental Consent. The amendments enumerate additional methods that satisfy the requirement to obtain verifiable parental consent before collecting personal information from children or using or disclosing a child’s personal information,[29] including:

• Processing any transaction requiring a parent to use a credit card, debit card, or other online payment system, provided that the transaction “provides notification of each discrete transaction to the primary account holder”–not just those transactions which include a monetary fee, as previously required;[30]
• Using a knowledge-based authentication process (i.e., questions of sufficient number and difficulty that a child could not reasonably ascertain the answers);[31]
• Matching an image of a face to a verified photo identification, such as a driver’s license (with the image and photo ID being promptly deleted thereafter);[32] and
• Using a “text plus” method that may be used when an operator does not disclose personal information from children to a third party, where (similar to the “email plus” method already available) subject to certain disclosure and confirmation requirements, a company uses a text message to obtain consent.[33]

The amendments also modify and expand exceptions to the COPPA Rule’s verifiable parental consent requirement. Of particular note is an exception for when a company collects an audio file containing a child’s voice as a replacement for written words, and no other personal information, and uses the audio file only to respond to a child’s specific request such as to execute a search or implement a verbal instruction, and the file is deleted immediately thereafter.[34] This exception is meant to provide flexibility for companies who rely on voice-assist technology.[35] Such a practice must be disclosed in an online notice.[36]

d. Separate Consent for Information Disclosures to Third Parties for Targeted Advertising and Other Non-Integral Purposes

The amended COPPA Rule requires separate parental consent for the disclosure of a child’s personal information to a third party for targeted advertising or other uses, “unless such disclosure is integral to the website or online service” such as disclosures necessary to provide the product or service.[37] Covered operators also cannot condition access to their website or service on obtaining such consent.[38] This amendment, in particular, will have significant implications for online services that may be perceived to be attractive to children that leverage third-party advertising technologies in their services.

e. Data Retention and Deletion

The COPPA Rule includes directives regarding the retention and deletion of personal information from children, including that a covered operator may retain such information “for only as long as is reasonably necessary to fulfill the purpose(s) for which the information was collected.”[39] Notably, the amendments prohibit companies from retaining children’s personal information indefinitely.[40] As discussed below, there is disagreement within the Commission surrounding this requirement, including as to what “indefinitely” means in this context.

The amendments further instruct that companies must establish a written data retention policy that specifies the purposes for which a child’s information is collected, the business need for retaining the information, and the timeframe for deleting it.[41] These policies must now be provided in online notices, as described above.[42]

f. Confidentiality, Security, and Integrity of Personal Information

COPPA requires covered operators to “establish and maintain reasonable procedures to protect the confidentiality, security, and integrity of personal information collected from children,”[43] and the amendments clarify the steps covered operators can take to comply with this “reasonable procedures” standard.

At a minimum, a covered operator’s safeguards must be “appropriate to the sensitivity of the personal information collected from children and the operator’s size, complexity, and nature and scope of activities.”[44] To comply, an operator must, among other requirements, designate employees to manage the program, assess the program at least annually, and implement necessary safeguards based on those assessments.[45] Notably, these requirements generally mirror the requirements contained in Commission orders requiring the implementation of a comprehensive information security program.

Additionally, covered operators that disclose children’s personal information to third parties must “take reasonable steps to determine that such entities are capable of maintaining the confidentiality, security, and integrity of the information” and obtain written assurances from the third parties that they will do so.[46]

g. Safe Harbor Programs

Under the COPPA Rule, the Commission may approve Safe Harbor programs–i.e., self-regulatory guidelines submitted by industry groups which implement the same or greater protections for children as in COPPA. The FTC amended the COPPA Rule to “enhance oversight of, and transparency regarding” these Safe Harbor programs by requiring they conduct annual independent assessments of their members’ compliance, including the members’ data privacy and security practices, disclose their membership lists, and maintain and submit to the FTC records of complaints about, and disciplinary actions against, the program’s members.[47] Existing COPPA Safe Harbor programs must submit proposed modifications within 6 months of the publication of the amended COPPA Rule in the federal register.[48]

C. Key Proposed Changes Not Adopted in Amended COPPA Rule

The amended COPPA Rule does not include certain amendments that the FTC proposed in its January 2024 NPRM, which were the subject of nearly 300 public comments, and which would have imposed significant compliance obligations relating to push notifications or engagement techniques and on educational technology companies.

a. Push Notifications/Engagement Techniques

The COPPA Rule includes an exception to obtaining verifiable parental consent “[w]here the purpose of collecting a child’s and a parent’s online contact information is to respond directly more than once to the child’s specific request, and where such information is not used for any other purpose, disclosed, or combined with any other information collected from the child.”[49] The NPRM’s proposal sought to prohibit companies from using this exception to “encourage or prompt use of a website or online service,” in order to address children’s overuse of online services due to engagement-enhancing techniques such as push notifications, in-game notices, or website pop-ups.[50]

Though the FTC stated it remains “deeply concerned” about push notifications and other techniques designed to prolong a child’s time spent online, the Commission was persuaded by concerns regarding the inconsistency between the proposed language and the COPPA statute, as well as First Amendment concerns regarding the breadth of the restriction, and thus did not amend COPPA to include this proposal.[51]

b. Educational Technology Requirements

The FTC also excluded several requirements proposed in the NPRM that would have been applicable to educational technology (ed tech) companies. The NPRM proposed including new definitions of “school” and “school-authorized education purpose,” as well as new provisions governing the collection of information from children in schools, and codifying the FTC’s existing guidance that allows ed tech companies to obtain consent from schools, rather than parents, to collect personal information from students for educational purposes.[52] The FTC chose not to adopt these proposed amendments “[t]o avoid making amendments to the COPPA Rule that may conflict with potential amendments to [the Department of Education’s Family Education Rights and Privacy Act] regulations.”[53] However, the Commission specifically noted that they “will continue to enforce COPPA in the ed tech context consistent with its existing guidance.”[54]

c. Other Exclusions

The final COPPA Rule also excluded other proposed amendments, including one that would have modified the exception to the parental consent requirement when companies collect persistent identifiers (and no other personal information) to provide support for the internal operations of the website or online service, such as for contextual advertising or personalization.[55] The FTC also declined to expand the definition of personal information to include avatars generated from a child’s image. And the FTC declined to amend the Rule to require companies disclose specifically the types of personal information collected, as well as details on how that personal information in particular is used, agreeing with commenters that “that level of detail could be superfluous.”[56]

D. An Uncertain Future

While the Commission vote approving the final COPPA Rule was unanimous, the future of the Rule remains uncertain. Former-Chair Lina Khan and then-incoming Chair Andrew Ferguson issued separate concurring statements about the Rule, and Commissioners Alvaro Bedoya and Rebecca Slaughter issued a joint concurring statement.

Former-Chair Khan’s concurring statement emphasized that these updates were long-awaited, especially given the dramatic rise in children’s smartphone and social media use since the Rule was last amended.[57] She characterized the updates as “complementing” the FTC’s enforcement efforts, potentially “boost[ing]” enforcement efforts by state attorneys general,[58] and welcoming Congress’ efforts to legislate in this area.[59]

In his concurring statement, Commissioner Ferguson characterized the amendments as “the culmination of a bipartisan effort initiated when President Trump was last in office” and voted to issue the final Rule because the amendments “contain several measures improving data privacy and security protections for children”–but he identified “three major problems” with the amendments.[60] He argued against the requirement that all new third-party data sharing should require a separate consent from parents, and against the prohibition on indefinite retention of data.[61] He also advocated for an exception for collecting children’s information for the limited purpose of age verification.[62] He was blunt in his critique that “these issues are the result of the Biden-Harris FTC’s frantic rush to finalize rules on their way out the door” and foreshadowed an intent to revisit the amendments in stating that “[t]he Commission under President Trump should address these issues and fix the mess that the outgoing majority leaves in its wake.”[63]

In their joint concurring statement, Commissioners Bedoya and Slaughter disagreed with Commissioner Ferguson regarding the prohibition against indefinite data retention, arguing such a requirement is necessary for companies that take the position that it is “reasonably necessary” to keep personal information indefinitely.[64]

E. FTC Enforcement Risks

Notwithstanding disagreement among Commissioners on certain details of the COPPA Rule amendments, companies can expect the FTC to continue to vigorously scrutinize data practices involving children. The FTC historically has focused its enforcement efforts on potential harms to children online, even where business practices are not subject to COPPA, under Section 5 of the FTC Act (Section 5). The FTC has also enforced against companies for violations of both COPPA and Section 5, often resulting in steep monetary penalties.

For example, in 2022, the FTC secured an agreement with Epic Games, Inc. (the creator of the video game Fortnite) to pay a record-breaking $520 million to settle allegations that Epic violated both COPPA and Section 5.[65] More recently, on January 17, 2025, another video game developer agreed to pay $20 million and make various product and other changes to settle FTC allegations that its practices related to loot boxes violated COPPA and Section 5[66]–although notably, Commissioners Ferguson and Holyoak dissented on three of four counts brought under Section 5.[67]

Further, some in Congress continue to push for federal legislation, including the Children and Teens’ Online Privacy Protection Act (COPPA 2.0),[68] which would extend the application of COPPA to youth under 16, ban targeted advertising to minors, and place more responsibility on companies to ensure children’s online safety. Senator Markey, the author of the bill and an author of COPPA, noted in a statement applauding the updated COPPA Rule that “Congress must still pass [COPPA 2.0] to extend these protections to teenagers, block targeted advertising to kids and teens, and give young people an eraser button to delete their personal information.”[69]

F. Additional Youth Privacy and Safety Developments and Enforcement Risks

These federal changes reflect a broader trend toward enhancing privacy and safety protections for children. Various U.S. states and jurisdictions worldwide are also increasingly focused on children and youth, implementing laws and taking actions under existing laws against companies with a substantial youth user base.

a. State Youth Laws and Enforcement

State lawmakers have made clear that protecting children’s online privacy and safety is a top priority, including by amending omnibus state privacy laws to include youth-specific provisions, enacting broader “age-appropriate design” laws applicable to any online service “reasonably likely to be accessed by children,” and enacting social media-specific laws requiring enhanced protections and often parental consent to children under 18 who use social media services. Many of these laws have been challenged successfully on First Amendment and other grounds, but other laws are spawning aggressive enforcement.

Among these state laws are Texas’ Securing Children Online Through Parental Empowerment Act (SCOPE Act), the majority of which came into effect on September 1, 2024,[70] and the California Protecting Our Kids from Social Media Addiction Act, only parts of which are currently set to take effect on March 6, 2025.[71] The Texas SCOPE Act takes a restrictive approach to collection and use of children’s data, while the California law is the first aiming to protect children from social media “addiction.” Both laws are shaping the youth legal landscape, setting templates for other states to follow, but the California law is currently being challenged, and we anticipate continued constitutional challenges asserting that other such laws restrict expressive speech. Even so, regulators are not slowing down their efforts pending these challenges.

For example, in October 2024–just one month after the Texas SCOPE Act came into effect–the Texas Attorney General’s Office announced its first action under the law seeking up to $10,000 per violation.[72] The Texas Attorney General’s Office also recently announced the launch of investigations into over a dozen companies in connection with the SCOPE Act and Texas’ omnibus privacy law that includes youth-specific provisions.[73]

Enforcement authorities also have sought to hold companies liable for alleged online harms to children under general state consumer protection laws prohibiting unfair and deceptive practices, which are not subject to the same constitutional concerns. Additionally, parents and families of children, as well as school districts, have similarly leveraged general consumer protection and other laws to pursue claims against online companies relating to purported youth harms, resulting in extensive multidistrict and class action litigation in this area.

b. Global Focus on Youth Privacy and Safety

Global lawmakers and regulators are also focused on youth privacy and safety online. Omnibus privacy laws outside the U.S. do not accord special treatment to children’s data, but some contain some similar restrictions to COPPA, such as requiring parental consent to process children’s data (e.g., the European Union (EU)’s General Data Protection Regulation) or prohibiting online platforms from targeting ads to children under 18 (e.g., the EU’s Digital Services Act (DSA), a sweeping EU regulation). As in the U.S., there is a similar global trend towards more prescriptive and aggressive laws concerning youth online activity.

For example, under the DSA, in-scope platforms can be fined up to 6% of global annual turnover by the European Commission (EC), which is the primary enforcing authority, for failing to conduct required risk assessments considering the impact of new features and service on harm to minors, among other concerns. The EC has already requested information from, and in some instances launched investigations into several companies in connection with, the collection and use of minors’ data under the DSA.[74] Similarly in the UK, Ofcom has been appointed to enforce the UK Online Safety Act (OSA) and has published drafts for consultation and finalized versions of its mandatory Codes of Practice. In addition, in recent years, many EU privacy regulators have been focused on enforcing against companies whose services can be accessed by children, and the UK Information Commissioner’s Office steadily continues to enforce its Children Code, also known as its Age Appropriate Design Code, which it published in 2020. And in APAC, Australia recently took steps to ban youth under the age of 16 from creating social media accounts–although implementing regulations have yet to be published.[75]

These laws underscore the challenges global companies will face in restructuring their compliance plans within tight timeframes.

The privacy and safety of children online are top concerns for the FTC, other enforcement authorities, lawmakers, and families worldwide. To that end, companies that conduct business online should take care to assess their legal obligations and practical risks under the amended COPPA Rule, as well as under youth-related laws across jurisdictions, given increased regulatory attention to child-directed services and features under an expanding landscape of child-focused regulation.

Again, Gibson Dunn has extensive experience advising multinational companies operating online services on a wide variety of regulatory and law enforcement investigation, enforcement, strategic counseling, litigation, and appellate matters relating to child and teen privacy and safety. We are closely monitoring developments within the youth legal landscape, and we are available to discuss these issues as applied to your particular situation.

[1] Press Release, Fed. Trade Comm’n, FTC Finalizes Changes to Children’s Privacy Rule Limiting Companies’ Ability to Monetize Kids’ Data (Jan. 16, 2025), https://www.ftc.gov/news-events/news/press-releases/2025/01/ftc-finalizes-changes-childrens-privacy-rule-limiting-companies-ability-monetize-kids-data; see also Fed. Trade Comm’n, Children’s Online Privacy Protection Rule, Final Rule Amendments (Jan. 16, 2025), https://www.ftc.gov/system/files/ftc_gov/pdf/coppa_sbp_1.16_0.pdf.

[2] Children’s Online Privacy Protection Rule, 89 Fed. Reg. 2034 (proposed Jan.11, 2024) (to be codified at 16 C.F.R. pt. 312).

[3] Press Release, Fed. Trade Comm’n, FTC Seeks Comments on Children’s Online Privacy Protection Act Rule (July 25, 2019), https://www.ftc.gov/news-events/news/press-releases/2019/07/ftc-seeks-comments-childrens-online-privacy-protection-act-rule.

[4] Children’s Online Privacy Protection Rule, supra note 1, at 1.

[5] On January 20, 2025, President Trump issued an order imposing a regulatory freeze on all executive agencies. See White House, Regulatory Freeze Pending Review (Jan. 20, 2025), https://www.whitehouse.gov/presidential-actions/2025/01/regulatory-freeze-pending-review/. While the extent to which independent agencies like the FTC are subject to the order may be subject to litigation, the presidential memorandum signals skepticism regarding actions taken by such agencies in the final days of the Biden administration. The FTC may choose to take steps consistent with Section 2 of the memorandum, which would involve withdrawal of the final COPPA Rule for review by a Republican majority (which, if re-approved, would then be sent to the federal register for publication). Accordingly, the publication in the federal register and implementation of the COPPA Rule should be monitored, as it could be subject to other actions taken to delay or revoke it, such as through the Congressional Review Act. See 5 U.S.C. §§ 801 et seq.

[6] See Andrew N. Ferguson, Comm’r, Fed. Trade Comm’n, Concurring Statement of Commissioner Andrew N. Ferguson COPPA Rule Amendments Matter Number P195404 (Jan. 16, 2025), https://www.ftc.gov/system/files/ftc_gov/pdf/ferguson-coppa-concurrence-revised.pdf.

[7] See Adjustments to Civil Penalty Amounts, 90 Fed. Reg. 5580 (Jan. 17, 2025) (to be codified at 16 C.F.R. pt. 1). The FTC annually adjusts the civil penalty amount applicable to COPPA violations based on inflation, pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. See Press Release, Fed. Trade Comm’n, FTC Publishes Inflation-Adjusted Civil Penalty Amounts for 2024 (Jan. 11, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/01/ftc-publishes-inflation-adjusted-civil-penalty-amounts-2024?utm_source=govdelivery. Accordingly, civil penalty violation amounts will rise in future years.

[8] See, e.g., S.2073, Kids Online Safety and Privacy Act, 118th Cong. (as passed by Senate, July, 30, 2024).

[9] Fed. Trade Comm’n, Complying with COPPA: Frequently Asked Questions (Jan. 2024), https://www.ftc.gov/business-guidance/resources/complying-coppa-frequently-asked-questions.

[10] Id.

[11] 16 C.F.R. §§ 312.4 – 312.5. All citations to the COPPA Rule are to the COPPA Rule as amended, unless otherwise stated.

[12] Id. at § 312.6.

[13] Id. at § 312.8.

[14] Id. at § 312.10.

[15] Id. at § 312.2.

[16] Children’s Online Privacy Protection Rule, supra note 1, at 9-10.

[17] 16 C.F.R. § 312.2; Complying with COPPA: Frequently Asked Questions, supra note 10.

[18] Children’s Online Privacy Protection Rule, supra note 1, at 8.

[19] Id. at 9.

[20] 16 C.F.R.§ 312.2. Examples of biometric data include “fingerprints; handprints; retina patterns; iris patterns; genetic data, including a DNA sequence; voiceprints; gait patterns; facial templates; or faceprints.”

[21] Id. at § 312.4(c)(1)(iii).

[22] Id. at § 312.4(c)(1)(iv).

[23] Id. at §§ 312.4(a) – (c)(1).

[24] Id. at § 312.4(d).

[25] Id. at § 312.4(d)(2).

[26] Id. at § 312.4(d)(3).

[27] Id. at § 312.4(d)(4).

[28] Id. at § 312.4(d)(2).

[29] Id. at § 312.5(a)(1).

[30] Id. at § 312.5(b)(2)(ii).

[31] Id. at § 312.5(b)(2)(vi)

[32] Id. at § 312.5(b)(2)(vii).

[33] Id. at § 312.5(b)(2)(ix). See also id. at § 312.2 (modifying the definition of “online contact information” to include a “mobile telephone number” in order to “give [companies] another way to initiate the process of seeking parental consent quickly and effectively.” Children’s Online Privacy Protection Rule, supra note 1, at 16).

[34] 16 C.F.R. § 312.5(c)(9).

[35] See, e.g., 106. Fed. Trade Comm’n, Enforcement Policy Statement Regarding the Applicability of the COPPA Rule to the Collection and Use of Voice Recordings (Oct. 20, 2017), https://www.ftc.gov/system/files/documents/public_statements/1266473/coppa_policy_statement_audiorecordings.pdf.

[36] 16 C.F.R. § 312.5(c)(9).

[37] Id. at § 312.5(a)(2); Children’s Online Privacy Protection Rule, supra note 1, at 106.

[38] 16 C.F.R. § 312.5(a)(2).

[39] Id. at § 312.10.

[40] Id.

[41] Id.

[42] Id.

[43] Id. at § 312.8(a).

[44] Id. at § 312.8(b).

[45] Id. at § 312.8(b)(1)-(3).

[46] Id. at § 312.8(c).

[47] Children’s Online Privacy Protection Rule, supra note 1, at 159. See generally 16 C.F.R. § 312.11.

[48] 16 C.F.R. § 312.11(g).

[49] Id. at § 312.5(c)(4).

[50] Children’s Online Privacy Protection Rule, supra note 1, at 116.

[51] Id. at 118-19. The American Civil Liberties Union argued the proposal was inconsistent with the COPPA statute given the statute states regulations “shall” permit operators to respond “more than once directly to a specific request from a child” when parents are provided notice and an opportunity to opt out. Id. at 117-18.

[52] Id. at 3-4. See also Complying with COPPA: Frequently Asked Questions, supra note 10, Section N.

[53] Children’s Online Privacy Protection Rule, supra note 1, at 4.

[54] Id.

[55] Id. at 56-61.

[56] Id. at 88-89.

[57] Lina M. Khan, Chair, Fed. Trade Comm’n, Statement of Chair Lina M. Khan Regarding the Final Rule Amending the Children’s Online Privacy Protection Rule Commission File No. P195404 (Jan. 16, 2025), https://www.ftc.gov/system/files/ftc_gov/pdf/statement-of-chair-lina-m-khan-re-coppa-amendments-1-16-2025.pdf.

[58] Id. at 1.

[59] Id. at 4.

[60] Andrew N. Ferguson, Comm’r, Fed. Trade Comm’n, Concurring Statement of Commissioner Andrew N. Ferguson COPPA Rule Amendments Matter Number P195404 (Jan. 16, 2025), https://www.ftc.gov/system/files/ftc_gov/pdf/ferguson-coppa-concurrence-revised.pdf.

[61] Id. at 1-3.

[62] Id. at 3.

[63] Id.

[64] Alvaro M. Bedoya, Comm’r, Fed. Trade Comm’n, Statement of Commissioner Alvaro M. Bedoya Joined by Commissioner Rebecca Kelly Slaughter Notice of Final Rulemaking to Update the Children’s Online Privacy Protection Rule (COPPA Rule) (Jan. 16, 2025), https://www.ftc.gov/system/files/ftc_gov/pdf/bedoya-coppa-statement-2025-01-16.pdf.

[65] Press Release, Fed. Trade Comm’n, Fortnite Video Game Maker Epic Games to Pay More Than Half a Billion Dollars over FTC Allegations of Privacy Violations and Unwanted Charges (Dec. 19, 2022), https://www.ftc.gov/news-events/news/press-releases/2022/12/fortnite-video-game-maker-epic-games-pay-more-half-billion-dollars-over-ftc-allegations.

[66] Press Release, Fed. Trade Comm’n, Genshin Impact Game Developer Will be Banned from Selling Lootboxes to Teens Under 16 without Parental Consent, Pay a $20 Million Fine to Settle FTC Charges (Jan. 17, 2025), https://www.ftc.gov/news-events/news/press-releases/2025/01/genshin-impact-game-developer-will-be-banned-selling-lootboxes-teens-under-16-without-parental.

[67] Andrew N. Ferguson, Comm’r, Fed. Trade Comm’n, Statement of Commissioner Andrew N. Ferguson Concurring in Part and Dissenting in Part In the Matter of Cognosphere, LLC, (Jan. 17, 2025), https://www.ftc.gov/system/files/ftc_gov/pdf/ferguson-cognosphere-concurrence.pdf.

[68] In September 2024, the House Energy and Commerce Committee passed COPPA 2.0 by a voice vote. In July 2024, the U.S. Senate passed the Kids Online Safety and Privacy Act, which included COPPA 2.0, by a 91-3 vote. In July 2023, the Senate Commerce, Science, and Transportation Committee unanimously passed COPPA 2.0. See Press Release, Ed Markey, Sen. of Mass., Senator Markey Celebrates FTC’s Update to Children’s Online Privacy Rule, (Jan. 16, 2025), https://www.markey.senate.gov/news/press-releases/senator-markey-celebrates-ftcs-update-to-childrens-online-privacy-rule.

[69] Id.

[70] See Securing Children Online through Parental Empowerment (SCOPE) Act, H.B. 18, 88th Leg., R.S. (2023).

[71] See Protecting Our Kids from Social Media Addiction Act, S.B. 976, 88th Leg. (2024).

[72] See Press Release, Ken Paxton, Att’y Gen. of Tex., Attor­ney Gen­er­al Ken Pax­ton Sues Tik­Tok for Shar­ing Minors’ Per­son­al Data In Vio­la­tion of Texas Parental Con­sent Law (Oct. 3, 2024), https://www.texasattorneygeneral.gov/news/releases/attorney-general-ken-paxton-sues-tiktok-sharing-minors-personal-data-violation-texas-parental.

[73] See Press Release, Ken Paxton, Att’y Gen. of Tex., Attor­ney Gen­er­al Ken Pax­ton Launch­es Inves­ti­ga­tions into Character.AI, Red­dit, Insta­gram, Dis­cord, and Oth­er Com­pa­nies over Children’s Pri­va­cy and Safe­ty Prac­tices as Texas Leads the Nation in Data Pri­va­cy Enforcement (Dec. 12, 2024), https://www.texasattorneygeneral.gov/news/releases/attorney-general-ken-paxton-launches-investigations-characterai-reddit-instagram-discord-and-other.

[74] See Press Release, Eur. Comm’n, Commission opens formal proceedings against Meta under the Digital Services Act related to the protection of minors on Facebook and Instagram (May 15, 2024), (IP/24/2664); see also Press Release, Eur. Comm’n, Commission opens formal proceedings against TikTok under the Digital Services Act (Feb. 18, 2024), (IP/24/926).

[75] Press Release, Austl. eSafety Comm’r, Social Media Age Restrictions (Dec. 20, 2024), https://www.esafety.gov.au/about-us/industry-regulation/social-media-age-restrictions.

The following Gibson Dunn lawyers prepared this update: Ashley Rogers, Ryan T. Bergsieker, Natalie Hausknecht, Vivek Mohan, Lore Leitner, Ashlie Beringer, Svetlana Gans, Alexus Leach, Nick Carey, Samantha Abrams-Widdicombe, Amy Shao, and Jayee Malwankar.

Gibson Dunn lawyers are available to assist in addressing any questions you may have about these developments. Please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any leader or member of the firm’s Privacy, Cybersecurity & Data Innovation practice group:

United States:
Ashlie Beringer – Co-Chair, Palo Alto (+1 650.849.5327, aberinger@gibsondunn.com)
Ryan T. Bergsieker – Denver (+1 303.298.5774, rbergsieker@gibsondunn.com)
Gustav W. Eyler – Washington, D.C. (+1 202.955.8610, geyler@gibsondunn.com)
Cassandra L. Gaedt-Sheckter – Palo Alto (+1 650.849.5203, cgaedt-sheckter@gibsondunn.com)
Svetlana S. Gans – Washington, D.C. (+1 202.955.8657, sgans@gibsondunn.com)
Lauren R. Goldman – New York (+1 212.351.2375, lgoldman@gibsondunn.com)
Stephenie Gosnell Handler – Washington, D.C. (+1 202.955.8510, shandler@gibsondunn.com)
Natalie J. Hausknecht – Denver (+1 303.298.5783, nhausknecht@gibsondunn.com)
Jane C. Horvath – Co-Chair, Washington, D.C. (+1 202.955.8505, jhorvath@gibsondunn.com)
Martie Kutscher Clark – Palo Alto (+1 650.849.5348, mkutscherclark@gibsondunn.com)
Kristin A. Linsley – San Francisco (+1 415.393.8395, klinsley@gibsondunn.com)
Timothy W. Loose – Los Angeles (+1 213.229.7746, tloose@gibsondunn.com)
Vivek Mohan – Palo Alto (+1 650.849.5345, vmohan@gibsondunn.com)
Rosemarie T. Ring – Co-Chair, San Francisco (+1 415.393.8247, rring@gibsondunn.com)
Ashley Rogers – Dallas (+1 214.698.3316, arogers@gibsondunn.com)
Sophie C. Rohnke – Dallas (+1 214.698.3344, srohnke@gibsondunn.com)
Eric D. Vandevelde – Los Angeles (+1 213.229.7186, evandevelde@gibsondunn.com)
Benjamin B. Wagner – Palo Alto (+1 650.849.5395, bwagner@gibsondunn.com)
Debra Wong Yang – Los Angeles (+1 213.229.7472, dwongyang@gibsondunn.com)

Europe:
Ahmed Baladi – Co-Chair, Paris (+33 (0) 1 56 43 13 00, abaladi@gibsondunn.com)
Kai Gesing – Munich (+49 89 189 33-180, kgesing@gibsondunn.com)
Joel Harrison – Co-Chair, London (+44 20 7071 4289, jharrison@gibsondunn.com)
Lore Leitner – London (+44 20 7071 4987, lleitner@gibsondunn.com)
Vera Lukic – Paris (+33 (0) 1 56 43 13 00, vlukic@gibsondunn.com)
Lars Petersen – Frankfurt/Riyadh (+49 69 247 411 525, lpetersen@gibsondunn.com)
Robert Spano – London/Paris (+44 20 7071 4000, rspano@gibsondunn.com)

Asia:
Connell O’Neill – Hong Kong (+852 2214 3812, coneill@gibsondunn.com)
Jai S. Pathak – Singapore (+65 6507 3683, jpathak@gibsondunn.com)

© 2025 Gibson, Dunn & Crutcher LLP.  All rights reserved.  For contact and other information, please visit us at www.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.

Gibson Dunn’s Workplace DEI Task Force aims to help our clients develop creative, practical, and lawful approaches to accomplish their DEI objectives following the Supreme Court’s decision in SFFA v. Harvard. Prior issues of our DEI Task Force Update can be found in our DEI Resource Center. Should you have questions about developments in this space or about your own DEI programs, please do not hesitate to reach out to any member of our DEI Task Force or the authors of this Update (listed below).

Key Developments

On January 20, President Trump issued an executive order titled “Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government,” which defines “sex” as “an individual’s immutable biological classification as either male or female” and directs federal agencies to “enforce laws governing sex-based rights, protections, opportunities, and accommodations to protect men and women as biologically distinct sexes.” The order also directs federal agencies to ensure that funds awarded via federal grants do not promote “gender ideology,” a term it defines to include “the idea that there is a vast spectrum of genders that are disconnected from one’s sex” and that “replaces the biological category of sex with an ever-shifting concept of self-assessed gender identity.” More information on this executive order can be found in our January 21, 2025 client alert.

Also on January 20, President Trump issued an executive order titled “Ending Radical and Wasteful Government DEI Programs And Preferencing,” which directs the termination of all DEI programs, policies, and activities in the federal government, including for federal contractors and grantees, and directs the termination of “equity-related” grants or contracts. The order also directs agencies to create a list of all federal contractors who have provided DEI trainings to federal employees and federal grant recipients who received grants to “provide or advance DEI, DEIA, or ‘environmental justice’ programs, services, or activities since January 20, 2021.” More information on this executive order can be found in our January 21, 2025 client alert.

On January 21, President Trump issued an executive order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” The order rescinds several executive actions issued by prior administrations, including Executive Order 11246, which imposed affirmative action obligations on federal contractors in addition to non-discrimination requirements. Federal contracts and grants must now include (1) a clause requiring the recipient to agree that compliance “with applicable Federal anti-discrimination laws” is a “material” term of the contract or grant, and (2) a certification that the contractor or grant recipient “does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.” The order also directs agency heads to submit to the White House within 120 days recommendations for enforcing federal civil-rights laws and encouraging the private sector to end “illegal discrimination and preferences, including DEI.” Agencies must identify “up to nine” large companies or non-profits for “potential civil compliance investigations.” More information on this executive order can be found in our January 22, 2025 client alert.

Also on January 21, President Trump issued an Executive Order titled “Keeping Americans Safe in Aviation.” The order directs the Secretary of Transportation and the Federal Aviation Administrator to “immediately return to non-discriminatory” and “merit-based hiring.” The order rescinds any previous DEI initiatives by the Federal Aviation Administration “in favor of hiring, promoting, and otherwise treating employees on the basis of individual capacity, competence, achievement, and dedication.” The Secretary of Transportation and the Federal Aviation Administrator are instructed to review “past performance and performance standards of all individuals in critical safety positions” and to replace individuals who fall below those standards.

On January 21, President Trump named Commissioner Andrea R. Lucas as Acting Chair of the EEOC. Lucas, previously an attorney at Gibson Dunn, has served as an EEOC Commissioner since 2020. She is the EEOC’s only current Republican appointee. Upon her appointment, Acting Chair Lucas stated, “Consistent with the President’s Executive Orders and priorities, my priorities will include rooting out unlawful DEI-motivated race and sex discrimination; protecting American workers from anti-American national origin discrimination; defending the biological and binary reality of sex and related rights, including women’s rights to single‑sex spaces at work; protecting workers from religious bias and harassment, including antisemitism; and remedying other areas of recent under-enforcement.” In the past three years, Lucas has initiated 38 commissioner charges, more than any other commissioner.

On January 23, Texas Attorney General Ken Paxton and nine other State Attorneys General issued a letter to financial institutions including BlackRock, Goldman Sachs, Morgan Stanley, JPMorgan Chase, Bank of America, and Citigroup, warning that their DEI and ESG commitments could lead to enforcement actions if found to violate legal, contractual, or fiduciary obligations. The Attorneys General stated they would extend to each financial institution “an opportunity to avoid a lengthy enforcement action” by responding to thirty-five questions related to the institutions’ DEI and ESG efforts. The Attorneys General expressed concern that the institutions “appear to have embraced race- and sex-based quotas and to have made business and investment decisions based not on maximizing shareholder and asset value, but in the furtherance of political agendas.”

On January 10, following a four-day bench trial, the U.S. District Court for the Northern District of Texas held that American Airlines violated ERISA by allowing its investment manager, BlackRock, to invest its employees’ 401(k) Plan in environmental, social, and governance (“ESG”) objectives, which the court defined to include companies’ efforts to “promot[e] racial and gender diversity, equity, and inclusion (‘DEI’) programs and hiring practices.” The court made detailed findings of fact about Blackrock’s ESG-related initiatives, American’s corporate ESG goals, and the relationship between the two companies—which the court described as “incestuous,” noting that Blackrock was one of American’s largest investors and had “financed approximately $400 million of American’s corporate debt at a time when American was experiencing financing difficulties.” The court concluded that, due to American’s non-pecuniary interest in ESG and its relationship with BlackRock, the company “failed to loyally investigate BlackRock’s ESG investment activities” and ensure its employees’ 401(k) Plan was invested in a manner that furthered their best financial interests. However, because the court concluded that American acted “according to prevailing industry practices,” it found no violation of the fiduciary duty of prudence occurred. The court requested further briefing on damages and remedies.

Media Coverage and Commentary:

Below is a selection of recent media coverage and commentary on these issues:

• The New York Times, “The Cheat Sheet on Trump’s First Week” (January 25): Sarah Kessler of The New York Times DealBook writes that “President Trump made it clear his attacks on diversity, equity and inclusion programs won’t be restricted to the federal government,” and that “[i]n general, legal experts consider policies that provide opportunities or benefits to a specific group based on race or gender to be vulnerable” to challenge by the new administration. “Executives are anxious to find out which agencies will conduct investigations and enforcement actions, and what they may do to make examples out of target companies,” said Jason Schwartz, the labor and employment co-chair at Gibson Dunn. According to Kessler, the biggest question in boardrooms is which companies will be the first targets. Schwartz said checking the list of “woke companies” on the website of America First Legal, a Trump-aligned group, might be “a good starting place for hints.” 
• ABC News: ABC News anchor Linsey Davis interviews Gibson Dunn’s Jason Schwartz about the impact of President Trump’s executive orders. 
• Bloomberg, “Companies Parse What Makes a DEI Program Illegal Under Trump” (January 23): Clara Hudson, Isabel Gottlieb, and Andrew Ramonas of Bloomberg write that President Trump’s recent executive order targeting DEI “will further galvanize corporate diversity rollbacks” and “accelerate shifts” in how companies address diversity, including by prompting “more businesses to shut down their diversity teams or fold them into other areas of their operations.” Bloomberg reports that these rollbacks had already started, stating that “[w]hile much of corporate America has steadfastly pursued diversity initiatives,” many businesses have altered or eliminated diversity initiatives following “mounting conservative attacks” and the Supreme Court’s SFFA They report that many companies had renamed or rebranded their programs, but that President Trump’s recent order “aims to blunt” that strategy by calling out any diversity program “whether specifically denominated ‘DEI’ or otherwise.” The authors quote Gibson Dunn’s Jason Schwartz, who recommends that companies consider whether they can broaden the eligibility requirements for their DEI initiatives while still meeting program objectives. Schwartz says that corporate “goals remain the same”—to attract “the best talent from the broadest, most robust diverse pipeline.” 
• The Washington Post, “In first days, Trump deals ‘death blow’ to DEI and affirmative action” (January 23): Julian Mark, Taylor Telford, and Susan Svrluga of The Washington Post report on President Trump’s initial actions, which they describe as seeking to “eviscerate the surviving remnants of affirmative action” and put a “hard stop” to DEI initiatives in the federal government. They report on Trump’s actions in his first week in office, which include “order[ing] U.S.-run diversity offices to close and scores of their workers to [be] put on administrative leave,” and “suspend[ing] dozens of contracting programs aimed at minorities and women.” The article quotes the EEOC’s three Democratic members, who said that President Trump’s rescission of the 1965 executive order directing federal contractors to take “affirmative action” measures has removed “a source of protection” for “millions of Americans.” In reference to President Trump’s direction that the Attorney General and agency heads identify “nine potential civil compliance investigations” of large entities, including publicly traded corporations, large nonprofits, and universities with endowments over $1 billion, the article quotes Gibson Dunn’s Jason Schwartz, who describes the order as a direction to “find nine big whales and make examples of them.” The article also quotes Schwartz’s description of a provision in the order that may have been designed to create a basis for False Claims Act liability: “They are handing out sheriff’s badges to private citizens to sue about government contractor DEI programs,” Schwartz said. The article quotes Noah Feldman, a constitutional law professor at Harvard Law School, who says these actions indicate that President Trump is “testing the boundaries” of the Supreme Court’s affirmative action rulings and attempting to extend their reach from educational institutions into the private sector. According to Ricardo Mimbela, an ACLU spokesperson, the ACLU is “analyzing” the executive orders and assessing how to “protect people’s fundamental rights.”
• CBS News, “Group of Attorneys General Urge Walmart to Reconsider Ending DEI Initiatives” (January 14): CBS News’s Christian Olaniran reports on the January 9 letter to Walmart CEO Doug McMillon, sent by thirteen Democratic state attorneys general, expressing “concern regarding Walmart’s recent decision to step away from its commitments to diversity, equity, and inclusion.” The letter highlighted the company’s recent decisions to “phase out supplier diversity programs, close down the Center for Racial Equality, end training for staff, and remove the words ‘diversity’ and ‘DEI’ from company documents and employee titles.” The letter acknowledged that corporations have faced “anti-DEI pressure,” but argued that the “decision to jettison DEI initiatives is not required by law” and that companies with diverse leadership “overperform” compared to those without. Olaniran’s reporting also referenced recent changes in DEI policies at other companies, including McDonald’s and Meta.
• The Washington Post, “Target Becomes Latest Company to Roll Back DEI Programs” (January 24): Hannah Ziegler and Julian Mark of The Washington Post report on Target’s decision to scale back many of its DEI initiatives in the wake of “a tougher legal environment for those programs and new threats from the White House.” In a January 24 press release, the company stated that it intended to make several changes to its policies including, among other things, ending its three-year DEI goals, ceasing to participate in external diversity-focused surveys, ensuring its employee resource groups are open to all; and evolving its supplier diversity efforts. The company stated “[w]e remain focused on driving our business by creating a sense of belonging for our team, guests and communities through a commitment to inclusion.”

Case Updates:

Below is a list of updates in new and pending cases:

1. Contracting claims under Section 1981, the U.S. Constitution, and other statutes:

• Desai v. Paypal, No. 1:25-cv-00033-AT (S.D.N.Y. 2025): On January 2, 2025, Andav Capital and its founder Nisha Desai sued PayPal, alleging that PayPal unlawfully discriminates by administering its investment program for minority-owned businesses in a way that favors Black and Latino applicants. Desai, an Asian-American woman, alleges PayPal violated Section 1981, Title VI, and New York state anti-discrimination law by failing to fully consider her funding application and announcing first-round investments only in companies with “at least one general partner who was black or Latino.” She seeks a declaratory judgment that the investment program is unlawful, an injunction barring PayPal from “knowing or considering race or ethnicity” in administering the program, and damages.
  • Latest update: The docket does not yet reflect that PayPal has been served.
• Do No Harm v. Pfizer, Inc., No. 23-15 (2nd Cir. 2022): On September 15, 2022, Do No Harm filed suit against Pfizer, alleging that Pfizer’s Breakthrough Fellowship Program unlawfully excludes white and Asian-American applicants on the basis of race in violation of federal and state laws. On December 16, 2022, the U.S. District Court for the Southern District of New York dismissed the case after finding Do No Harm lacked standing to seek a preliminary injunction when it “failed to identify a single injured member by name” who could demonstrate that they were willing and able to apply to the fellowship. On March 6, 2024, a panel of the Second Circuit upheld the dismissal. On March 20, 2024, Do No Harm filed a petition for rehearing.
  • Latest update: On January 10, 2025, the Second Circuit reversed the dismissal of Do No Harm’s lawsuit, concluding “that the district court applied the wrong standard in dismissing” Do No Harm’s case for lack of standing because “[t]he burden for establishing standing at the dismissal stage is lower” than that for a preliminary injunction. The Second Circuit remanded the case to the district court to assess standing “applying the standard applicable at the pleading stage.”
• Hierholzer v. Guzman, No. 24-1187 (4th Cir. 2025): In January 2023, Marty Hierholzer alleged that the Small Business Administration (SBA) discriminated on the basis of race when it denied his application to SBA’s 8(a) program. Through the 8(a) program, the SBA provides financial assistance to small businesses owned by “socially and economically disadvantaged individuals.” SBA regulations provide a rebuttable presumption of social disadvantage to members of certain racial groups and an opportunity for members of other groups to establish social disadvantage and 8(a) eligibility. Hierholzer is of Scottish and German descent. The U.S. District Court for the Eastern District of Virginia held that Heirholzer’s claims were moot after a separate district court ruling out of Tennessee enjoined the SBA from using the rebuttable presumption standard. The court also found Hierholzer lacked standing because he did not allege 8(a) eligibility and did not sufficiently plead economic or social disadvantage. Heirholzer appealed to the Fourth Circuit.
  • Latest update: On January 3, 2025, the Fourth Circuit held that the district court erred in treating Hierholzer’s claims as moot because the decision enjoining the SBA’s rebuttable presumption “has not resulted in a final judgment.” However, the Court found Hierholzer lacked standing because, even if the presumption were enjoined, Hierholzer failed to plausibly allege that he could satisfy other race neutral eligibility requirements for the program.

• Brooke Henderson, et al. v. Springfield R-12 School District, et al., No. 23-01374 (8th Cir. 2023): On August 18, 2021, two educators sued a Springfield, Missouri school district alleging that the district’s mandatory equity training violated their First Amendment rights. The educators claimed that the equity training constituted compelled speech, content and viewpoint discrimination, and an unconstitutional condition of employment. The at-issue Fall 2020 equity training included sessions on anti-bias, anti-racism, and white supremacy. On January 12, 2023, the district court granted the defendants’ motion for summary judgment. The plaintiffs appealed the decision to the U.S. Court of Appeals for the Eighth Circuit. Oral argument was held on February 15, 2024. Counsel for the plaintiffs argued that the training compelled educators to engage in political speech, while counsel for the defendants argued that the educators were not compelled because they did not face punishment. On September 13, 2024, a panel of the Eighth Circuit unanimously held that the plaintiffs’ fear of punishment was too speculative to constitute injury under the First Amendment and affirmed the decision below. On November 27, 2024, the Eighth Circuit granted a petition for rehearing en banc.
  • Latestupdate: On January 15, 2025, oral argument was held before the court en banc. Counsel for the plaintiffs argued that the equity training was compelled speech in violation of the First Amendment because silence was not an option—the training required the plaintiffs to take a stand or to face consequences in the form of being labelled unprofessional. Counsel for the defendants argued the plaintiffs would not face punishment if they stayed silent; the point of the training was merely to encourage discussion.

• American Alliance for Equal Rights v. McDonald’s Corporation et al., No. 3:25-cv-00050 (M.D. Tenn. 2025): On January 12, 2025, the American Alliance for Equal Rights (AAER) filed a complaint against McDonald’s and International Scholarship & Tuition Services, Inc. (ISTS), alleging that they operate a college scholarship program that “discriminates against high-schoolers based on their ethnicity,” in violation of § 1981. AAER alleges that the HACER scholarship program, which ISTS administers on McDonald’s behalf, “is open only to Hispanics.” AAER claims that the program “flatly” bars non-Hispanic students from applying “based on their ethnic heritage” and is therefore unlawful. AAER seeks declaratory and injunctive relief barring consideration of race, ethnicity, ancestry, or nationality in consideration of scholarship applications, as well as a preliminary injunction to stop the program from closing the application window for current applicants on February 6, 2025. Gibson Dunn represents McDonald’s in this action.
  • Latest update: McDonald’s deadline for responding to the motion for preliminary injunction is February 3, 2025.

2. Challenges to statutes, agency rules, and regulatory decisions:

• Do No Harm v. Gianforte, No. 6:24-cv-00024-BMM-KLD (D. Mont. 2024): On March 12, 2024, Do No Harm filed a complaint on behalf of “Member A,” a white female dermatologist in Montana, alleging that a Montana law requiring the governor to “take positive action to attain gender balance and proportional representation of minorities resident in Montana to the greatest extent possible” when making appointments to the twelve-member Medical Board violates the Equal Protection Clause. Do No Harm alleges that since ten seats are currently held by six women and four men, Montana law requires that the remaining two seats be filled by men, which would preclude Member A from holding the seat. On May 3, 2024, Governor Gianforte moved to dismiss the complaint for lack of subject matter jurisdiction, arguing that Do No Harm lacks standing because Member A has not applied for or been denied any position. Gianforte also argued that the plaintiff’s pre-enforcement challenge was not ripe because his administration does not interpret the statute as a quota. On May 24, 2024, Do No Harm filed an amended complaint, describing additional Members B, C, and D, who are each “qualified, ready, willing, and able to be appointed” to the board. On June 7, Gianforte moved to dismiss the amended complaint, arguing again that the pseudonymous members lacked standing and that the case still was not ripe because the statute imposed only reporting requirements regarding diversity, so it posed no threat to the new members.
  • Latest update: On January 10, 2025, Magistrate Judge De Soto recommended that the case be dismissed for lack of subject matter jurisdiction. Magistrate Judge De Soto found Do No Harm lacked standing because it did not allege “facts demonstrating that at least one Member is both ‘able and ready’ to apply for a Board seat in the reasonably foreseeable future.” For the same reasons, the Magistrate Judge found the case unripe.
• Do No Harm v. Edwards, No. 5:24-cv-16-JE-MLH (W.D. La. 2024): On January 4, 2024, Do No Harm sued then-Governor Edwards of Louisiana over a 2018 law requiring a certain number of “minority appointee[s]” to be appointed to the State Board of Medical Examiners. Do No Harm brought the challenge under the Equal Protection Clause and requested a permanent injunction against the law. On February 28, 2024, Governor Edwards answered the complaint, denying all allegations including allegations related to Do No Harm’s standing. On December 20, 2024, Governor Jeff Landry—who replaced Governor Edwards—moved to dismiss for lack of subject matter jurisdiction. He contended that, because he signed a declaration indicating that he does not intend to enforce the challenged law, the plaintiff’s claims are moot. Governor Landry also argued that the suit is barred by sovereign immunity.
  • Latest update: On January 10, 2025, Do No Harm filed an opposition to the motion to dismiss, asserting that Governor Landry’s declaration did not moot the case because the statute remains on the books and a “future governor will be bound to enforce the racially discriminatory aspects of [the law] regardless of Governor Landry’s declaration.”
• Simon et al. v. Kay Ivey, et al. 25-cv-00067 (N.D. Al. 2025): On January 14, 2025 three professors and three students within the University of Alabama system and the Alabama NAACP filed a complaint against Alabama Governor Kay Ivey and the University of Alabama Board of Trustees, alleging that Alabama Senate Bill 129, which bans DEI programs at state agencies, local boards of education, and public universities, violates the First and Fourteenth Amendments. The Alabama NAACP alleges that the law “censor[s] dissenting viewpoints” by limiting the teaching of and prohibiting the funding of student groups and school offices associated with “divisive concepts.” SB 129 covers several “divisive topics,” including that race, gender, or identity makes one “inherently superior or inferior,” that moral character is determined by race, color, religion, sex, ethnicity, or national origin, and “that fault, blame, or bias should be assigned to members of a race, color, religion, sex, ethnicity, or national origin, on the basis of race, color, religion, sex, ethnicity.” The plaintiffs allege that SB 129’s limitations constitute viewpoint discrimination in violation of the First Amendment, undercut their right to freedom of association, are void for vagueness, and violate the Equal Protection Clause by intentionally discriminating against Black people, “specifically Black students and Black educators, who are more likely to benefit from discussions on these topics.” Plaintiffs request that the law be declared unconstitutional and both preliminarily and permanently enjoined.
  • Latest update: The docket does not yet reflect that the defendants have been served.
• National Association of Scholars v. Granholm, No. 25-cv-00077 (W.D. Tex. 2025): On January 16, 2025, the National Association of Scholars—a group of professors, faculty, and researchers at colleges and universities across the United States—sued the United States Department of Energy, alleging that the Department’s Office of Science unlawfully requires research grant applicants to show how they would “promote diversity, equity, and inclusion in research projects” through its Promoting Inclusive and Equitable Research plan. The Association alleges that requiring grant applicants to show how they would promote DEI in their projects violates applicants’ First Amendment rights by requiring them to express ideas with which they disagree, that the Department lacked statutory authority to adopt the plan, and that the plan violates the procedural requirements of the Administrative Procedure Act. The Association seeks declaratory and injunctive relief.
  • Latest update: The docket does not yet reflect that the defendants have been served.

Legislation Updates:

• On January 23, Congressman Tom Tiffany (R-WI) introduced the Fairness, Anti-Discrimination and Individual Rights Act (H.R. 711), referred to as the “FAIR Act.” If enacted, the bill would prohibit intentional discrimination or preferential treatment on the basis of race, color, or national origin by the federal government or its agents with respect to “[any] Federal contract or subcontract[,] federal employment[,] or any other federally conducted program or activity.” In addition, the bill would prohibit the federal government from encouraging or requiring “preference” on the basis of race, color, or national origin. It defines “preference” to include any advantage such as “a quota, set-aside, numerical goal, timetable, or other numerical objective.” The bill’s prohibitions extend to state and private entities that receive federal aid, including educational institutions that receive federal funding. The bill also calls for an audit of all federal agencies and departments within six months of its enactment to ensure compliance, and it creates a private right of action for individuals who believe they were discriminated against.

The following Gibson Dunn attorneys assisted in preparing this client update: Jason Schwartz, Mylan Denerstein, Blaine Evanson, Molly Senger, Zakiyyah Salim-Williams, Zoë Klein, Cate McCaffrey, Jenna Voronov, Emma Eisendrath, Felicia Reyes, Allonna Nordhavn, Laura Wang, Maya Jeyendran, Kristen Durkan, Ashley Wilson, Lauren Meyer, Kameron Mitchell, Chelsea Clayton, Albert Le, Emma Wexler, Heather Skrabak, and Godard Solomon.

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 Labor and Employment practice group, or the following practice leaders and authors:

Jason C. Schwartz – Partner & Co-Chair, Labor & Employment Group
Washington, D.C. (+1 202-955-8242, jschwartz@gibsondunn.com)

Katherine V.A. Smith – Partner & Co-Chair, Labor & Employment Group
Los Angeles (+1 213-229-7107, ksmith@gibsondunn.com)

Mylan L. Denerstein – Partner & Co-Chair, Public Policy Group
New York (+1 212-351-3850, mdenerstein@gibsondunn.com)

Zakiyyah T. Salim-Williams – Partner & Chief Diversity Officer
Washington, D.C. (+1 202-955-8503, zswilliams@gibsondunn.com)

Molly T. Senger – Partner, Labor & Employment Group
Washington, D.C. (+1 202-955-8571, msenger@gibsondunn.com)

Blaine H. Evanson – Partner, Appellate & Constitutional Law Group
Orange County (+1 949-451-3805, bevanson@gibsondunn.com)

© 2025 Gibson, Dunn & Crutcher LLP.  All rights reserved.  For contact and other information, please visit us at www.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.

Gibson Dunn is proud to launch an Immigration Task Force, which will bring together the firm’s expertise in humanitarian immigration law, employment law, appellate and constitutional law, and administrative law and policy.

One primary goal of the Immigration Task Force will be to provide our clients with timely, thoughtful updates on immigration developments, including newly issued executive orders, court decisions, and other developments across both the business and humanitarian immigration sectors.

This work will, of course, dovetail with our robust pro bono immigration practice, which has long stood for the belief that lawyers have a responsibility to promote safety, freedom, and justice for those seeking refuge from persecution, safety from physical and sexual violence, and the chance to build a better life.  In the past, that practice has included representing Dreamers at the Supreme Court, mobilizing firmwide efforts to assist Afghans seeking safety from the Taliban, and assisting vulnerable child migrants obtain legal status.  You can learn more about our pro bono immigration practice here.

We are closely monitoring developments in the area and will prepare regular updates to help our clients, nonprofit partners, and our larger community navigate a rapidly evolving landscape.  The first of these updates appears below.

Should you have any questions about developments in this space, including how changes might impact your workforce or your community, please do not hesitate to reach out to any member of our Immigration Task Force, listed below.

Stuart F. Delery – Co-Chair, Administrative Law & Regulatory Practice Group,
Washington, D.C. (+1 202.955.8515, sdelery@gibsondunn.com)

Naima L. Farrell – Partner, Labor & Employment Practice Group,
Washington, D.C. (+1 202.887.3559, nfarrell@gibsondunn.com)

Nancy Hart – Partner, Litigation Practice Group,
New York (+1 212.351.3897, nhart@gibsondunn.com)

Katie Marquart – Partner & Chair, Pro Bono Practice Group,
Los Angeles (+1 213.229.7475, kmarquart@gibsondunn.com)

Laura Raposo – Associate General Counsel, Gibson Dunn,
New York (+1 212.351.5341, lraposo@gibsondunn.com)

Matthew S. Rozen – Partner, Appellate & Constitutional Law Practice Group,
Washington, D.C. (+1 202.887.3596, mrozen@gibsondunn.com)

Ariana Sañudo – Associate, Pro Bono Practice Group,
Los Angeles (+1 213.229.7137, asanudo@gibsondunn.com)

Betty X. Yang – Partner & Co-Chair, Trials Practice Group,
Dallas (+1 214.698.3226, byang@gibsondunn.com)

Immigration Updates: One Week After Inauguration

Immigration and border security, which were central themes of Donald Trump’s 2024 presidential campaign, have been clear priorities during the first days of his new administration.[1]  Within hours of taking office, President Trump signed numerous executive orders (EOs) and other similar documents addressing various aspects of immigration enforcement and border security.[2]  EOs—official documents through which the President directs and manages the federal government’s operations—have become a frequently-used tool enabling presidents to change government policy in the early days of a new administration with immediate effect.  Several of President Trump’s day-one EOs will have far-reaching implications for immigrants in the United States, refugees seeking safety in the United States, mixed-status families across the country.

Although the EOs issued so far do not directly address non-immigrant employment-based visas (like H1-Bs), some provisions may be relevant to the visa process generally or have other indirect effects on non-immigrants with employment-based visas.  For example, certain EOs seem to impose enforcement cooperation requirements on individuals or companies who interact with noncitizens; others impose broad new requirements on all aliens seeking to enter the country, even nonimmigrants on temporary visas. The impact of many of those orders will only be magnified by other EOs, new agency rules, and legislative actions anticipated for the coming weeks and months

While the immigration enforcement landscape is rapidly evolving, this Client Alert provides an overview of certain noteworthy recent developments.  Section I analyzes recent EOs (1) restricting U.S. citizenship; (2) imposing changes to border enforcement; (3) increasing immigration detention and removal of noncitizens; and (4) suspending refugee admissions.  Section II provides an overview of recent guidance and directives issued by federal agencies that oversee and interact with the immigration system under President Trump.  Section III details the Laken Riley Act, a measure increasing immigration detention that is soon expected to be signed into law.  Finally, Section IV provides an update regarding a court challenge to the Deferred Action for Childhood Arrivals (DACA) program.

I. Executive Orders

1. Citizenship

“Protecting the Meaning and Value of American Citizenship”[3]

This EO declares that an individual born in the United States is not a citizen if, at the time of their birth, (1) their mother is “unlawfully present” or (2) their mother’s presence is “lawful but temporary,” if in either circumstances their father is not a U.S. citizen or lawful permanent resident.  The EO applies to any child born after thirty days from its issuance on January 20, 2025.[4]  The EO posits that the Citizenship Clause of the Fourteenth Amendment to the U.S. Constitution (“Citizenship Clause”) was not meant to extend “universally to everyone born” in the United States, and that it has “always excluded from birthright citizenship persons who were born in the United States but not ‘subject to the jurisdiction thereof.’”[5]  The EO then asserts that “[a]mong the categories of individuals born in the United States and not subject to the jurisdiction thereof” are the two described above.

This reading of the Citizenship Clause is contrary to longstanding legal, social, and historical precedent on the issue; the Constitution has long been interpreted in law and policy to guarantee citizenship to those born on American soil regardless of race, creed or class.[6]  By way of background, the Citizenship Clause was  born out of the Reconstruction Era following the Civil War and the end of slavery, guaranteeing the citizenship of all persons born in the United States.[7]  This guarantee was clarified in United States v. Wong Kim Ark, a landmark 1898 Supreme Court case that confirmed the Citizenship Clause extended to children born in the United States to noncitizen parents – the exact population targeted by this EO.[8]  Wong Kim Ark excluded children born in the United States to foreign diplomats from the Citizenship Clause, establishing the paradigmatic class of persons “not subject to the jurisdiction” of the United States.[9]  Individuals who are “not fully subject to the sovereign authority of the United States,” better understood as those that “enjoy[] common law immunity from local law,” would be excluded from the automatic guarantees of the Citizenship Clause.[10]

This longstanding interpretation of the Citizenship Clause has not been without its opponents.  Several (unsuccessful) legislative efforts at narrowing the “subject to the jurisdiction” requirement have been made over the years.[11]  The issue of birthright citizenship has not been directly taken up by the Supreme Court in the past 125 years, but conservative judges on lower appellate courts have indirectly opined on the issue.[12]  Further, there is a body of legal scholars who have long argued that the Citizenship Clause’s guarantee of birthright citizenship lacks legitimacy.[13]

On January 20, the same day the EO was issued, the American Civil Liberties Union (ACLU) and other immigration nonprofits filed a lawsuit against the Trump Administration, arguing that the order violates the Citizenship Clause and other statutory provisions.[14]  Relying on Supreme Court precedent, the ACLU seeks an injunction against the order, asking for the continued protection of “America’s most fundamental promise.”[15]  The following day, on January 21, eighteen states similarly filed suit against the Trump Administration.[16]  That complaint details the longstanding history of the right of citizenship to all persons born in the United States, arguing that there are no other exceptions in the Citizenship Clause besides limited exclusions to those “not fully subject to United States law.”[17]  The complaint also alleges that President Trump acted outside of his authority because a president’s power to set immigration policy does not extend to the actions detailed in the order.[18]  On the same day, four additional states brought a separate lawsuit in a different jurisdiction.[19]  In establishing that the EO will cause “immediate and irreparable harm,” the complaint discloses that in 2022, approximately 153,000 children were born in the United States to two undocumented parents.[20]  Both suits are seeking a preliminary injunction to block the order before it is implemented.  Last week, other  immigrants-rights organizations also filed similar suits seeking an injunction against the order.[21]

On January 23, a federal judge in Seattle, Washington presiding over the four-state suit granted a temporary restraining order against the implantation of order, calling it “blatantly unconstitutional.”[22]  The order will remain in effect for fourteen days and applies nationally.

Notably, other EOs issued on the same day are based on the premise that this category of individuals – noncitizens, including those born on United States soil – are, in fact, subject to the jurisdiction of the United States.  For example, one other EO issued the same day requires noncitizens to register and present their fingerprints to the U.S. government[23]; another subjects them to the death penalty for qualifying offenses.[24]

2. Border Enforcement

In his inaugural address, President Trump stated that the U.S. government “fails to protect our magnificent, law-abiding American citizens but provides sanctuary and protection for dangerous criminals, many from prisons and mental institutions, that have illegally entered our country from all over the world.”[25]  He went on to say that “all illegal entry will immediately be halted, and we will begin the process of returning millions and millions of criminal aliens back to the places from which they came.”[26]  Immediately following his inauguration, President Trump issued several presidential actions with stated goals of repelling “invasions” of migrants at the country’s borders, expanding funding and power for border security, and increasing militarization at the southern border space overlap significantly and provide related, similar, or identical directives.  Certain pertinent directives are outlined below.

“Declaring a National Emergency at the Southern Border of the United States; “Clarifying the Military’s Role in Protecting the Territorial Integrity of the United States”

Invoking Sections 201 and 301 of the National Emergencies Act (50 U.S.C. 1601 et seq.), the first of these presidential actions is a proclamation that “declare[s] that a national emergency exists at the southern border of the United States [27]  This proclamation reinstated the national emergency President Trump declared in his first term and rescinded the Biden Administration EO that terminated that earlier emergency.[28]  In February 2019, President Trump declared a national emergency at the southern border as a way to direct the construction of a border wall.[29]  That declaration faced legal challenges on the basis that using the National Emergencies Act without a true emergency was a contravention of Congress’s will.[30]  Because crossings at the southern border have fallen dramatically in the last year,[31] similar challenges are likely here, although historically presidents have received substantial deference in the definitions of national emergencies.

The emergency declaration and a second EO, “Clarifying the Military’s Role in Protecting the Territorial Integrity of the United States,” direct an expansion of the military’s role in border enforcement.  The national emergency declaration (1) directs the Secretary of Defense to order members of the U.S. military to support the Secretary of Homeland Security’s efforts at the southern border, including by providing detention space and transportation and logistical support; (2) directs the Secretaries of Defense and Homeland Security to construct additional physical barriers along the southern border; and (3) directs the Secretaries of Defense and Homeland Security, in consultation with the Attorney General, to prioritize the impedance and denial of unauthorized entry at the southern border.[32]  The proclamation directs the U.S. military that 10 U.S.C. Section 12302 (the Ready Reserve provision) and 10 U.S.C. Section 2808 (the emergency military construction provision), are both in effect.[33]

Further, it is notable that this proclamation does not mandate the construction of a “border wall,” but rather “additional physical barriers” at the border.  During the first Trump administration, Congress passed a funding bill specifically to construct a 55-mile-long border wall;[34] no such legislation is currently in effect.

In the “Clarifying the Military’s Role” EO, President Trump ordered that, within 10 days of its effective date, the Secretary of Defense will assign U.S. Northern Command[35] “the mission to seal the borders and maintain the sovereignty, territorial integrity, and security of the United States by repelling forms of invasion including unlawful mass migration, narcotics trafficking, human smuggling and trafficking, and other criminal activities.”[36]  The EO further directs that several requirements be added to the Contingency Planning Guidance and Guidance for the Employment of the Force, including (1) a requirement to “seal the borders . . . by repelling forms of invasion, including unlawful mass migration”; (2) a requirement “to provide steady-state southern border security”; and (3) “[c]ontinuous assessments of all available options” to further the purpose of the order.[37]

Active-duty military had already been used in support functions at the border during previous administrations, including during the Biden administration,[38] but this executive order appears to contemplate expanding the military’s presence and role in border security in a way, and to a degree, not previously seen.  On January 22, the Department of Defense (DOD) announced a deployment of 1,500 troops to the southern border, in addition to the 2,500 troops already at the borders.[39]  DOD anticipates executing additional missions to the border, following an internal Customs and Border Protection announcement to dispatch around 10,000 troops.[40]  DOD also announced that it will provide airlift support for the deportation of over 5,000 individuals detained by CBP in California and Texas.[41]

During the first Trump administration, the Department of Justice’s (DOJ) Office of Legal Counsel (OLC) issued an opinion concluding that DHS’s request that DOD perform various duties to support Customs & Border Protection at the southern border was permitted.[42]  The OLC opinion found that several specific requests for DOD to support DHS efforts at the border[43] did not violate the Posse Comitatus Act, which “generally prohibits the use of the military to engage in civilian law enforcement activities,” or DOD regulations.[44]  It is unclear whether the OLC will sanction additional activities resulting from these new orders, which appear to be broader on their face than that at issue during the first Trump administration.

“Securing Our Borders”

The stated goal of the EO titled “Securing Our Borders”[45] is to “marshal all available resources and authorities to stop [an] unprecedented flood of illegal aliens into the United States.”  This EO provides less detailed operational guidance than others, and it includes some elements discussed elsewhere in this alert (and outlined in other overlapping orders)—notably directing the Secretary of Defense and the Secretary of Homeland Security to build “temporary and permanent physical barriers” on the border (though as noted above, not explicitly to build a “wall” along the entire border); and directing those secretaries to “deploy sufficient personnel along the southern border of the United States to ensure complete operational control.”[46]  The “Securing Our Borders” EO does include several additional directions.  It (1) commands the Secretary of Homeland Security to detain individuals violating immigration laws “to the fullest extent permitted by law,” including the prompt removal of aliens who enter or remain in the United States in violation of federal law and by terminating “the practice commonly known as ‘catch-and-release,’” where individuals in immigration detention may be released on bond as they await immigration court proceedings; (2) orders enforcement actions against those who are in the United States unlawfully and those who “facilitate their unlawful presence in the United States”;  and (3) requires migrants and asylum-seekers to “remain in Mexico” as they await adjudication of their cases.[47]

The latter of these steps was accomplished through rescinding a Biden-era EO and revamping the first Trump administration’s Migrant Protection Protocols (‘MPP’),[48] a program that went into effect in January 2019 and resulted in sending nearly 70,000 migrants back to Mexico in its first wave (creating massive logistical issues and exacerbating human rights violations and violence at the border).[49]  The reinstatement of MPP will again require border officials to instruct migrants seeking asylum to wait in Mexico for their hearings in immigration court.  MPP requires the cooperation of the government of Mexico; on January 22, Mexico’s president Claudia Sheinbaum stated that Mexico had not agreed to accept non-Mexican migrants.[50]  She clarified that Mexico was prepared to offer some forms of humanitarian aid to migrants of other nationalities as well as voluntary repatriation.

Finally, this EO includes a requirement of full cooperation with immigration enforcement – presumably including by companies and their representatives.  While it is presently unclear how and to what extent this EO will be implemented in the corporate sphere, it appears to open the door to require companies to participate in enforcement actions against noncitizens by the federal government.

“Guaranteeing the States Protection Against Invasion”

In this far-reaching proclamation, President Trump “determined that the current situation at the southern border qualifies as an invasion under Article IV, Section 4 of the Constitution” and “suspend[ed] the physical entry of aliens involved in an invasion into the United States across the southern border until I determine that the invasion has concluded.”[51]  This proclamation disallows migrants from “invoking provisions of the [Immigrant and Nationality Act] that would permit their continued presence in the United States.”[52]

President Trump grounds his authority for this proclamation in Article IV of the Constitution, which guarantees that the federal government will protect the States from “invasion,” and the president’s Article II power over foreign affairs (as well as section 212(f) of the Immigration and Nationality Act, which allows a president to “suspend the entry of all aliens or any class of aliens as immigrants or nonimmigrants, or impose on the entry of aliens any restrictions he may deem to be appropriate.”[53]  Thus, the combination of these powers, according to the proclamation, allows President Trump to declare that there is an active “invasion” against the states at the southern border, and gives him the “ability to prevent the physical entry of aliens involved in an invasion into the United States, and to rapidly repatriate them to an alternative location.”[54]

Notably, the President seems to recognize in the proclamation that many of the directives in this (and other) orders arguably conflict with the language of the INA, setting up a direct conflict between statutes and the President’s constitutional authority.  The President noted that Congress “created a complex and comprehensive Federal scheme” in the INA.  He argued that “[i]n routine circumstances, this complex and comprehensive scheme can protect the national sovereignty of the United States by facilitating the admission of individuals whose presence serves the a national interest and preventing the admission of those who do not,” but that “screening under those provisions can be wholly ineffective in the border environment” and “[t]he sheer number of aliens entering the United States has overwhelmed the system and rendered many of the INA’s provisions ineffective.”  While “[t]he INA provides the President with certain emergency tools,” the statute “does not, however, occupy the Federal Government’s field of authority to protect the sovereignty of the United States, particularly in times of emergency when entire provisions of the INA are rendered ineffective by operational constraints, such as when there is an ongoing invasion into the United States.”  These robust assertions of inherent constitutional authority to override provisions of statute are reminiscent of earlier debates about the scope of the President’s authority vis-à-vis Congress in foreign affairs and as Commander in Chief.[55]

President Trump previously relied on section 212(f) in his first term to ban travelers from seven predominantly Muslim countries from entering the United States—this faced numerous court challenges, but the Supreme Court ultimately upheld his ban.[56]  While he has not yet issued another “travel ban,” he has signed an EO requiring the “enhance[d] vetting and screening of illegal aliens.”[57]  It is possible that this could presage an upcoming travel ban for individuals from certain countries to be issued in the near future.

More broadly, this proclamation relies on sections 212(f) and 215(a) of the INA to require noncitizens who enter the country to provide sufficient and verifiable documentation of medical and criminal history “as to enable fulfillment of the requirements of sections 212(a)(1)-(3) of the INA” before being granted such permission.[58]  President Trump reasoned that “the Federal Government currently lacks an effective operational capacity to screen all illegal aliens crossing the southern border for communicable diseases of public-health concern” and “[a]s a result, innumerable aliens potentially carrying communicable diseases of public health significance illegally cross the southern border and enter communities across the United States.”[59]  Notwithstanding the rationale outlined in the preamble, however, the proclamation is not limited to noncitizens entering through the southern border and may therefore impose additional medical and criminal background check requirements on those entering the United States even on non-immigrant visas and via different ports of entry.  This may result in processing delays for noncitizen travel to the United States.

This provision may connect back to President Trump’s first term where he sought to limit entry and remove migrants under 42 U.S.C. §§ 265 and 268 (Title 42) during the COVID-19 pandemic.[60]  Relying on the rationale that crowded ports of entry could lead to the spread of COVID-19 and the entrance of migrants into the country could have exacerbated the pandemic, the Trump Administration recommended that Title 42 be invoked and enforced to disallow migrants from entering the country and remove those without legal status, suspending migrants’ right to seek asylum at this time.[61]  The decision to prohibit entry under Title 42 continued under President Biden[62]; under both administrations, it was criticized as both ineffective from a public health perspective and counterproductive from a border security perspective.[63] Nevertheless, this proclamation seeks to continue to appeal to public health concerns in deciding to impose additional burdens on those seeking to enter the United States.

Later on the same day he issued the EOs and proclamations, President Trump’s administration started the process of implementing these directives.  Within hours of his inauguration, for example, U.S. border authorities shut down the CBP One mobile application.[64]  CBP One is a Biden-era program that allowed migrants to submit advance information and schedule appointments to seek lawful entry into the United States, allowing them to assert claims for asylum or other forms of relief authorized under international and national law at designated ports of entry.[65]  Prior to June 2023, the program granted appointments to 1,000 migrants per day and, since then, 1,450 migrants were granted appointments daily.[66]  On January 20, 2025, however, a notice on the CBP website stated that the application is no longer available and that existing appointments made through the application have been cancelled.[67]  In practice, the shutdown of the CBP One system has effectively shut off asylum access at the southern border entirely, including for families who have been waiting for months for their chance to get to safety in the United States.

In response, the ACLU, which has been litigating a case since the Biden administration (Las Americas Immigrant Advocacy et al. v. U.S. Dep’t of Homeland Sec. et al.) moved for an emergency status conference to address the abrupt cancellation of the CBP One mobile application and program.[68]  The original suit challenged the Biden administration’s mandatory usage of the CBP One app to apply for asylum, alleging that it was violating 8 U.S.C. § 1158(a)(1) which provides any noncitizen who arrives in the United States the right to seek asylum, whether or not they enter through a designated point of entry.[69]  However, now with the complete elimination of the CBP One app and the suspension of entry through the border altogether, the ACLU argues in its motion for an emergency hearing that “the right to seek asylum at the border no longer exists, no matter how great the danger faced by migrants, including families with children.”[70]  It also argues that such a result is a further violation of 8 U.S.C. § 1158(a)(1) because now no one can seek asylum at the border, through the app or otherwise.

3. Detention and Removal of Noncitizens, and Other Enforcement Actions

“Protecting the American People Against Invasion”

Similar to other orders described in this alert, this order’s preamble recites claims of danger to native-born U.S. citizens by “criminal aliens” and of the ills of continued strain on government resources posed by noncitizens’ presence in the country.[71]  This sweeping order contains numerous provisions that will impact the logistical and legal frameworks for processing and evaluating migrants’ claims for immigration relief.  Certain of the key sections of this EO are outlined here:

• Section 2: This section includes a policy statement that immigration laws should be enforced against “all inadmissible and removable aliens, particularly those aliens who threaten the safety or security of the American people” and that “it is the policy of the United States to achieve the total and efficient enforcement of those laws.”[72]

• Section 4: This section calls on DHS to set enforcement priorities—presumably in recognition of the fact that the government lacks the resources to carry out the policies outlined in Section 2.[73]  In fact, the Supreme Court recognized in United States v. Texas (2023) that “the Executive Branch does not possess the resources necessary to arrest or remove all of the noncitizens covered by” arrest and removal statutes, and “[f]or the last 27 years . . . all five Presidential administrations have determined that resource constraints necessitated prioritization in making immigration arrests.”[74]

• Section 6: This section directs the Secretary of Homeland Security and the Attorney General to create Homeland Security Task Forces (HSTFs), comprised of representatives from various law enforcement agencies, in all States nationwide.[75]  The purpose of these task forces is to address crimes associated with immigration and execute immigration laws.  The announcement of these task forces follows models used in other areas by other agencies, and, as discussed further in Section II below, DOJ has instructed that FBI Joint Terrorism Task Forces will be used to fill this mandate until the HSTFs are established.[77]  Companies who employ noncitizens or individuals with temporary work authorization may want to consider preparing for enforcement actions by these task forces (such as workplace raids), including by establishing action plans, points of contact, and trainings for management-level employees.

• Sections 7 and 8: These sections impose requirements that certain noncitizens register their presence with the U.S. government or risk prioritized enforcement actions against them or the levying of fines and penalties.[78]  This is arguably analogous to the post-9/11 National Security Entry Exit Registration System program which, for many years, also required registration of certain people present in the United States, mostly those from Muslim and Arab-majority nations.[79]  That program was ended in 2016 following findings of its ineffectual nature and unlawful racial profiling.[80]  A registration requirement that applies to all noncitizens without regard to nationality may avoid such concerns.

• Section 9: This section requires the increased usage of expedited removal procedures whereby certain noncitizens are quickly removed from the country without ever seeing a judge or being permitted to raise claims for relief in a court.[81]  Before this EO, expedited removal was only available to individuals who crossed a land border if they were apprehended within 14 days of their arrival in the country within 100 miles of the border; now, this is available anywhere in the country against any undocumented individual who cannot prove they have been in the United States for at least two years before apprehension.[82]  On January 22, 2025, an immigrant advocacy group called Make the Road New York filed a lawsuit claiming that this expansion of expedited removal violates the Fifth Amendment’s Due Process Clause, the INA, and the Administrative Procedure Act.[83]

• Section 10: This section reflects the stated policy of the Trump administration that all migrants be detained pending resolution of their removal proceedings (although, as reflected elsewhere, this is currently an impossibility based on existing detention facility capacity).[84]

• Section 11: This section expands the use of the 287(g) program, named for the section of the INA that allows DHS to enter into written agreements with state or local law enforcement agencies to deputize selected law enforcement officers to perform functions of federal immigration agents.[85]  This program existed before the Trump administration; as of December 2024, ICE had 287(g) agreements with 135 state or local law enforcement agencies across 21 states, but we can expect those numbers to increase.[86]

• Section 16: Indirectly, this section calls for limiting grants of humanitarian parole, Temporary Protected Status (TPS), and employment authorization to existing statutory requirements.[87]  From context, this appears to be based on the assumption that the Biden administration did not comply with statutory requirements when granting these forms of relief to noncitizens.[88]  It is unclear how this will be specifically enforced in practice; however, it does signal the Trump administration’s general intent to restrict the usage of these mechanisms.

• Section 17: This section seems to broadly curtail the disbursement of all federal funds to so-called “sanctuary jurisdictions” (a nonlegal term generally referring to a policy that limits the extent to which a local or state government will share information with federal immigration law officers).[89]  During the first Trump administration, following a similar order, then-Attorney General Jeff Sessions narrowed the funds at issue to DOJ and DHS funds only, rather than all federal funds.[90]  It remains to be seen whether a similar narrowing will take place here.

• Section 19: In addition to the enforcement tactics directly targeted against immigrants in the United States, the order seeks to remove resources that support those individuals via ancillary resource curtailing.  For example, this section directs DHS and the Office of Management and Budget (OMB) to review/audit funding to non-government organizations supporting or providing services to noncitizens and pause distribution of further funds to those organizations until the review is complete.[91]

• Section 20: Relatedly, this section requires the OMB to take action to stop agencies from making public benefits available to noncitizens who are not authorized by statute to receive them.[92]

“Designating Cartels and Other Organizations as Foreign Terrorist Organizations and Specially Designated Global Terrorists”

This order declares a national emergency to deal with the “extraordinary threat to the national security, foreign policy, and economy of the United States” that drug cartels and other similar organizations pose.[93]  Although the order does not itself designate these organizations as terrorist organizations, it “creates a process” to designate cartels and other organized criminal organizations, such as Tren de Aragua and MS-13, as terrorist organizations.[94]  Foreign Terrorist Organization (FTO) status and Specially Designated Global Terrorist (SDGT) status have serious consequences.  Among other things, FTO and SDGT members are not admissible to the United States, persons subject to U.S. jurisdiction face criminal liability for knowingly providing FTOs “material support or resources,” and there are certain private rights of action against FTOs.[95]

The order does not specify the intended consequences of the terrorist designations in the immigration context, but such designations could present an obstacle for asylum-seekers and others who enter the United States through the southern border, as individuals often pay money to a cartel at some point in their journey to the United States, because cartels have cornered the migrant-smuggling market.  Anyone who pays a designated organization, even just to secure their own safe passage to the United States, may be found to have “engaged in terrorist activity” by providing “material support” (including money) to a “terrorist organization,” thereby making them inadmissible to the United States.[96]

“Restoring the Death Penalty and Protecting Public Safety”

This EO requires the Attorney General to “seek the death penalty regardless of other factors” for every federal capital crime involving a “capital crime committed by an alien illegally present in this country.”[97]  The Attorney General is also directed to take all necessary actions to encourage state attorneys general and district attorneys to pursue the death penalty with the same intensity.[98]

4. Refugee Admissions

“Realigning The United States Refugee Admissions Program”

The US Refugee Admissions Program (USRAP) is a program managed by the Department of State, Department of Homeland Security, and Department of Health and Human Services by which refugees registered with the United Nations High Commissioner for Refugees (UNHCR) are resettled in the United States.[99]  The number of refugees admitted each year through USRAP is decided by the President in consultation with Congress.[100]  In the 2024 fiscal year, around 100,000 refugees resettled in the United States, the most in nearly three decades.  A hallmark of the refugee admissions process is the extensive vetting that these individuals receive before being approved to relocate to the United States – they can enter the country only after receiving a referral from a government agency or U.S.-based NGO and passing serious security screenings.

EO’s purpose section states: “The United States lacks the ability to absorb large numbers of migrants, and in particular, refugees, into its communities in a manner that does not compromise the availability of resources for Americans, that protects their safety and security, and that ensures the appropriate assimilation of refugees.”[101]  The order therefore “direct[s] that entry into the United States of refugees under the [United States Refugee Admissions Program (USRAP)] be suspended” beginning at 12:01am EST on January 27, 2025.[102]  The order provides for very limited, small-scale exceptions, whereby “the Secretary of State and the Secretary of Homeland Security may jointly determine to admit aliens to the United States as refugees on a case-by-case basis, in their discretion, but only so long as they determine that the entry of such aliens as refugees is in the national interest and does not pose a threat to the security or welfare of the United States.”[103]  The order also requires the Secretary of Homeland Security to suspend decisions on applications for refugee status until the program is resumed.[104]

The EO also directs the Secretary of Homeland Security to “examine existing law to determine the extent to which, consistent with applicable law, state and local jurisdictions may have greater involvement in the process of determining the placement or resettlement of refugees in their jurisdictions, and shall devise a proposal to lawfully promote such involvement.”[105]  It also requires the Secretary of Homeland Security and the Secretary of State to, within 90 days of the order, “submit a report to the President through the Homeland Security Advisor regarding whether resumption of entry of refugees into the United States under the USRAP would be in the interests of the United States, in light of the policies outlined in section 2 of this order.”[106]  It further requires additional reports of the same nature “every 90 days thereafter until [President Trump] determine[s] that resumption of the USRAP is in the interests of the United States.”[107]

II. Agency Guidance

1. Department of Homeland Security

In the first week of the administration, President Trump’s Acting Department of Homeland Security Secretary Benjamine Huffman issued two notable directives.

The first rescinds the Biden-era Sensitive Locations Memorandum, a policy of that administration’s DHS instructing Immigrations and Customs Enforcement and Border Patrol agents to not arrest undocumented individuals at or near various sensitive locations where people access “essential services” or engage in “essential activities” – including schools, places of worship, healthcare facilities, shelters, and public demonstrations.[108]  The now-defunct policy was first adopted in 2011 and later expanded in 2021 by the Biden Administration.  Currently, organizations who operate or facilitate attendance at these sorts of locations (including schools and hospitals) should be prepared for the strong possibility of increased enforcement activity.  It is unclear whether an earlier version of sensitive location guidance will be reinstated or whether DHS will have free rein to engage in enforcement activity regardless of location.  Note that various state and local governments (including the so-called “sanctuary jurisdictions” mentioned above) may provide their own versions of sensitive location protection.

The other DHS directive implements one of the EO’s mandates to rescind categorical eligibility for humanitarian parole for nationals of certain countries, requiring case-by-case assessment for all humanitarian parole applications (which is already the case for the vast majority of those applications).[110]  The order specifically ends categorical parole for Cubans, Haitians, Nicaraguans, and Venezuelans.[111]  It is not clear whether parole will be revoked for current parolees.

2. Immigration and Customs Enforcement

The guidance supersedes a 2021 Biden Administration memorandum that limited immigration enforcement actions in or near courthouses, on the basis that such actions have “a chilling effect on individuals’ willingness to come to court or work cooperatively with law enforcement.”[113]  The new guidance authorizes enforcement actions in or near courthouses when agents “have credible information that leads them to believe the targeted alien(s) is or will be present at a specific location, and where such action is not precluded by laws imposed by the jurisdiction.” [114]  However, the guidance instructs that agents “should generally avoid enforcement actions in or near courthouses . . that are wholly dedicated to non-criminal procedures.”  Though ICE is meant to “target[]” individuals with these enforcement actions, they may sweep in “[o]ther aliens encountered . . . such as family members or friends accompanying the target alien to court appearances or serving as a witness in a proceeding.” [115]

3. Department of Justice

On January 21, 2025, Acting Deputy Attorney General Emil Bove sent a memorandum to all DOJ employees regarding interim policy changes impacting immigration enforcement.  Section II of this memorandum specifically references cooperation with state and local law enforcement in support of enforcing President Trump’s immigration priorities, including directing the Organized Crime Drug Enforcement Task Force and Project Safe Neighborhoods program to establish “national initiatives to provide focused resources and attention to immigration-related prosecutions at the federal, state, and local levels.”[116]  The memorandum additionally directs the FBI’s Joint Terrorism Task Force to coordinate with DHS and state and local law enforcement regarding President Trump’s immigration priorities until the announced Homeland Security Task Forces (addressed above) are in place.  This coordination will include the circulation of identifying information and biometric data in order to identify noncitizens present illegally in the U.S.[117]

Though the memorandum asserts that the “Supremacy Clause and other authorities require state and local actors to comply with” the President’s immigration orders and forbid obstructing them,[118] the ultimate impact of these directives will depend on the degree of cooperation states afford DOJ, as well as if and how DOJ pursues coercive action against uncooperative states.  Such actions may include criminal prosecution by the U.S. Attorney’s Offices and civil investigations by the Sanctuary Cities Enforcement Working Group within the DOJ’s Civil Division.  During President Trump’s first term, DOJ sent letters to jurisdictions with sanctuary city policies indicating that they may be in violation of 8 U.S.C. 1373, which bars states and localities from prohibiting the sharing of immigration status information with INS.[119]  If the new administration pursues coercive action, it may face legal challenges, given the Tenth Amendment anti-commandeering principle, to attempts to compel state and local governments to carry out federal law enforcement.[120]  In the first Trump Administration, the Department of Justice attempted to circumvent this limiting principle by barring sanctuary cities from its annual grant program for local law enforcement, with mixed results in the courts.[121]

III. The Laken Riley Act

Laken Riley Act would amend the INA to require mandatory detention of any undocumented individual who “is charged with, is arrested for, is convicted of, admits having committed, or admits committing acts which constitute the essential elements of” theft or related crimes, including burglary, larceny, or shoplifting.[123]  An amendment offered by Senator John Cornyn of Texas and approved in the Senate expanded this list to also include “assault of a law enforcement officer offense, or any crime that results in death or serious bodily injury to another person.”[124]  The bill also provides for state attorneys general to be able to sue the Secretary of Homeland Security for failure to enforce provisions of the INA related to the inspection, apprehension, and detention of immigrants.

The House passed the original version of the bill on January 7, 2025, and the Senate passed their version of the bill on January 21, 2025.[125][126]

The Act would require a massive expansion of resources at ICE.  The latest ICE estimate indicates that the agency would need 110,000 additional detention beds, 10,000 additional removal personnel, and 7,000 additional attorneys and support personnel for immigration proceedings.[127]  ICE estimates that the bill will cost approximately $27 billion in the first year.  Absent additional funding to meet these expanded resource needs, ICE has indicated it may have to release thousands of immigrants currently being detained, including some who have been deemed to be public safety threats.[128]

Various groups have raised due process concerns with the Act’s detention provisions and standing concerns with the Act’s state attorneys general provisions, suggesting that the Act may face legal challenges.[129]

IV. Texas v. United States

On Friday, January 17, 2025, the Fifth Circuit affirmed a 2023 district court ruling in Texas v. United States that held parts of the Biden Administration’s 2022 Deferred Action for Childhood Arrivals (DACA) rule are unlawful—but the Circuit’s order contains significant limitations that will allow DACA to continue in most of the country.[130]

The DACA policy was started by the Obama Administration with a 2012 memorandum.  The policy allows persons with generally good records and proof of educational attainment, attendance, or military service, to seek deferred action, a practice in which the government elects not to seek removal of certain individuals.[131]  The policy also permits participants to obtain work authorization.[132]  The first Trump Administration purported to rescind the policy, but in 2020, the Supreme Court held in Department of Homeland Security, et al. v. Regents of the University of California, et al. that the rescission was unlawful.[133]  Gibson Dunn represented six individual DACA recipients in obtaining and defending on appeal the first nationwide preliminary injunction halting the termination of DACA.  The late Gibson Dunn partner Ted Olson represented DACA recipients, businesses, and nonprofits challenging the policy in presenting oral argument before the Supreme Court.

In 2021, following the Regents decision, a Texas district court enjoined the DACA policy as operated through the 2012 DACA memorandum.[134]  In 2022, the Department of Homeland Security engaged in formal rulemaking and issued a Final Rule that continued the DACA policy,[135] and the Fifth Circuit ordered the Texas district court to revisit its ruling in light of the Final Rule.[136]  The district court again found the DACA policy substantively unlawful and enjoined the DACA policy nationwide.[137]

On appeal of the nationwide injunction, the Fifth Circuit affirmed that the Final Rule is substantively unlawful, but limited its ruling, allowing the DACA policy to remain in effect everywhere except Texas and preserving the “deferred action” component of the rule that allows federal officials to deem DACA recipients a low priority for removal and to decide not to remove them.[138]  The order also allows current DACA recipients (even in Texas) to renew their DACA status while the case remains on appeal, in anticipation of a potential petition for certiorari that could bring the DACA policy back before the Supreme Court.[139]

In parallel with the Texas lawsuit, in May 2024, the Biden Administration issued a separate final rule that for the first time permits DACA recipients to purchase healthcare plans through Affordable Care Act (ACA) exchanges.[140]  DACA recipients had previously been barred from accessing those exchanges as a result of regulations promulgated when the DACA policy was first adopted.[141]  Seventeen states challenged the regulation in the District of North Dakota, and Gibson Dunn has moved to intervene on behalf of DACA recipients, to defend the rule.[142]  In December, the district court granted a preliminary injunction and stay of the rule that continues to block DACA recipients in the nineteen states challenging the regulation from accessing the ACA exchanges.[143]  The rule remains in effect in the remaining thirty one states.  An appeal from the preliminary injunction and stay is currently pending before the Eighth Circuit Court of Appeals.

[1] “Seal the border and stop the migrant invasion” and “Carry out the largest deportation operation in American history” were the first and second of President Trump’s “20 Core Promises to Make America Great Again.”  See Agenda 47, DonaldJTrump.com (last accessed Jan. 21, 2025), available at https://www.donaldjtrump.com/platform.  And “Make America Safe Again” along with seven action items related to immigration and border security, is the first of four priorities listed on the White House website.  See The Trump-Vance Administration Priorities, White House (last accessed Jan. 21, 2025), available at https://www.whitehouse.gov/issues/.

[2] Lexie Schapitl & Franco Ordoñez, Trump Signs Executive Actions on Jan. 6, TikTok, Immigration and More, NPR (Jan. 20, 2025), https://www.npr.org/2025/01/20/g-s1-43698/trump-inauguration-executive-orders-2025-day-1; see also Initial Rescissions of Harmful Executive Orders and Actions, White House (Jan. 20, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/01/initial-rescissions-of-harmful-executive-orders-and-actions/.

[3] https://www.whitehouse.gov/presidential-actions/2025/01/protecting-the-meaning-and-value-of-american-citizenship/

[4] Id.

[5] Id.

[6] Complaint at 78, State of New Jersey et al. v. Donald J. Trump, No. 1:25-cv-10139 (D. Mass. filed Jan. 21, 2025).

[7] Citizenship Clause, U.S. Const. amend. XIV § 1.

[8] 169 U.S. 649 (1898).

[9] Id.

[10] Complaint at 84, State of New Jersey et al. v. Donald J. Trump, No. 1:25-cv-10139 (D. Mass. filed Jan. 21, 2025).

[11] H.R. 1940, § 2(b); Sandra L. Rierson, From Dred Scott to Anchor Babies: White Supremacy and the Contemporary Assault on Birthright Citizenship, 38 Georgetown Imm. L. J. 1, 46 (2023).

[12] U.S. v. Abbot, (W.D. Tex., 2024) (Ho, J., concurring),.

[13] See, e.g., John C. Eastman, Born In The U.S.A.? Rethinking Birthright Citizenship In The Wake Of 9/11, 42 Univ. Richmond L.R. 955, 964 (2008).

[14] Id.

[15] Id. at 1.

[16] The eighteen states include the following: New Jersey, Massachusetts, California, Colorado, Connecticut, Delaware, Hawai’i, Maine, Maryland, Michigan, Minnesota, Nevada, New Mexico, New York, North Carolina, Rhode Island, Vermont, Wisconsin, as well as Washington, D.C. and the City and County of San Francisco.  Complaint, State of New Jersey et al. v. Donald J. Trump, No. 1:25-cv-10139 (D. Mass. filed Jan. 21, 2025).

[17] Id. at 78-94.

[18] Id. at 95-105.

[19] These four states include Washington, Arizona, Illinois and Oregon. Complaint, State of Washington et al. v. Donald J. Trump, No. 2:25-cv-00127 (W.D. Wash. filed Jan. 21, 2025).

[20] Id. at 3

[21] See e.g., Complaint, Casa, Inc. et al., v. Donald J. Trump, No. 8:25 (D. Md. filed Jan. 21, 2025).

[22] Order, State of Washington et al. v. Donald J. Trump, No. 2:25-cv-00127 (W.D. Wash. filed Jan. 21, 2025).

[23] Securing Our Borders, White House (Jan. 20, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/01/securing-our-borders/

[24] Restoring the Death Penalty and Protecting Public Safety, White House (Jan. 20, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/01/restoring-the-death-penalty-and-protecting-public-safety/

[25] Donald J. Trump, The Inaugural Address (Jan. 20, 2025), available at https://www.whitehouse.gov/remarks/2025/01/the-inaugural-address/.

[26] Id.

[27] Proclamation, “Declaring A National Emergency at the Southern Border of the United States” (Jan. 20, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/01/declaring-a-national-emergency-at-the-southern-border-of-the-united-states/.

[28] Id.

[29] Proclamation No. 9844, 84 Fed. Reg. 4949 (Feb. 15, 2019).

[30] Border Wall Emergency Declaration Litigation, Brennan Ctr. (Oct. 16, 2020), available at https://www.brennancenter.org/our-work/court-cases/border-wall-emergency-declaration-litigation (collecting cases).

[31] John Gramlich, Migrant encounters at U.S.-Mexico border have fallen sharply in 2024, Pew Rsch. Ctr. (Oct. 1, 2024), available at https://www.pewresearch.org/short-reads/2024/10/01/migrant-encounters-at-u-s-mexico-border-have-fallen-sharply-in-2024/.

[32] Proclamation, “Declaring A National Emergency at the Southern Border of the United States” (Jan. 20, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/01/declaring-a-national-emergency-at-the-southern-border-of-the-united-states/.

[33] Id.

[34] H.R.J. Res. 31, 116th Cong. (Feb. 15, 2019).

[35] The U.S. Northern Command is responsible for “provid[ing] command and control of Department of Defense homeland defense efforts and to coordinate defense support of civil authorities.”  Our Story, U.S. N. Command, available at https://www.northcom.mil/About/ (last visited Jan. 24, 2025).

[36] Exec. Or., “Clarifying the Military’s Role in Protecting the Territorial Integrity of the United States” (Jan. 20, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/01/clarifying-the-militarys-role-in-protecting-the-territorial-integrity-of-the-united-states/

[37] Id.

[38] Fact Sheet: The Biden-Harris Administration Takes New Actions to Increase Border Enforcement and Accelerate Processing for Work Authorizations, While Continuing to Call on Congress to Act, Dep’t of Homeland Sec. (Sept. 20, 2023), available at https://www.dhs.gov/archive/news/2023/09/20/fact-sheet-biden-harris-administration-takes-new-actions-increase-border (“The Department of Defense is providing additional military personnel – on top of the 2,500 steady state National Guard personnel – to support the Department of Homeland Security (DHS).”).

[39] Matthew Olay, DOD Orders 1,500 Troops, Additional Assets to Southern Border, Dep’t of Def. (Jan. 22, 2025), available at https://www.defense.gov/News/News-Stories/Article/Article/4037935/dod-orders-1500-troops-additional-assets-to-southern-border/.

[40] Camilo Montoya-Galvez, Trump administration weighs sending 10,000 troops to border, using bases to hold migrants, CBS News (Jan. 22, 2025), https://www.cbsnews.com/news/trump-troops-us-mexico-border/

[41] Id.; Olay, supra note 38.

[42] Military Support for Customs and Border Protection Along the Southern Border Under the Posse Comitatus Act, 45 Op. O.L.C. 1–3, 13 (2021) (slip op.).

[43] Id. at 2 (“[T]he rail-support duty would have military personnel assist CBP personnel responsible for inspecting unoccupied, unlocked vehicles being transported across the southern border in bulk on rail cars. The seal-check duty would involve visually verifying whether commercial cargo trucks and containers have intact and unbroken seal tags, which CBP requires for trucks and containers passing through ports of entry. The port-of-entry and checkpoint observers would monitor the output of CBP’s electronic systems that automatically collect and process data, such as license-plate information, about individuals and vehicles passing through a port of entry or U.S. Border Patrol checkpoint, and display an alert message if the system identifies a concern.”).

[44] Id. at 2–3.

[45] Securing Our Borders, White House (Jan. 20, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/01/securing-our-borders.

[46] Id.

[47] Id.

[48] Initial Rescissions of Harmful Executive Orders and Actions, White House (Jan. 20, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/01/initial-rescissions-of-harmful-executive-orders-and-actions.

[49] Trump revives ‘remain in Mexico’ policy as part of anti-immigration crackdown, Guardian (Jan. 21, 2025), https://www.theguardian.com/us-news/2025/jan/21/trump-remain-in-mexico-program.

[50] Mexico has not agreed to accept non-Mexican US asylum seekers, says president, Reuters (Jan. 22, 2024), https://www.reuters.com/world/americas/mexico-has-not-agreed-accept-non-mexican-us-asylum-seekers-says-president-2025-01-22.

[51] Guaranteeing the States Protection Against Invasion, White House (Jan. 20, 2025), https://www.whitehouse.gov/presidential-actions/2025/01/guaranteeing-the-states-protection-against-invasion

[52] Id.

[53] Id.; 8 U.S.C. § 1182(f).

[54] Id.

[55] See, e.g., Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 635, 644 (1952) (Jackson, J., concurring) (“Presidential powers are not fixed but fluctuate, depending upon their disjunction or conjunction with those of Congress… That military powers of the Commander-in-Chief were not to supersede representative government of internal affairs seems obvious from the Constitution and from elementary American history.”); Zivotofsky ex rel. Zivotofsky v. Kerry, 576 U.S. 1, 17 (2015) (“…. Congress has an important role in other aspects of foreign policy, and the President may be bound by any number of laws Congress enacts. In this way ambition counters ambition, ensuring that the democratic will of the people is observed and respected in foreign affairs as in the domestic realm”).

[56] Trump v. Hawaii, 585 U.S. 667, 683–84 (2018).

[57] Protecting the United States from Foreign Terrorists and Other National Security and Public Safety Threats, White House (Jan. 20, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/01/protecting-the-united-states-from-foreign-terrorists-and-othernational-security-and-public-safety-threats/

[58] Guaranteeing the States Protection Against Invasion, White House (Jan. 20, 2025), available: https://www.whitehouse.gov/presidential-actions/2025/01/guaranteeing-the-states-protection-against-invasion/

[59] Id.

[60] Remarks by President Trump, Vice President Pence, and Members of the Coronavirus Task Force in Press Briefing, The Trump White House Archives (Mar. 20, 2020), available at https://trumpwhitehouse.archives.gov/briefings-statements/remarks-president-trump-vice-president-pence-members-c-oronavirus-task-force-press-briefing/; Order Suspending Introduction of Certain Persons from Countries Where a Communicable Disease Exists, Ctr. Disease Control (Mar. 20, 2020), https://immpolicytracking.org/policies/covid-19-cdc-order-authorizes-border-patrol-expulsion-of-all-persons-arriving-by-land-from-mexico-or-canada-without-valid-documents-under-42-usc-265-public-health-act/#/tab-policy-documents.

[61] 85 Fed. Reg. 59, 17060 (Mar. 26, 2020).

[62] 86 Fed. Reg. 148, 42828 (Aug. 5, 2021); see also 86 C.F.R. § 9942 (2021).

[63] Michael Ulrich & Sondra Crosby, Title 42, asylum, and politicizing public health, 7 Lancet Reg. Health Am. 1 (March 2022); Public Health and Former CDC Experts Warn Against Renewed Misuse of Title 42 Public Health Authority, Physicians for Human Rights (Jan. 17, 2025), available at https://phr.org/news/public-health-and-former-cdc-experts-warn-against-renewed-misuse-of-title-42-public-health-authority/.

[64] CBP One Mobile Application, U.S. Cust. & B. Protection (Jan. 20, 2025), https://www.cbp.gov/about/mobile-apps-directory/cbpone.

[65] Id.

[66] Press Release, CBP One™ Appointments Increased to 1,450 Per Day, U.S. Cust. & B. Protection (June 30, 2023), https://www.cbp.gov/newsroom/national-media-release/cbp-one-appointments-increased-1450-day.

[67] CBP One Mobile Application, U.S. Cust. & B. Protection (Jan. 20, 2025), https://www.cbp.gov/about/mobile-apps-directory/cbpone; Rebecca Santana, Elliot Spagat & Gisela Salomon, Trump seeks to remake border security but his efforts will face challenges, Associated Press (Jan. 20, 2025, 6:44 PM), https://apnews.com/article/trump-deportation-immigration-homan-asylum-inauguration-ac10480dc636b758ab3c435b974aeb19.

[68] Motion for Emergency Status Conference and for Leave to File Supplemental Briefing in Light of President Trump’s January 20 Action Ending CBP One, Las Americas Immigrant Advocacy et al. v. U.S. Dep’t of Homeland Sec. et al., No. 1:24-cv-01702-RC (Jan. 20, 2025), https://www.aclu.org/cases/las-americas-immigrant-advocacy-center-v-u-s-department-of-homeland-security?document=Motion-for-Emergency-Status-Conference

[69] Complaint, Las Americas Immigrant Advocacy et al. v. U.S. Dep’t of Homeland Sec. et al., No. 1:24-cv-01702-RC (June 12, 2024), https://www.aclu.org/cases/las-americas-immigrant-advocacy-center-v-u-s-department-of-homeland-security?document=Complaint

[70] See Motion for Emergency Status Conference and for Leave to File Supplemental Briefing in Light of President Trump’s January 20 Action Ending CBP One at 2, Las Americas Immigrant Advocacy et al. v. U.S. Dep’t of Homeland Sec. et al., No. 1:24-cv-01702-RC (Jan. 20, 2025).

[71] Protecting the American People Against Invasion, White House (Jan. 20, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/01/protecting-the-american-people-against-invasion/.

[72] Id.

[73] Id.

[74] United States v. Texas, 599 U.S. 670, 680 (2023).

[75] Protecting the American People Against Invasion, White House (Jan. 20, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/01/protecting-the-american-people-against-invasion/.

[76] Id.

[77] Josh Gerstein and Dasha Burns, Trump DOJ Gears Up for Immigration Enforcement, Politico (Jan. 22, 2025), available at https://www.politico.com/news/2025/01/22/donald-trump-justice-department-immigration-005783.

[78] Protecting the American People Against Invasion, White House (Jan. 20, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/01/protecting-the-american-people-against-invasion/.

[79] Removal of Regulations Relating to Special Registration for Certain Nonimmigrants, 81 Fed. Reg. 94231 (Dec. 23, 2016), available at https://www.federalregister.gov/documents/2016/12/23/2016-30885/removal-of-regulations-relating-to-special-registration-process-for-certain-nonimmigrants.

[80] Id.; see also Christ Rickerd, Homeland Security Suspends Ineffective, Discriminatory Immigration Program, ACLU (May 6, 2011), available at https://www.aclu.org/news/immigrants-rights/homeland-security-suspends-ineffective-discriminatory-immigration-program.

[81] Protecting the American People Against Invasion, White House (Jan. 20, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/01/protecting-the-american-people-against-invasion/; see also 8 U.S.C. § 1225(b)(1)(A).

[82] Designating Aliens for Expedited Removal, 90 Fed. Reg. 8139 (Jan. 24, 2025), available at https://www.federalregister.gov/documents/2025/01/24/2025-01720/designating-aliens-for-expedited-removal#:~:text=SUMMARY%3A,fullest%20extent%20authorized%20by%20Congress.

[83] Make the Road New York v. Huffman et al., D.D.C. No. 1:25-cv-00190 (Jan. 22, 2025).

[84] Protecting the American People Against Invasion, White House (Jan. 20, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/01/protecting-the-american-people-against-invasion/.

[85] Id.

[86] The 287(g) Program: An Overview, American Immigration Council (Jan. 20, 2025), available at https://www.americanimmigrationcouncil.org/research/287g-program-immigration.

[87] Protecting the American People Against Invasion, White House (Jan. 20, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/01/protecting-the-american-people-against-invasion/.

[88] Id.

[89] Id.

[90] Implementation of Executive Order 13768, “Enhancing Public Safety in the Interior of the United States,” Office of the Attorney General (May 22, 2017), available at https://www.justice.gov/opa/press-release/file/968146/dl?inline=.

[91] Protecting the American People Against Invasion, White House (Jan. 20, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/01/protecting-the-american-people-against-invasion/.

[92] Id.

[93] Designating Cartels and Other Organizations as Foreign Terrorist Organizations and Specially Designated Global Terrorists, White House (Jan. 20, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/01/designating-cartels-and-other-organizations-as-foreign-terrorist-organizations-and-specially-designated-global-terrorists/.  

[94] Id.

[95] See, e.g., Robbie Gamer & Jack Detsch, So You Want to Sanction a Terrorist Group, Foreign Policy: Situation Report (Jan. 18, 2024).

[96] See 8 U.S.C. Section 1182(a)(3)(B).

[97] Restoring the Death Penalty and Protecting Public Safety, White House (Jan. 20, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/01/restoring-the-death-penalty-and-protecting-public-safety/.

[98] Id.

[99] Refugee Admissions, U.S. Department of State 2021-2025 Archived Content (last accessed Jan. 22, 2025), available at https://2021-2025.state.gov/refugee-admissions/.

[100] Id.

[101] Realigning the United States Refugee Admissions Program, White House (Jan. 20, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/01/realigning-the-united-states-refugee-admissions-program/.  

[102] Id.

[103] Id.

[104] Id.

[105] Id.

[106] Section 2 of the order reads: “It is the policy of the United States to ensure that public safety and national security are paramount considerations in the administration of the USRAP, and to admit only those refugees who can fully and appropriately assimilate into the United States and to ensure that the United States preserves taxpayer resources for its citizens.  It is also the policy of the United States that, to the extent permitted by law and as practicable, State and local jurisdictions be granted a role in the process of determining the placement or settlement in their jurisdictions of aliens eligible to be admitted to the United States as refugees.”

[107] Id.

[108] Statement from a DHS Spokesperson on Directives Expanding Law Enforcement and Ending the Abuse of Humanitarian Parole, U.S. Dep’t of Homeland Sec. (Jan. 21, 2025), available at https://www.dhs.gov/news/2025/01/21/statement-dhs-spokesperson-directives-expanding-law-enforcement-and-ending-abuse.

[109] John Morton, Enforcement Actions at or Focused on Sensitive Locations, U.S. Dep’t of Homeland Sec. (Oct. 24, 2011), available at https://www.ice.gov/doclib/ero-outreach/pdf/10029.2-policy.pdf; Alejandro N. Mayorkas, Guidelines for Enforcement Actions in or Near Protected Areas, U.S. Dep’t of Homeland Sec. (Oct. 27, 2021), available at https://www.dhs.gov/sites/default/files/publications/21_1027_opa_guidelines-enforcement-actions-in-near-protected-areas.pdf.

[110] Securing Our Borders, White House (Jan. 20, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/01/securing-our-borders/.

[111] Id.

[112] Caleb Vitello, Interim Guidance: Civil Immigration Enforcement Actions in or near Courthouses, U.S. Immigr. & Customs Enf’t (Jan. 21, 2025), accessible at https://www.ice.gov/doclib/foia/policy/11072.3_CivilImmEnfActionsCourthouses_01.21.2025.pdf)

[113] DHS Announces New Guidance to Limit ICE and CBP Civil Enforcement Actions in or Near Courthouse, Dep’t of Homeland Sec. (Apr. 27, 2021), accessible at https://www.dhs.gov/archive/news/2021/04/27/dhs-announces-new-guidance-limit-ice-and-cbp-civil-enforcement-actions-or-near)

[114] Caleb Vitello, Interim Guidance: Civil Immigration Enforcement Actions in or near Courthouses, U.S. Immigr. & Customs Enf’t (Jan. 21, 2025), accessible at https://www.ice.gov/doclib/foia/policy/11072.3_CivilImmEnfActionsCourthouses_01.21.2025.pdf)

[115] Id.

[116] Emil Bove, Interim Policy Changes Regarding Charging, Sentencing, and Immigration Enforcement, U.S. Dep’t of Just. (Jan. 21, 2025), available at https://www.documentcloud.org/documents/25501154-doj-all-staff-memo-jan-21/.

[117] Id.

[118] Id.

[119] Justice Department Sends Letters to 29 Jurisdictions Regarding Their Compliance with 8 U.S.C. 1373, U.S. Dep’t of Just. (Nov. 15, 2017), available at https://www.justice.gov/opa/pr/justice-department-sends-letters-29-jurisdictions-regarding-their-compliance-8-usc-1373.

[120] See, e.g., Printz v. United States, 521 U.S. 898 (1997) (federal government could not require states to implement/operationalize federal background check requirement for handgun purchases); New York v. United States, 505 U.S. 144 (1992) (federal government could not require states to either take control of radioactive waste or enact legislation to deal with it).

[121] Compare City of Chicago v. Barr, 961 F.3d 882 (7th Cir. 2020) (striking down such conditions) with State v. Dep’t of Just., 951 F.3d 84 (2d Cir. 2020) (upholding them).

[122] Detention Management, U.S. Immigr. & Customs Enf’t, available at https://www.ice.gov/detain/detention-management.

[123] Laken Riley Act, S. 5, 119th Cong. (2025).

[124] S. Amdt. 8 to Laken Riley Act, S. 5, 119th Cong. (2025).

[126] Erin Doherty, House passes Laken Riley Act, sending bill to Trump’s desk, Axios (Jan. 22, 2025), available at https://www.axios.com/2025/01/22/house-laken-riley-act-congress-trump.

[127] Ximena Bustillo, ICE estimates it would need $26.9 billion to enforce GOP deportation bill, NPR (Jan. 16, 2025), available at https://www.npr.org/2025/01/16/nx-s1-5262921/laken-riley-act-deportation-ice.

[129] See Vote NO on S. 5, the Lake Riley Act, ACLU (Jan. 9, 2025), available at https://www.aclu.org/documents/aclu-letter-to-senators-urging-no-vote-on-s-5-the-laken-riley-act; Patrick Gaspard, The Senate Must Fix the Laken Riley Act Before Voting on It, Ctr. Am. Progress (Jan. 15, 2025), available at https://www.americanprogress.org/article/the-senate-must-fix-the-laken-riley-act-before-voting-on-it/.

[130] Texas v. United States, 2025 WL 227244, at *15 (5th Cir. Jan. 17, 2025).

[131] Memorandum from Janet Napolitano, Sec’y, DHS, to David Aguilar, Acting Comm’r, U.S. Customs and Border Prot., et al. (June 15, 2012), https://www.dhs.gov/xlibrary/assets/s1-exercising-prosecutorial-discretion-individuals-who-came-to-us-as-children.pdf.

[132] Id.

[133] DHS v. Regents of the Univ. of Cal., 591 U.S. 1, 35-36 (2020).

[134] Texas v. United States, 549 F. Supp. 3d 572, 624 (S.D. Tex. 2021)

[135] Deferred Action for Childhood Arrivals, 87 Fed. Reg. 53,152 (Aug. 30, 2022) (to be codified at 8 C.F.R. pts 106, 236, and 274a).

[136] Texas v. United States, 50 F.4th 498, 508 (5th Cir. 2022).

[137] Texas v. United States, 691 F. Supp 3d 763, 796 (S.D. Tex. 2023).

[138] Texas v. United States, 2025 WL 227244, at *15 (5th Cir. Jan. 17, 2025).

[139] Id. at *19.

[140] Clarifying the Eligibility of Deferred Action for Childhood Arrivals and Certain Other Noncitizens for a Qualified Health Program through an Exchange, Advance Payments of the Premium Tax Credit, Cost-Sharing Reductions, and a Basic Health Program, 89 Fed. Reg. 39392, 39395 (May 8, 2024).

[141] See id. at 39394.

[142] Motion to Intervene, Kansas v. United States, No. 24-150 (D.N.D. Sept. 20, 2024), ECF No. 49.

[143] See Kansas v. United States, 2024 WL 5220178, at *10 (D.N.D. Dec. 9, 2024).

The following Gibson Dunn lawyers prepared this update: Stuart Delery, Matt Rozen, Ariana Sañudo, Laura Raposo, Patty Herold, Carolyn Ye, Arthur Halliday, Zach Goldstein, Kayla Jahangiri, Heather Skrabak, Cydney Swain, Matt Weiner, and George Khoury.

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, the authors, any leader or member of the firm’s Pro Bono, Public Policy, Administrative Law & Regulatory, Appellate & Constitutional Law, or Labor & Employment practice groups, or the following:

Stuart F. Delery – Co-Chair, Administrative Law & Regulatory Practice Group,
Washington, D.C. (+1 202.955.8515, sdelery@gibsondunn.com)

Naima L. Farrell – Partner, Labor & Employment Practice Group,
Washington, D.C. (+1 202.887.3559, nfarrell@gibsondunn.com)

Nancy Hart – Partner, Litigation Practice Group,
New York (+1 212.351.3897, nhart@gibsondunn.com)

Katie Marquart – Partner & Chair, Pro Bono Practice Group,
Los Angeles (+1 213.229.7475, kmarquart@gibsondunn.com)

Laura Raposo – Associate General Counsel, Gibson Dunn,
New York (+1 212.351.5341, lraposo@gibsondunn.com)

Matthew S. Rozen – Partner, Appellate & Constitutional Law Practice Group,
Washington, D.C. (+1 202.887.3596, mrozen@gibsondunn.com)

Ariana Sañudo – Associate, Pro Bono Practice Group,
Los Angeles (+1 213.229.7137, asanudo@gibsondunn.com)

Betty X. Yang – Partner & Co-Chair, Trials Practice Group,
Dallas (+1 214.698.3226, byang@gibsondunn.com)

© 2025 Gibson, Dunn & Crutcher LLP.  All rights reserved.  For contact and other information, please visit us at www.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.

After months of speculation regarding the possible contours of the United States’ international trade policies under a second Trump administration, the President’s unprecedented flurry of initial executive actions was light on actual, immediate changes to U.S. trade policy.

As detailed below, with few exceptions, the actions have essentially set the stage for (and in some cases set up the legal structure for) future moves without yet implementing policy changes.

Five Key Themes

Despite the absence of formal policy changes, taken as a whole, the executive actions (which include policy memoranda, scores of legally binding executive orders (E.O.s), as well as press and formal statements) set out some broad themes that will likely guide President Trump and his administration as he pursues his trade agenda.  While many of these themes were present in his first term (and others echo former presidents, including the early twentieth century’s William McKinley), the actions taken so far indicate that his second term team is more sophisticated, knowledgeable of the federal bureaucracy, and capable of acting on these themes quickly and sustainably than was the team in place during the previous Trump administration.

First, as he indicated during the campaign, President Trump continues to see trade as a “zero sum game,” turning away from decades of broad bipartisan recognition of the benefits to the United States of free trade governed by U.S legislation and trade agreements intended to protect U.S. interests from unfair trade practices.  By focusing on the trade deficit as an irrefutable indication of American weakness (and foreign powers’ strength) and making broad statements to business elite that if they do not develop manufacturing in the United States they will face tariffs and other consequences, the Trump team has indicated little desire to find a middle ground on trade issues.  President Trump’s broader distrust of the multilateral trading system suggests the United States’ block against the World Trade Organization’s Appellate Body – which has been in place since Trump’s first term and has left the WTO essentially rudderless – is unlikely to be resolved in the near future.  Indeed, the President has asked for a review of all existing U.S. trade agreements, including the World Trade Organization Agreement on Government Procurement.

Second, the President will leverage trade for other policy goals far removed from trade.  While U.S. legislation has always made this the case with sanctions and export controls (which have clear national security goals often unrelated to trade), the Trump team has indicated a willingness to threaten countries with trade-related consequences if they do not invest in border security (Canada), increase defense spending (NATO states), comply with his immigration policies (Mexico and Colombia), and to potentially extract other geopolitical concessions (such as those involving Denmark/Greenland and Panama).  While this novel use of trade measures was apparent in his first term, President Trump now seems set to move even more forcefully and broadly in this regard during his second administration.

Third, the President appears to be gearing up for aggressive trade enforcement to make up for what he deems insufficient trade enforcement by the Biden administration.  His use of the pejorative description of “loopholes“ in describing current export controls provisions and his direction to his Executive branch to address such shortcomings indicates a potentially uniquely muscular approach that his trade-related senior staff – including Trade and Manufacturing Senior Counselor Peter Navarro, Commerce Secretary-nominee Howard Ludnick, Treasury Secretary-nominee Scott Bessent, and U.S. Trade Representative-nominee Jamieson Greer – have supported in their public statements and testimony. The President has also indicated that his administration will pursue very aggressive efforts in applying the antidumping and countervailing duty statutes, the most broadly applied U.S. “unfair trade” provisions.

Fourth, and related to aggressive enforcement, in many trade-related statements, the administration has spoken of a goal of expanding how the United States should “encourage” third country compliance with U.S. trade controls (such as export controls and sanctions).  This suggests a return to a key feature of President Trump’s first term – the use of unilateral trade measures directed against allies and competitors alike – and an imminent expansion of the United States’ extraterritorial trade enforcement.  Extraterritorial trade measures have always been both a critical force multiplier in furthering U.S. policy (such as secondary sanctions) while simultaneously being a source of increasing friction between the United States and other countries.  Unlike in the President’s first term, potential target countries have been preparing – in some cases for more than a year – to respond to these efforts and potentially institute retaliatory measures.  However, as in his first term, President Trump appears as yet unconcerned about any reprisals.

Fifth, President Trump appears set on using essentially unchecked executive authorities to pursue most of his trade agenda rather than rely on or wait for legislation.  In his first term President Trump primarily relied on a mix of existing statutory authorities that allowed limited congressional oversight (such as using legislation undergirding U.S. sanctions to quickly impose tariffs) alongside more traditional tools (such as the longstanding Section 301 and 232 trade statutes which require often lengthy investigations prior to the imposition of tariffs).  In this second Trump administration, however, it appears that the administration will rely more heavily on executive tools.  Given the Republican control of Congress, President Trump may not receive significant initial congressional pushback regarding any concerns that he may be overstepping his authority.  However, this approach is highly likely to result in immediate litigation that could result in judicially imposed limitations on these authorities (as aggrieved parties seek redress in the courts) and may well prompt congressional efforts to amend these authorities if the Republicans lose one or both houses of Congress in the 2026 midterm elections.

Top Takeaways from the “Week One” Executive Trade Actions

Please refer to Gibson Dunn’s “Executive Order Tracker” for a complete and current listing of all the E.O.s issued by the Trump White House in the initial days of his second term, as well as Gibson Dunn’s Regulatory Outlook for International Trade Following the 2024 Election which details the firm’s broader post-election assessment of where Trump trade policy might be headed.

The list below contains a short description and categorization of executive trade actions as well as links to more in-depth analyses Gibson Dunn has undertaken on several individual executive actions.

I. Tariffs (and More): Not Yet Announced, But Major Changes Are Likely Given the Broad Trade Review Ordered

Possible U.S. tariffs have been a core issue as a second Trump Presidency loomed.  Despite candidate Trump’s indications that tariffs would be a “day one” event, as of the publication date of this alert there has been no change to U.S. tariffs.  However, we note that this situation could change at any time, and President Trump has continued to threaten potential tariffs against China, the EU, Canada, Mexico, Colombia and others, indicating he may seek to impose (or at least announce) some tariffs as early as February 1, 2025.

Through week one, however, Trump’s main tariff-related measures were contained in his “America First Trade Policy” memorandum issued on January 20, 2025, in which he directed parts of the Executive branch, including the Departments of State, Treasury, Commerce and Defense, the U.S. Trade Representative, and various other offices and agencies, to review numerous aspects of the U.S. trade landscape for economic, national security and others risks, and by April 1, 2025, to report back with any findings and recommendations for remedial action.  The Policy notes that such proposals could include tariffs but also a host of other possible approaches.  Importantly this memorandum contains no legally binding changes to trade policy.

The memorandum is very broad, but key sections of the memorandum require investigations of many trade-related issues, including the following:

• The “causes of our country’s large United States annual trade deficit,” and (ominously) a recommendation of “appropriate measures, such as a global supplemental tariff”;
• Foreign unfair trade practices and currency manipulation;
• All existing U.S. trade agreements (including the United States-Mexico-Canada Agreement (USMCA)), as well as views on opportunities for new bilateral trade agreements;
• A deep dive on various aspects of the economic and trade relationship with China;
• Unlawful migration and fentanyl flows from Canada, Mexico, and the PRC;
• A “full economic and security review of the United States’ industrial and manufacturing base”;
• The U.S. import treatment of steel and aluminum;
• The feasibility of and recommendations for implementing an “External Revenue Service (ERS) to collect tariffs, duties, and other foreign trade-related revenues”; and
• The policies and regulations concerning the application of antidumping and countervailing duty (AD/CVD) laws.

In addition, the memorandum also calls for a wholesale reassessment of other major trade regulatory programs such as U.S. export controls, the rules covering U.S. outbound investment into China, and the recently announced rules regarding imports of “connected vehicles.”

II. Rescissions and Rule Moratorium

President Trump rescinded more than 70 E.O.s issued by previous administrations – including some that had been in place for decades.  He also declared a moratorium, pending further review by his appointees, on the issuance, proposal, or publication of any new regulatory rules.  Finally, he directed agencies to consider postponing for 60 days the effective date for any rules that have been published in the Federal Register or otherwise issued which have not taken effect.

While the freezing of such rules is not unusual for a new administration, the breadth of President Trump’s order (and our assessment that, due to vast policy differences between President Biden and President Trump, many such rules could in fact be radically altered) makes this an impactful (even if on its face technical) legally binding order.  As noted below, several of the rescission orders and rule moratoria have significant trade implications.

III. Broad Review Ordered, but Near-Term Uncertainty in Applicability of Certain U.S. Export Controls

President Trump’s America First Trade Policy memorandum describes trade policy as “a critical component to national security” that will be used to enhance the “industrial and technological advantages” of the United States, defend the United States’s “economic and national security,” and benefit “American workers, manufacturers, farmers, ranchers, entrepreneurs, and businesses.”  As part of this effort, the U.S. Secretaries of State and Commerce, in conjunction with other agency heads, are directed to “review the United States export control system and advise on modifications in light of developments involving strategic adversaries or geopolitical rivals as well as all other relevant national security and global considerations.”

What the Trump administration’s effort will ultimately entail is uncertain.  As a core question, it is unclear whether President Trump will continue the prior administration’s aggressive use of export controls to limit the abilities of geopolitical rivals to obtain access to and develop their own ability to manufacture technologies that are core to different emerging technologies such as the training of AI frontier models and quantum computing.

The memorandum specifically requires recommendations to “maintain, obtain, and enhance” the United States’ “technological edge” and to “identify and eliminate loopholes in existing export controls.”  These efforts are likely to focus on emerging technologies that pose a threat to national security, such as advanced semiconductors, quantum computing, connected devices, and other next generation technologies already under review by the Emerging Technology Division of the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) and partner agencies.

In its final weeks in office, the Biden administration issued a significant number of export controls-focused regulations imposing wide-ranging restrictions on advanced chips, connected vehicles, artificial intelligence (AI) diffusion, and related emerging technologies.  Though many of these regulations were accompanied by delayed compliance dates, the extensive obligations they impose – including worldwide, quota-metered, licensing requirements on the export of computing power and on the frontier AI models that are trained using this computing power – raised concerns across various industries and prompted questions concerning implementation.

Questions remain as to whether these individual regulations will be amended, repealed, or postponed considering Trump’s rescission of various Biden E.O.s and the issuance of the rule moratorium.

Significantly, despite President Trump’s recission of President Biden’s E.O. 14110 on the “Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence,” and call for review of any actions thereunder, the Biden team’s Framework for Artificial Intelligence Diffusion regulations draw upon multiple additional authorities, including the Export Control Reform Act of 2018.  Consequently, the mere recission of E.O. 14110 is unlikely to singlehandedly spell the end of the proposed AI diffusion controls.

Moreover, the express policy drivers for the AI Diffusion Rule appear aligned with President Trump’s mandate to eliminate his perceived “loopholes” in U.S. export controls that may have enabled geopolitical rivals of the United States to obtain access to the computing power required to train AI models and his mandate to ensure that the United States maintains the technological edge in frontier AI model training.  Indeed, although Trump rescinded E.O. 14110, he also issued his own E.O. calling for several agencies to develop within 180 days a plan to “sustain and enhance America’s global AI dominance.”

What is even less clear, especially given President Trump’s willingness (and perhaps preference) to act unilaterally, is whether the Trump Administration will take steps to maintain the bespoke coalition of countries (core among them the Netherlands, Japan, and South Korea) that the Biden Administration created and which has been used to develop uniform controls on technologies that are foundational to the next generation of developments in frontier AI model training, quantum computing, and synthetic biology.

As the confirmation of President Trump’s political appointees progresses, we will gain a clearer picture of what the administration will prioritize in terms of export controls and related national security risks.  We assess that a focus on addressing emerging technologies that pose national security risks will likely be a throughline from the previous administration.  While President Trump will impose his own stamp on new and pending regulations, many of the geopolitical risks that shaped U.S. national security and technology policy during Trump’s first administration and Biden’s remain the same.

IV. Temporary Reprieve for TikTok

Reversing his hardline stance toward the popular social media company during his first term, President Trump directed the Attorney General not to take any action for 75 days to enforce the Protecting Americans from Foreign Adversary Controlled Applications Act (Pub. L. 118-50, div. H) which effectively banned the app in the United States on January 19, 2025, in order for his administration to confer with relevant stakeholders.  The first Trump administration E.O. banning TikTok was being challenged in U.S. courts at the time it was rescinded by the Biden administration in 2021.

Even so, and indicative of the uncertainty with which some in the business community have greeted some of the president’s pronouncements, despite the reprieve, as of the date of the memorandum, the availability of the TikTok app remains limited.

V. Economic Sanctions

Even as President Trump has stated his desire to use sanctions sparingly (and in one of his initial actions he even cancelled a sanctions program related to the West Bank), some of his initial actions and statements – including his Treasury nominee’s speaking of expanding sanctions on Russia during his confirmation hearings and President Trump’s threatening additional sanctions on Russian president Putin if he did not agree to negotiate an end to his war on Ukraine – suggest a likely continuation of his record-setting use of sanctions during his first term.

a. Potential (Re-)authorization of Sanctions Targeting the International Criminal Court

President Trump rescinded E.O. 14022, which had previously terminated E.O. 13928’s national emergency with respect to the International Criminal Court (ICC) and corresponding authorization of sanctions targeting the ICC’s personnel or persons determined to have provided material support to certain of its operations.  Importantly, no new sanctions were announced.

While it is unclear whether the rescission of E.O. 14022 equates to the reinstatement of E.O. 13928 – given the likely legal necessity that President Trump would have to redeclare the “national emergency” with respect to the Court, which is a prerequisite for such sanctions – additional action is likely necessary to reinstitute such sanctions.  While the absence of a newly promulgated emergency may be the basis for litigation if sanctions were to emerge now, not only could President Trump reissue an emergency with the stroke of a pen, but also the direction of travel against the ICC is clear.  This direction is supported by a Congress that has its own ICC sanctions bill that has passed the House and is awaiting Senate action – and which threatens the use of the very aggressive George W. Bush-era anti-ICC law, “Hague Invasion Act.”  The Trump administration is clearly no friend of the ICC and in the absence of any alteration in the Court’s policies and actions, we fully expect sanctions measures to be imposed against the Court and/or its various components, offices, and personnel.

b. Reinstatement of Cuba’s Designation as a State Sponsor of Terrorism

On January 20, President Trump reinstated Cuba’s designation as a State Sponsor of Terrorism (SST).  The Biden administration had rescinded Cuba’s designation as an SST less than a week earlier, pursuant to a Vatican-brokered agreement with the Cuban government.  Given the first Trump administration’s hawkish economic policy with respect to Cuba (the United States designated Cuba as an SST in the final days of the first Trump administration, on January 12, 2021), the reinstating of Cuba’s SST designation was broadly anticipated.

This action, coupled with the appointment of Senator Marco Rubio as Secretary of State, also presages further restrictive measures targeting Cuba.  As of this writing, the Treasury Department, Office of Foreign Assets Control’s (OFAC’s) May 2024 amendments to the Cuban Assets Control Regulations remain in effect (as do many aspects of President Obama’s broader easing of Cuba-related sanctions from his second term).  The new Trump administration may seek to roll back these and other accommodations toward Cuba.  This includes President Biden’s suspension of Title III of the Helms-Burton Act, which provides for private rights of action against parties deemed to be trafficking in formerly-U.S.- person owned property in Cuba that was nationalized under Castro.  During his first term, President Trump had revoked the suspension of that title, which had been in place under every administration since the act was passed in 1996 and led to a spate of lawsuits.  President Biden’s suspension meant that no new cases could be filed under Title III.  This is likely to change under the new administration.

Additionally, the Cuba Restricted List, initially implemented during the first Trump administration through National Security Presidential Memorandum 5 and later revoked by President Biden shortly before leaving office, may soon be reinstated.

c. Call for Addition of Drug Cartels to Terrorism Sanctions Lists

On January 20, President Trump signed an Executive Order paving the way for the designation of certain international cartels as Foreign Terrorist Organizations (FTO) and Specially Designated Global Terrorists (SDGT).  The order does not create any new blocked persons.  Rather, it directs the Secretary of State to “take all appropriate action” to identify cartels and other organizations described in the order within 14 days.  The order further directs the Attorney General and Secretary of Homeland Security to make “operational preparations” to implement any related invocations of the Alien Enemies Act, which is a controversial wartime power of the president to restrain and remove nonnaturalized persons within the United States who are “natives, citizens, denizens, or subjects of” a hostile nation.  Whether a president could use such powers during peacetime is virtually certain to raise judicial challenge.

The United States currently maintains the Counter Narcotics Trafficking Sanctions Program and regularly designates cartels, their members, and affiliates under various related authorities.  Indeed, all the largest cartels thought most likely to be the focus of this order are already sanctioned under these (and/or other) sanctions authorities maintained by OFAC.  Designating cartels and their affiliates as SDGTs would not alter their sanctioned status.

Adding the FTO designation would impose certain additional risks.  Specifically, designation as an FTO (1) renders representatives and members of the FTO, if they are not a U.S. citizen or U.S. national, inadmissible to the United States; (2) exposes persons subject to U.S. jurisdiction to criminal liability for knowingly providing “material support or resources” to the FTO; and (3) provides for certain private rights of action.  This E.O., therefore, is indicative of the President’s desire to use sanctions as a tool in furtherance of his immigration policy and in support of his border-related national emergency.  Some have already indicated that an FTO designation could implicate U.S. business interests in Mexico due to how integrated some of the cartels are into that country’s formal economy.

d. Potential Redesignation of Ansarallah as an FTO

On January 22, President Trump also issued an Executive Order that will put in motion the process to re-designate Ansarallah (also known as the Houthis) as an FTO by March 8, 2025.  Under the order, an FTO designation would take place at any point within a 15-day period (February 22 to March 8) that is set to follow a 30-day information-gathering period (January 23 to February 21).  Following Ansarallah’s designation as an FTO, the order further directs the Secretary of State and the Administrator of USAID to terminate any projects, grants, or contracts they identify as having involved entities that either made payments to Ansarallah and its affiliates or that “criticized international efforts to counter Ansar Allah while failing to document Ansar Allah’s abuses sufficiently.”

As noted in Gibson Dunn’s 2023 Year-End Sanctions and Export Controls Update, the Biden administration had previously designated Ansarallah as an SDGT—and de-listed the group as an FTO – principally due to concerns about the impact of the designation on humanitarian projects in Yemen.  Like the potential upcoming FTO designation, Ansarallah’s designation as an SDGT came with a 30-day delay.  However, unlike in the case of Ansarallah’s SDGT designation, OFAC has not yet issued general licenses or guidance that might provide NGOs comfort to continue providing lawful humanitarian assistance to the Yemeni people that may involve Ansarallah.  Given that an FTO designation carries more onerous restrictions than the SDGT designation, including possible criminal liability for parties that provide “material support” to such a group, there is a substantial risk that designating the Houthis as an FTO may once again deter humanitarian organizations from providing critical aid to the country.

VI. Pause of Foreign Aid

President Trump issued an Executive Order establishing a 90-day pause in U.S. foreign assistance pending “assessment of programmatic efficiencies and consistency with United State foreign policy.”  The policy applies to new obligations and disbursements of development assistance funds to foreign countries and implementing NGOs, international organizations, and contractors.  While it includes important carve outs for emergency food provisioning, the E.O. authorizes the Department of State, in consultation with the Office of Management and Budget (OMB), to issue guidelines for department and agency heads to review their respective foreign aid programs.

Practically, the pause is designed principally to review existing foreign aid programs (which does not necessarily imply their elimination and/or wind-down).  Still, the purpose of the policy freeze outlined in section 1 of the E.O. strongly suggests a shift toward a reconsidering of, and potentially an elimination or limiting of, certain foreign aid programs.  The U.S. government currently maintains foreign aid programs related to over 200 countries, valued in total at USD $68 billion, a substantial part of which is allocated to Ukraine.

VII. Possible Expansion of Outbound Investment Regime

The America First Trade Policy memorandum also calls for a review of the recently implemented program regulating outbound U.S. investments involving Chinese persons operating in certain high-tech sectors and activities effective as of January 2, 2025.  Specifically, the memorandum calls for a review of E.O. 14105, which provided the basis for the program as well as the final implementing rule.  Our previous client alert provided a detailed overview of this new regulatory regime.

Likely responding to congressional interest in legislation expanding the types of industries subject to the program’s control (and in line with the President’s clear preference to take control of the policy narrative by undertaking executive actions rather than being subjected to congressional mandates), the America First Trade Policy memorandum mandates the Department of the Treasury to assess whether the current controls in the outbound investment regulations are sufficient to address national security interests, and to make recommendations for any further modification by April 1, 2025.

The new outbound investment regime has already created significant compliance challenges as companies and financial institutions grapple with ways to implement and adjust policies, procedures, and corporate agreements to comply with the new rules and account for shifting legal and commercial risk profiles and appetites.  It is likely these compliance concerns will multiply post-April 2025.

The Gibson Dunn team is closely following these developments and will be publishing more analysis as the situation develops.  In the meantime, Gibson Dunn lawyers stand ready to answer any questions as companies and organizations navigate the new policy environment.

The following Gibson Dunn lawyers prepared this update: Adam M. Smith, Ronald Kirk, Donald Harrison, David Wolber, Christopher T. Timura, Stephenie Gosnell Handler, Samantha Sewall, Audi Syarief, Chris Mullen, Lindsay Wardlaw, Mason Gauch, Zach Kosbie, Karsten Ball, Hui Fang, and Soo-Min Chae.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these issues. For additional information about how we may assist you, please contact the Gibson Dunn lawyer with whom you usually work, the authors, or the following leaders and members of the firm’s International Trade practice group:

United States:
Ronald Kirk – Co-Chair, Dallas (+1 214.698.3295, rkirk@gibsondunn.com)
Adam M. Smith – Co-Chair, Washington, D.C. (+1 202.887.3547, asmith@gibsondunn.com)
Stephenie Gosnell Handler – Washington, D.C. (+1 202.955.8510, shandler@gibsondunn.com)
Donald Harrison – Washington, D.C. (+1 202.955.8560, dharrison@gibsondunn.com)
Christopher T. Timura – Washington, D.C. (+1 202.887.3690, ctimura@gibsondunn.com)
David P. Burns – Washington, D.C. (+1 202.887.3786, dburns@gibsondunn.com)
Nicola T. Hanna – Los Angeles (+1 213.229.7269, nhanna@gibsondunn.com)
Courtney M. Brown – Washington, D.C. (+1 202.955.8685, cmbrown@gibsondunn.com)
Amanda H. Neely – Washington, D.C. (+1 202.777.9566, aneely@gibsondunn.com)
Samantha Sewall – Washington, D.C. (+1 202.887.3509, ssewall@gibsondunn.com)
Michelle A. Weinbaum – Washington, D.C. (+1 202.955.8274, mweinbaum@gibsondunn.com)
Karsten Ball – Washington, D.C. (+1 202.777.9341, kball@gibsondunn.com)
Hugh N. Danilack – Washington, D.C. (+1 202.777.9536, hdanilack@gibsondunn.com)
Mason Gauch – Houston (+1 346.718.6723, mgauch@gibsondunn.com)
Chris R. Mullen – Washington, D.C. (+1 202.955.8250, cmullen@gibsondunn.com)
Sarah L. Pongrace – New York (+1 212.351.3972, spongrace@gibsondunn.com)
Anna Searcey – Washington, D.C. (+1 202.887.3655, asearcey@gibsondunn.com)
Audi K. Syarief – Washington, D.C. (+1 202.955.8266, asyarief@gibsondunn.com)
Scott R. Toussaint – Washington, D.C. (+1 202.887.3588, stoussaint@gibsondunn.com)
Lindsay Bernsen Wardlaw – Washington, D.C. (+1 202.777.9475, lwardlaw@gibsondunn.com)
Shuo (Josh) Zhang – Washington, D.C. (+1 202.955.8270, szhang@gibsondunn.com)

Asia:
Kelly Austin – Denver/Hong Kong (+1 303.298.5980, kaustin@gibsondunn.com)
David A. Wolber – Hong Kong (+852 2214 3764, dwolber@gibsondunn.com)
Fang Xue – Beijing (+86 10 6502 8687, fxue@gibsondunn.com)
Qi Yue – Beijing (+86 10 6502 8534, qyue@gibsondunn.com)
Dharak Bhavsar – Hong Kong (+852 2214 3755, dbhavsar@gibsondunn.com)
Arnold Pun – Hong Kong (+852 2214 3838, apun@gibsondunn.com)

Europe:
Attila Borsos – Brussels (+32 2 554 72 10, aborsos@gibsondunn.com)
Patrick Doris – London (+44 207 071 4276, pdoris@gibsondunn.com)
Michelle M. Kirschner – London (+44 20 7071 4212, mkirschner@gibsondunn.com)
Penny Madden KC – London (+44 20 7071 4226, pmadden@gibsondunn.com)
Irene Polieri – London (+44 20 7071 4199, ipolieri@gibsondunn.com)
Benno Schwarz – Munich (+49 89 189 33 110, bschwarz@gibsondunn.com)
Nikita Malevanny – Munich (+49 89 189 33 224, nmalevanny@gibsondunn.com)
Melina Kronester – Munich (+49 89 189 33 225, mkronester@gibsondunn.com)
Vanessa Ludwig – Frankfurt (+49 69 247 411 531, vludwig@gibsondunn.com)

© 2025 Gibson, Dunn & Crutcher LLP.  All rights reserved.  For contact and other information, please visit us at www.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.

Stephen Hammer and Brian Richman are the authors of “SCOTUS Expands Opportunities to Challenge Agency Action in Corner Post” [PDF] published by The Texas Lawbook on January 23, 2025. 

Gibson Dunn is available to help clients understand what these and other expected policy changes will mean for them and how to navigate the shifting regulatory environment.

Within hours of his return to the Oval Office, President Donald Trump issued a flurry of executive actions to change how the federal workforce operates during his administration.

First, President Trump issued an executive order, “Restoring Accountability to Policy-Influencing Positions Within the Federal Workforce,” that aims to increase the effective oversight and streamline the removal and replacement of certain federal employees who hold “positions of a confidential, policy-determining, policy-making, or policy-advocating character.”  Generally, non-exempt civil service employees have procedural tools available to challenge and appeal their removal.  Monday’s order reinstates President Trump’s October 2020 executive order that sought to exempt certain federal employees from those civil service protections by designating them under “Schedule F,” a new classification for agency personnel in policy-making positions.  Former President Joe Biden rescinded the 2020 “Schedule F” executive order shortly after taking office.  And in April 2024, the Office of Personnel Management published a final rule explaining, among other things, that career civil servant protections are not lost by an involuntary move from a competitive service to excepted service position.  The April 2024 rule also interpreted the phrases indicating excepted service positions—i.e., “confidential, policy-determining, policy-making, or policy-advocating”—as applying only to noncareer political appointees, not “career employees.”  Departing from the prior administration’s approach, Monday’s order instructs the Director of the Office of Personnel Management to “amend the Civil Service Regulations to rescind all changes made by the final rule of April 9, 2024.”

Monday’s order also amends the 2020 reclassification order in several ways—most noticeably, the order now refers to the newly excepted class of employees as “Schedule Policy/Career” rather than “Schedule F.”  Despite this change in terminology, the substance remains largely the same.  Monday’s order targets “cases of career Federal employees resisting and undermining the policies and directives of their executive leadership.”  By excepting Schedule Policy/Career employees from those protections, Monday’s order seeks to make employees in “policy-influencing positions” directly “accountable to the President.”

It is currently unclear which federal positions will fall under the new classification.  The new order requires the Director of the Office of Personnel Management to “promptly recommend to the President which positions should be placed in Schedule Policy/Career,” and updates on that front should be available shortly.

The new order has already been challenged in court.  This week, the National Treasury Employees Union challenged the order in the United States District Court for the District of Columbia.   The suit claims that, in issuing the order, the President exceeded his statutory authority to prescribe rules for competitive service positions, infringed upon federal employees’ procedural due process rights, and violated the Administrative Procedure Act.

Second, President Trump issued an executive order seeking to reform the federal hiring process.  The order, “Reforming the Federal Hiring Process and Restoring Merit to Government Service,” directs the Assistant to the President for Domestic Policy within the next 120 days to “develop and send to agency heads a Federal Hiring Plan that brings to the Federal workforce only highly skilled Americans dedicated to the furtherance of American ideals, values, and interests.”  In developing that Federal Hiring Plan, the Assistant to the President for Domestic Policy must consult with the Director of the Office of Management and Budget, the Director of the Office of Personnel Management, and the Administrator of the Department of Government Efficiency.  Among other directives, the Federal Hiring Plan must: “prevent the hiring of individuals based on their race, sex, or religion, and prevent the hiring of individuals who are unwilling to defend the Constitution or to faithfully serve the Executive Branch”; “integrate modern technology to support the recruitment and selection process”; and “decrease government-wide time-to-hire to under 80 days.”

Notably, the executive order requires the Federal Hiring Plan to “include specific agency plans to improve the allocation of Senior Executive Service positions” in various agencies.  Senior Executive Service (SES) employees serve just below presidential appointees within federal agencies.  There are a limited number of SES positions in the federal government, and the executive order seeks to evaluate how the allocation of those positions “will best facilitate democratic leadership, as required by law, within each agency.”

Third, President Trump issued a memorandum focused on “Restoring Accountability for Career Senior Executives.”  The memorandum begins by emphasizing that the “President’s power to remove subordinates is a core part of the Executive power” and “because SES officials wield significant governmental authority, they must serve at the pleasure of the President.”  The memorandum directs, among other things, the Director of the Office of Personnel Management, in coordination with the Director of the Office of Management and Budget, “to issue SES Performance Plans that agencies must adopt.”  And consistent with the executive order described above, the memorandum directs “[e]ach agency head,” to the extent permitted by the relevant statute, to “reassign agency SES members to ensure their knowledge, skills, abilities, and mission assignments are optimally aligned to implement [the administration’s] agenda.”  Reports indicate that some agencies started reassigning senior career officials this week.

The memorandum also significantly changes Executive Resources Boards and Performance Review Boards within agencies.  Under 5 U.S.C. § 3393(b), agencies must establish Executive Resources Boards to conduct merit-based hiring for career SES officials.  And under 5 C.F.R. § 430.311, agencies must establish Performance Review Boards “to make recommendations to the appointing authority on the performance of its senior executives.”  President Trump’s memorandum directs “[e]ach agency head” to “terminate its existing Executive Resources Board (ERB), institute a new or interim ERB, and assign senior noncareer officials to chair and serve on the board as a majority alongside career members.”  Similarly, the memorandum directs “[e]ach agency head” to “terminate its existing Performance Review Board membership and re-constitute membership with individuals committed to full enforcement of SES performance evaluations that promote and assure an SES of the highest caliber.”

Fourth, President Trump issued a memorandum establishing a hiring freeze on federal civilian employees.  The freeze excludes “positions related to immigration enforcement, national security, or public safety.”  And the “the Director of the Office of Personnel Management (OPM) may grant exemptions from this freeze where those exemptions are otherwise necessary.”  No such exemption applied to law students who expected to begin working for the Department of Justice later this year.  Citing the federal hiring freeze, the Department of Justice recently rescinded the employment offers of students hired under the Attorney General’s Honors Program.

Within 90 days, “the Director of the Office of Management and Budget (OMB), in consultation with the Director of OPM and the Administrator of the United States DOGE Service (USDS),” must submit “a plan to reduce the size of the Federal Government’s workforce through efficiency improvements and attrition.”  The freeze will expire for most departments once OMB submits its plan.  However, the freeze will “remain in effect for the IRS until the Secretary of the Treasury, in consultation with the Director of OMB and the Administrator of USDS, determines that it is in the national interest to lift the freeze.”

Notably, the memorandum explains that “[c]ontracting outside the Federal Government to circumvent the intent of this memorandum is prohibited.”

Fifth, President Trump issued a memorandum directing federal departments and agencies “to terminate remote work arrangements and require employees to return to work in-person at their respective duty stations on a full-time basis.”  The memorandum explains that “department and agency heads shall make exemptions they deem necessary.”  And the memorandum recognizes that the directive to return to work in-person must be “implemented consistent with applicable law.”

Finally, President Trump issued an executive order “Establishing and Implementing the President’s ‘Department of Government Efficiency’“ also known as “DOGE.”  The executive order renames the United States Digital Service, which had previously provided consultation services to federal agencies on information technology, to the United States DOGE Service.  DOGE will be part of the Executive Office of the President, unlike its predecessor which was housed in the Office of Management and Budget.  As contemplated in some of the executive actions described above, DOGE will assist the administration in evaluating federal workforce issues and “modernizing Federal technology and software to maximize governmental efficiency and productivity.”  The order requires each executive agency to establish a “DOGE Team of at least four employees, which may include Special Government Employees, hired or assigned within thirty days of the date of this Order.”  DOGE Teams—typically comprised of “one DOGE Team Lead, one engineer, one human resources specialist, and one attorney”—will assist agency heads in increasing government efficiency.  In the past week, several lawsuits have been filed challenging the lawfulness of DOGE.

Gibson Dunn continues to monitor developments in this area.  Government contractors, federal grant recipients, and other private sector employers should consider reviewing their programs and contacts with federal employees to ensure compliance with evolving legal requirements.  Gibson Dunn is available to help clients understand what these and other expected policy changes will mean for them and how to comply with new requirements.

The following Gibson Dunn lawyers prepared this update: Michael Bopp, Stuart Delery, Matt Gregory, Andrew Kilberg, Tory Lauterbach, Andrew Barron, and Ariana Sañudo.

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 leader or member of the firm’s Public Policy, Administrative Law & Regulatory, Energy Regulation & Litigation, Labor & Employment, or Government Contracts practice groups, or the following in Washington, D.C.:

Michael D. Bopp – Co-Chair, Public Policy Practice Group,
(+1 202.955.8256, mbopp@gibsondunn.com)

Stuart F. Delery – Co-Chair, Administrative Law & Regulatory Practice Group,
(+1 202.955.8515, sdelery@gibsondunn.com)

Matt Gregory – Partner, Administrative Law & Regulatory Practice Group,
(+1 202.887.3635, mgregory@gibsondunn.com)

Andrew G.I. Kilberg – Partner, Administrative Law & Regulatory Practice Group,
(+1 202.887.3759, akilberg@gibsondunn.com)

Tory Lauterbach – Partner, Energy Regulation & Litigation Practice Group,
(+1 202.955.8519, tlauterbach@gibsondunn.com)

© 2025 Gibson, Dunn & Crutcher LLP.  All rights reserved.  For contact and other information, please visit us at www.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.

Gibson Dunn understands that the flurry of executive orders and other announcements from the White House during President Trump’s opening days is difficult to follow. To assist, we have taken on the assignment of cataloging and digesting each order as it is announced.

The Executive Order Tracker includes the executive orders and other significant announcements made by the Trump Administration to date. The list includes a summary of each order and announcement as well as information on the agencies involved and subject matters covered. It also includes links to more in-depth analyses Gibson Dunn has prepared on a number of the executive orders.

The Tracker will be updated promptly upon the issuance of new announcements and orders.

If you have questions about any of the executive orders, please do not hesitate to reach out to the Gibson Dunn lawyer with whom you usually work or the team below.

Please click on the link below to view Gibson Dunn’s complete Executive Order Tracker:

READ MORE

The following Gibson Dunn lawyers assisted in preparing this update: Michael Bopp, Amanda Neely, Aaron Gyde, Maya Jeyendran, and Tate Rosenblatt.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding the Executive Orders.  Please contact the Gibson Dunn lawyer with whom you usually work, any leader or member of the firm’s Public Policy, Administrative Law & Regulatory, or Energy Regulation & Litigation practice groups, or the following in Washington, D.C.:

Michael D. Bopp – Co-Chair, Public Policy Practice Group,
(+1 202.955.8256, mbopp@gibsondunn.com)

Stuart F. Delery – Co-Chair, Administrative Law & Regulatory Practice Group,
(+1 202.955.8515, sdelery@gibsondunn.com)

Andrew G.I. Kilberg – Partner, Administrative Law & Regulatory Practice Group,
(+1 202.887.3759, akilberg@gibsondunn.com)

Tory Lauterbach – Partner, Energy Regulation & Litigation Practice Group,
(+1 202.955.8519, tlauterbach@gibsondunn.com)

© 2025 Gibson, Dunn & Crutcher LLP.  All rights reserved.  For contact and other information, please visit us at www.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.

From the Derivatives Practice Group: This week, the CFTC announced that Commissioner Caroline D. Pham was unanimously elected as CFTC Acting Chairman and SEC Acting Chairman Uyeda announced the formation of a crypto task force.

New Developments

• Acting Chairman Pham Announces CFTC Leadership Changes. On January 22, Acting Chairman Pham announced the following CFTC leadership changes: Acting Chief of Staff: Harry Jung; Acting General Counsel: Meghan Tente; Acting Director of the Office of Public Affairs: Taylor Foy; Acting Director of the Office of Legislative and Intergovernmental Affairs: Nicholas Elliot; Acting Director of the Division of Market Oversight: Amanda Olear; Acting Director of the Division of Clearing and Risk: Richard Haynes; Acting Director of the Market Participants Division: Tom Smith; Acting Director of the Division of Enforcement: Brian Young; Acting Director of the Office of International Affairs: Mauricio Melara. [NEW]
• SEC Acting Chairman Uyeda Announces Formation of New Crypto Task Force. On January 21, SEC Acting Chairman Uyeda launched a crypto task force that, according to the SEC, is dedicated to developing a comprehensive and clear regulatory framework for crypto assets. Commissioner Hester Peirce will lead the task force. Richard Gabbert, Senior Advisor to the Acting Chairman, and Taylor Asher, Senior Policy Advisor to the Acting Chairman, will serve as the task force’s Chief of Staff and Chief Policy Advisor, respectively. The SEC said that the task force will collaborate with SEC staff and the public to set the SEC on a sensible regulatory path that respects the bounds of the law and that the task force’s focus will be to help the SEC draw clear regulatory lines, provide realistic paths to registration, craft sensible disclosure frameworks, and deploy enforcement resources judiciously. The Sec indicated that the task force will operate within the statutory framework provided by Congress, coordinate the provision of technical assistance to Congress as it makes changes to that framework, and coordinate with federal departments and agencies, including the CFTC, and state and international counterparts. [NEW]
• CFTC Names Caroline D. Pham Acting Chairman. On January 20, the CFTC announced the members of the Commission have unanimously elected Commissioner Caroline D. Pham as Acting Chairman, effective January 20, 2025. Acting Chairman Pham was nominated to be a CFTC Commissioner on January 12, 2022 and unanimously confirmed by the U.S. Senate on March 28, 2022, for a term beginning on April 14, 2022 and expiring on April 13, 2027. She succeeds Rostin Behnam, who served as Chairman since January 4, 2022 and will remain a Commissioner until his departure on February 7, 2025. On January 21, Acting Chairman Pham made the following statement: “I’m humbled and grateful to be entrusted by President Trump to lead the CFTC as we approach a significant milestone in our history with tremendous opportunities ahead. For the past half century, the CFTC has proudly served our mission to promote market integrity and liquidity in the commodity derivatives markets that are critical to the real economy and global trade—ensuring American growers, producers, merchants and other commercial end-users can mitigate risks to their business and support strong U.S. economic growth. As the CFTC celebrates our 50th anniversary, we must also refocus and change direction with new leadership to fulfill our statutory mandate to promote responsible innovation and fair competition in our markets that have continually evolved over the decades. It’s time for the CFTC to get back to the basics. I’m honored to work alongside our dedicated CFTC staff, and I thank former Chairman Behnam and my fellow Commissioners for their service.” [NEW]
• CFTC and the Bank of England Comment on Report on Initial Margin Transparency and Responsiveness in Centrally Cleared Markets. On January 15, the Basel Committee on Banking Supervision (“BCBS”), the Bank for International Settlements’ Committee on Payments and Market Infrastructures (“CPMI”) and the International Organization of Securities Commissions (“IOSCO”) published the final report Transparency and responsiveness of initial margin in centrally cleared markets – review and policy proposals and the accompanying cover note Consultation feedback and updated proposals. This report is the culmination of work undertaken by BCBS, CPMI, and IOSCO, co-chaired by the Bank of England and the Commodity Futures Trading Commission.
• CFTC Announces Review of Nadex Sports Contract Submissions. On January 14, the CFTC notified the North American Derivatives Exchange, Inc. (“Nadex”) d/b/a Crypto.com it will initiate a review of the two sports contracts that were self-certified and submitted to the CFTC on Dec. 19, 2024. As described in the submissions, the contracts are cash-settled, binary contracts. The CFTC determined the contracts may involve an activity enumerated in CFTC Regulation 40.11(a) and section 5c(c)(5)(C) of the Commodity Exchange Act. As required under CFTC Regulation 40.11(c)(1), the CFTC has requested that Nadex suspend any listing and trading of the two sports contracts during the review period.
• CFTC Announces Departure of Clearing and Risk Director Clark Hutchison. On January 15, the CFTC announced Division of Clearing and Risk Director Clark Hutchison will depart the agency Jan. 15. Mr. Hutchison has served as director since July 2019.
• CFTC Staff Issues Advisory Regarding the Compliance Date for Certain DCO Reporting Requirements. On January 10, the CFTC’s Division of Clearing and Risk (“DCR”) announced it issued a staff advisory regarding the compliance date for certain daily reporting requirements for registered derivatives clearing organizations (“DCOs”). The requirements were amended in August 2023. The compliance date for the amended requirements is February 10, 2025. According to the advisory, DCR will not expect any DCO to comply with the amended requirements until December 1, 2025, so long as the DCO continues to comply with the previous version of the requirements.
• CFTC Announces Departure of Enforcement Director Ian McGinley. On January 10, the CFTC announced that Division of Enforcement Director Ian McGinley will depart the agency on January 17, 2025. Mr. McGinley has served as Director of Enforcement since February 2023.
• Chairman Rostin Behnam Announces Departure from CFTC. On January 7, Chairman Rostin Behnam announced that he will be stepping down from his position as Chairman on January 20 and that his final day at the CFTC will be Friday, February 7.

New Developments Outside the U.S.

• New Governance Structure for Transition to T+1 Settlement Cycle Kicks Off. On January 22, the European Securities and Markets Authority (“ESMA”), the EU’s financial markets regulator and supervisor, the European Commission (“EC”) and the European Central bank (“ECB”) launched a new governance structure to support the transition to the T+1 settlement cycle in the European Union. Following ESMA’s report with recommendations on the shortening of the settlement cycle, the new governance structure has been designed to oversee and manage the operational, regulatory and technological aspects of this transition. Given the high level of interconnectedness within the EU capital market, a coordinated approach across the EU, involving authorities, market participants, financial market infrastructures and investors, is desirable. ESMA said that the key elements of the new governance model include an Industry Committee, composed of senior leaders and representatives from market players, several technical workstreams, operating under the Industry Committee, focusing on the technological operational adaptations needed in the areas concerned by the transition to T+1 (i.e. trading, matching, clearing, settlement, securities financing, funding and FX, asset management, corporate events, settlement efficiency), and two more general workstreams that will review the scope and the legal and regulatory aspects of these adaptations, and a Coordination Committee, chaired by ESMA and with representation from the EC, the ECB, ESMA and the chair of the Industry Committee, intended to ensure coordination between the authorities and the industry, advising on challenges that may arise during the transition. Additionally, ESMA said that the Commission is currently considering the merits of a legislative change mandating a potential transition to a shorter settlement cycle. [NEW]
• ESMA and the EC Publish Guidance on Non-MiCA Compliant ARTs and EMTs (Stablecoins). On January 17, ESMA published a statement reinforcing the position related to the offer of ARTs and EMTs (also known as stablecoins) in the EU under Market in Crypto Assets regulation (MiCA). The statement provides guidance on how and under which timeline CASPs are expected to comply with the requirements of Titles III and IV of MiCA, as clarified in the EC Q&A. In particular, National Competent Authorities are expected to ensure compliance by crypto assets services providers (“CASPs”) regarding non-compliant ARTs or EMTs as soon as possible, and no later than the end of Q1 2025. ESMA indicated that the statement is intended to facilitate coordinated actions at the national level and avoid potential disruptions. The EC has also delivered a Q&A, intended to provide guidance on the obligations contained in titles III and IV of MiCA and how these obligations should apply to CASPs. The Q&A clarifies that certain crypto-asset services may constitute an offer to the public or an admission to trading in the EU and should therefore comply with titles III and IV of MiCA. [NEW]
• The EBA and ESMA Analyze Recent Developments in Crypto-Assets. On January 16, ESMA and the European Banking Authority (“EBA”) published a Joint Report on recent developments in crypto-assets, analyzing decentralized finance (“DeFi”) and crypto lending, borrowing and staking. This publication is the EBA and ESMA’s contribution to the European Commission’s report to the European Parliament and Council under Article 142 of the Markets in Crypto-Assets Regulation. EBA and ESMA find that DeFi remains a niche phenomenon, with value locked in DeFi protocols representing 4% of all crypto-asset market value at the global level. The report also sets out that EU adoption of DeFi, while above the global average, is lower than other developed economies (e.g. the US, South Korea).
• BCBS, CPMI and IOSCO Publish Reports on Margin in Cleared and Non-cleared Markets. On January 15, BCBS, CPMI and IOSCO published three final reports on initial and variation margin in centrally cleared and non-centrally cleared markets. The three reports reflect feedback received further to the publication of consultation reports last year. BCBS, CPMI and IOSCO published the final report on transparency and responsiveness of initial margin in centrally cleared markets, setting out 10 final policy proposals relevant to central counterparties (“CCPs”) and clearing members. ISDA and the Institute of International Finance (IIF) submitted a joint response during the consultation. CPMI and IOSCO published the final report on streamlining variation margin in centrally cleared markets, setting out eight examples of effective practices for CCPs’ variation margin processes. ISDA and the IIF submitted a joint response during the consultation. BCBS and IOSCO published the final report on streamlining variation margin processes and initial margin responsiveness of margin models in non-centrally cleared markets, setting out eight recommendations. ISDA and the IIF submitted a joint response during the consultation. In relation to the BCBS, CPMI and IOSCO report on initial margin transparency and responsiveness in centrally cleared markets, the Bank of England and the CFTC have also published a joint statement expressing support for the findings and policy proposals. [NEW]
• EU Funds Continue to Reduce Costs. On January 14, ESMA published its seventh market report on the costs and performance of EU retail investment products, showing a decline in the costs of investing in key financial products. This report aims at facilitating increased participation of retail investors in capital markets by providing consistent EU-wide information on cost and performance of retail investment products.

New Industry-Led Developments

• ISDA Publishes Equity Definitions VE, Version 2.0. On January 21, ISDA published version 2.0 of the ISDA Equity Derivatives Definitions (Versionable Edition) on the MyLibrary platform. This publication includes, among other updates, provisions that can be used for documenting transactions with time-weighted average price or volume-weighted average price features, futures price valuation in respect of share transactions and benchmark provisions in respect of an index. [NEW]
• ISDA and GFXD Respond to FCA on Future of SI Regime. On January 10, ISDA and the Global Foreign Exchange Division (“GFXD”) of the Global Financial Markets Association (“GFMA”) responded to questions from the UK Financial Conduct Authority (“FCA”) on the future of the systematic internalizer (“SI”) regime. In the response, ISDA and GFXD support the proposal that firms are no longer required to identify themselves as SIs for derivatives trading and provide input on the consequences of this requirement falling away. ISDA and GFXD do not believe there will be any impact for reporting, best execution or on market structure.

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)

© 2025 Gibson, Dunn & Crutcher LLP.  All rights reserved.  For contact and other information, please visit us at www.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.

Recently proposed regulations provide that, for taxable years beginning after December 31, 2026, the definition of “covered employees” will be expanded to include a company’s next five highest compensated employees for each taxable year in addition to those employees that already fall into such definition, regardless of whether they are officers of the company.

Last amended in 2017, Section 162(m) of the Internal Revenue Code generally prohibits publicly held corporations from taking income tax deductions for annual compensation in excess of $1 million paid to the company’s “covered employees.”  Currently, “covered employees” include a company’s principal executive officer, principal financial officer, and three other most highly compensated executive officers determined based on total compensation required to be disclosed pursuant to Item 402 of Regulation S-K (thus, typically, the company’s “named executive officers” as disclosed in the company’s Form 10-K or annual proxy statement for the year). If a person is designated as a “covered employee” after December 31, 2016, the person remains a “covered employee” in perpetuity.

On January 14, 2025, the Internal Revenue Service and Treasury Department issued proposed regulations to implement statutory changes to Section 162(m) enacted by the American Rescue Plan Act of 2021. In implementing these changes, the proposed regulations provide that, for taxable years beginning after December 31, 2026, the definition of “covered employees” will be expanded to include the next five highest compensated employees for each taxable year, regardless of whether they are officers of the company. These additional highly compensated employees may change from year to year and will not remain “covered employees” in perpetuity.

• The proposed regulations clarify a few points in determining who qualifies as one of the next five highest compensated employees who make up these additional “covered employees.” Specifically, companies will need to consider all of their common law employees and officers, as well as employees and officers of any member of the company’s affiliated group. Employees for this purpose also include employees of related management entities or professional employer organizations who perform substantially all of their services during the taxable year for the publicly held corporation or members of its affiliated group.
• In ranking employees to determine who is the most highly compensated, companies must look at compensation that would be deductible in that tax year but for the application of Section 162(m). As a result, compensation that may be granted in 2025 or 2026 but that is includible in income and deductible by the company in 2027 will be counted for purposes of determining who is an additional “covered employee” for the 2027 tax year. This may have an immediate impact on companies’ annual compensation planning and how they account for tax for financial statement purposes.
• The five highest compensated employees for a given taxable year may include individuals who were already among the company’s covered employees by virtue of previously being a named executive officer for a prior taxable year.

The proposed regulations include several examples that provide guidance with respect to application of these changes.

In anticipation of the changes to Section 162(m), companies may wish to review their employee population (including employees of their affiliated group) and begin to track compensation to determine how these changes may affect the company’s group of “covered employees” for purposes of Section 162(m).  Special attention should be given to particularly large cash or equity awards that may vest or become payable in or after 2027.

The following Gibson Dunn lawyers assisted in preparing this update: Sean Feller, Krista Hanvey, Kate Napalkova, and Alli Balick.

Gibson Dunn’s lawyers are available to assist with any questions you may have regarding these issues. To learn more about these developments, please contact the Gibson Dunn lawyer with whom you usually work, any leader or member of the firm’s Executive Compensation and Employee Benefits practice group, or the authors:

Sean C. Feller – Los Angeles (+1 310.551.8746, sfeller@gibsondunn.com)
Krista Hanvey – Dallas (+1 214.698.3425, khanvey@gibsondunn.com)
Kate Napalkova – New York (+1 212.351.4048, enapalkova@gibsondunn.com)
Alli Balick – Los Angeles (+1 213.229.7685, abalick@gibsondunn.com)

© 2025 Gibson, Dunn & Crutcher LLP.  All rights reserved.  For contact and other information, please visit us at www.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.

Seth Rokosky is the author of “The Unique Skills of the Appellate Litigator” [PDF] publsihed by the New York State Bar Association’s NYLitigator in its December 2024 issue. 

The U.S. Supreme Court has stayed a recent district court order that preliminarily enjoined enforcement of the Corporate Transparency Act (CTA).  While a separate district court ruling staying the effectiveness of the CTA’s beneficial ownership interest reporting rule (Reporting Rule) nationwide remains in effect, that stay could soon be lifted to conform with the Supreme Court’s decision. This means that the Reporting Rule could soon become enforceable once again while the Fifth Circuit and other courts evaluate its constitutionality.  In the meantime, FinCEN has acknowledged that the Reporting Rule currently remains unenforceable notwithstanding the Supreme Court’s decision.

Entities that believe they may be subject to the CTA and its associated Reporting Rule should closely monitor these issues, and consult with their CTA advisors as necessary, to understand their obligations now that the Reporting Rule may soon become effective again.  Entities may be required to file Beneficial Ownership Information reports on short notice.

For additional background information, please refer to our Client Alerts issued on December 5, December 9, December 16, December 24, and December 27, 2024.

On December 3, Judge Mazzant of the U.S. District Court for the Eastern District of Texas ruled that the CTA was likely unconstitutional.[1]  The court issued a nationwide preliminary injunction against enforcement of the CTA and postponed the effective date of the Reporting Rule that set filing deadlines for compliance.  The government appealed and briefly obtained a stay of the district court’s order from a Fifth Circuit motions panel, but the Fifth Circuit merits panel that will hear the government’s appeal in March reinstated the district court’s order, making the CTA unenforceable once again.

The government then filed an emergency application in the Supreme Court asking the Court to stay the district court’s order in full—in other words, to put on hold the district court’s nationwide preliminary injunction against CTA enforcement and its postponement of the Reporting Rule’s effective date.[2]

On January 23, 2025, the Supreme Court granted the government’s application in full, staying the district court’s order “pending the disposition of the appeal in the United States Court of Appeals for the Fifth Circuit and disposition of [any] petition for a writ of certiorari.”[3]  The Court’s decision was 8–1.  While the Court did not provide a written opinion, Justice Gorsuch filed a concurrence noting that he would take the case now to decide the propriety of “universal” injunctions.  Justice Jackson dissented, noting her view that the government had not shown that the Court’s intervention was necessary at this time, without expressing any view on the merits.

What the Latest Order Means for Entities Subject to the CTA

Now that the Supreme Court has stayed the district court’s order, the CTA will be enforceable while the case is appealed to the Fifth Circuit (and, potentially, to the Supreme Court).  The government’s reply brief in the Supreme Court indicated that if the Supreme Court stayed the district court’s order, FinCEN “would again briefly extend the [reporting] deadline in light of the injunction’s having been in effect,” similar to how FinCEN responded after the Fifth Circuit’s motions panel briefly reinstated the CTA in December.[4]  Companies should monitor FinCEN’s announcements closely for additional guidance now that the Supreme Court has granted the stay.

Notably, the Supreme Court’s order operates to stay only the order issued by the Northern District of Texas in the Texas Top Cop Shop case, No. 4:24–cv–478 (E.D. Tex.).[5]  All other lower court orders remain in effect, for now.  Importantly, on January 7, a different district court in Texas enjoined enforcement of the CTA as applied to the plaintiffs in that case and stayed the effective date of the Reporting Rule universally.[6]  The order in that case, Smith v. U.S. Department of the Treasury, remains in effect.  So for now, the Reporting Rule technically remains stayed.  But given the Supreme Court’s recent order staying the Top Cop Shop order, the government could obtain a similar stay of the district court’s order in Smith if the government requests that relief (or if the district court stays its order unilaterally) in light of the Supreme Court’s decision.  On January 24, FinCEN posted an update recognizing that a “separate nationwide order issued by a different federal judge” in the Smith case remains in effect, and noting that “[r]eporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force.”[7]

In the meantime, it remains to be seen whether the government will take a new position on the CTA under the new Trump Administration.  Although the Department of Justice typically defends the constitutionality of statutes enacted by Congress, it is possible the new Administration will change positions and decline to enforce the CTA or take further steps to defend it.

Entities that believe they may be subject to the CTA and its associated Reporting Rule should closely monitor these issues, and consult with their CTA advisors as necessary, to understand their obligations now that the Reporting Rule may soon become effective again.  Entities may be required to file Beneficial Ownership Information reports on short notice.

[1]  Texas Top Cop Shop, Inc. et al. v. Garland et al., No. 4:24-CV-478, Dkt. 30 (E.D. Tex. Dec. 3, 2024).

[2] Application, Henry v. Top Cop Shop, Inc., No. 24A653 (U.S. Supreme Court Dec. 31, 2024).

[3] Order, Henry v. Top Cop Shop, Inc., No. 24A653 (U.S. Supreme Court Jan. 23, 2025).

[4] Reply at 15, Henry v. Top Cop Shop, Inc., No. 24A653 (U.S. Supreme Court Jan. 13, 2025).

[5] See Order, Henry v. Top Cop Shop, Inc., supra (“The December 5, 2024 amended order of the United States District Court for the Eastern District of Texas, case No. 4:24–cv–478, is stayed”).

[6] Smith v. U.S. Dep’t of Treasury, No. 6:24-cv-00336-JDK, Dkt. 30 at 33–34 (E.D. Tex. Jan. 7, 2025).

[7] https://fincen.gov/boi (Jan. 24, 2025).

The following Gibson Dunn lawyers assisted in preparing this update: Kevin Bettsteller, Stephanie Brooker, Matt Gregory, Justin Newman, Dave Ware, Shannon Errico, Sam Raymond, and Connor Mui.

Gibson Dunn has deep experience with issues relating to the Bank Secrecy Act, the Corporate Transparency Act, other AML and sanctions laws and regulations, and challenges to Congressional statutes and administrative regulations.

For assistance navigating white collar or regulatory enforcement issues, please contact the authors, the Gibson Dunn lawyer with whom you usually work, or any leader or member of the firm’s Anti-Money Laundering, Administrative Law & Regulatory, Investment Funds, Real Estate, or White Collar Defense & Investigations practice groups.

Please also feel free to contact any of the following practice group leaders and members and key CTA contacts:

Anti-Money Laundering:
Stephanie Brooker – Washington, D.C. (+1 202.887.3502, sbrooker@gibsondunn.com)
M. Kendall Day – Washington, D.C. (+1 202.955.8220, kday@gibsondunn.com)
David Ware – Washington, D.C. (+1 202-887-3652, dware@gibsondunn.com)
Ella Capone – Washington, D.C. (+1 202.887.3511, ecapone@gibsondunn.com)
Sam Raymond – New York (+1 212.351.2499, sraymond@gibsondunn.com)

Administrative Law and Regulatory:
Stuart F. Delery – Washington, D.C. (+1 202.955.8515, sdelery@gibsondunn.com)
Eugene Scalia – Washington, D.C. (+1 202.955.8673, dforrester@gibsondunn.com)
Helgi C. Walker – Washington, D.C. (+1 202.887.3599, hwalker@gibsondunn.com)
Matt Gregory – Washington, D.C. (+1 202.887.3635, mgregory@gibsondunn.com)

Investment Funds:
Kevin Bettsteller – Los Angeles (+1 310.552.8566, kbettsteller@gibsondunn.com)
Shannon Errico – New York (+1 212.351.2448, serrico@gibsondunn.com)
Greg Merz – Washington, D.C. (+1 202.887.3637, gmerz@gibsondunn.com)

Real Estate:
Eric M. Feuerstein – New York (+1 212.351.2323, efeuerstein@gibsondunn.com)
Jesse Sharf – Los Angeles (+1 310.552.8512, jsharf@gibsondunn.com)
Lesley V. Davis – Orange County (+1 949.451.3848, ldavis@gibsondunn.com)
Anna Korbakis – Orange County (+1 949.451.3808, akorbakis@gibsondunn.com)

White Collar Defense and Investigations:
Stephanie Brooker – Washington, D.C. (+1 202.887.3502, sbrooker@gibsondunn.com)
Winston Y. Chan – San Francisco (+1 415.393.8362, wchan@gibsondunn.com)
Nicola T. Hanna – Los Angeles (+1 213.229.7269, nhanna@gibsondunn.com)
F. Joseph Warin – Washington, D.C. (+1 202.887.3609, fwarin@gibsondunn.com)

© 2025 Gibson, Dunn & Crutcher LLP.  All rights reserved.  For contact and other information, please visit us at www.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.

With President Trump signing twenty-six executive orders (“EOs”) on day one of his second term, several focusing squarely on the domestic energy sector and many more focusing on areas such as the environment and trade that will significantly impact domestic energy production, the U.S. energy industry is busy untangling what the second Trump presidency will mean for it.

From tariffs to tax credits and beyond, much could change for energy companies in the near future.  Here are ten regulatory and policy issues energy industry experts will be monitoring in the early days of President Trump’s second administration.

1.     DOE Grants and Loans

The energy industry will be watching to see to what extent the Trump administration will continue to fund clean energy programs through Department of Energy (DOE) grant or loan programs after President Trump issued an EO calling on the federal government to “immediately pause the disbursement of funds appropriated” through the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law  (BIL) on day one of his second term.  The BIL and the IRA allocated billions to these programs, and the Biden administration awarded approximately 99% of the funds available for fiscal year 2024 or earlier, 90% of which has been legally obligated to awardees under contractual commitments, which would presumably make those amounts harder to refuse to disburse.  Significant funds still remain available under those statutes for future fiscal years, although it is unclear how the Trump administration ultimately will decide to administer the awarding of those funds, if at all.  Areas that have received significant grant and loan awards from the DOE that could be affected by executive action rolling back DOE funding include battery storage, biofuels, hydrogen, advanced nuclear, carbon management technologies (such as carbon sequestration), advanced technology vehicles (including electric vehicles), grid modernization, solar, wind, and critical minerals.

Republican legislators have indicated that the loan programs may be targeted for cost-cutting measures, and President Trump has stated that he will “rescind all unspent funds” from the IRA.  However, Chris Wright, President Trump’s nominee for Secretary of the DOE, has experience working with DOE resources from his involvement  with a company developing a small modular reactor project at the Idaho National Lab.  Although Wright acknowledged in his confirmation hearing the need to address issues raised in a recent investigator general DOE loan program report, which suggested pausing DOE loan issuances until the Loan Program Office can ensure that contracting officers and their representatives are complying with conflict of interest regulations and enforcing conflict of interest contractual obligations, he emphasized during his confirmation hearing the importance of DOE investments in accelerating the development of new energy technologies to address climate change.

However, based on President Trump’s statements that he believes the Impoundment Control Act is unconstitutional and an EO that he issued directing all agencies to pause disbursement of appropriated funds made available through the IRA and BIL, current and would-be grant and loan awardees and recipients will be watching to see if the Trump administration takes further steps to halt already-awarded or obligated funding, modify funding conditions for already-awarded DOE grants and loans, or restart funding disbursements under new or revised regulatory standards.  As our firm’s previous exploration of the proposed Department of Government Efficiency (DOGE) explained, any such moves will face significant legal challenges, including arguments that President Trump cannot bar the DOE from spending previously allocated money unless Congress repeals the Impoundment Control Act.

2.     Regulatory Streamlining of Permitting Processes

All regions of the U.S. face challenges from insufficient energy infrastructure due to aging energy delivery systems, growing electricity demand, and changing energy sourcing and market dynamics.  These challenges exist both for electricity transmission and pipeline modernization and expansion initiatives.  Efforts to modernize this infrastructure currently face significant federal, state, and local permitting hurdles, where for example the federal environmental reviews for electricity transmission take on average 4.3 years to complete.  Attempts to modernize and expand pipeline infrastructure face similar hurdles that are magnified by issues related to evaluation of and plans to address greenhouse gas emissions.  President Trump took action to reduce permitting timelines during his previous term and stated that he would again streamline permitting processes, and the energy industry will certainly be watching to see whether he fulfills this pledge.

Like President Trump, the Republican Party generally supports permitting reform, as do President Trump’s nominees for the DOE, Department of the Interior, and Environmental Protection Agency (EPA).  For example, Chris Wright, the nominee for Secretary of Energy, stated that he is “a hundred percent committed to growing our electricity grid and our energy production and removing those barriers that are standing in the way” of that goal.  Similarly, Doug Burgum, the nominee for Secretary of the Interior and President Trump’s planned “Energy Czar,” stated that “it takes too long in our country” to build transmission lines and pipelines and emphasized the need for efficient energy transportation networks.  Likewise, Lee Zeldin, the nominee for EPA Administrator, highlighted permitting reform as one of his priorities and stated that he “would look forward to doing [his] part to make sure that the EPA is not holding up any opportunities to be able to pursue sound applications” for infrastructure.

Given the widespread support among the Republican Party and Trump administration for permitting reform, as well as the bipartisan support for reform, the energy industry will be watching to see if the administration crafts rules to ease the federal permitting process not only for pipelines but also for electric transmission lines and if the administration is able to pressure Congress into passing permitting reform legislation.

3.     IRA Tax Credits

President Trump did not announce any changes to IRA tax credits on his first day in office, but has criticized electric vehicle and offshore wind tax credits in the past.  (The IRA made certain credits wholly or partially refundable (so-called direct payments), but the appropriation for these refunds was not made through the Inflation Reduction Act and so these refunds would apparently fall outside the scope of President Trump’s executive order pausing disbursement of IRA funds.)  Bipartisan support for IRA tax credits, combined with estimates that red states have received more than half of announced clean energy projects supported by the IRA, may lead to IRA tax credits being left largely undisturbed by President Trump and legislators.  Some of the richer IRA credits may also provide significant subsidies to the biogas and fossil fuel industries, such as the hydrogen production credit, the sustainable aviation fuel credit, and the technology-neutral investment and production tax credits.  It is notable that in August of 2024 eighteen Republican legislators wrote House Majority Leader Mike Johnson to encourage him to ensure that IRA tax credits are protected from any legislation to repeal other portions of the IRA.  Additionally, a senior tax policy advisor in the Senate stated publicly in May of 2024 that full repeal of IRA tax incentives was unlikely no matter the outcome of the 2024 general election.  However, because several critical provisions in the signature tax legislation of President Trump’s first term (the Tax Cuts and Jobs Act, or TCJA) either have begun to sunset or are scheduled to sunset at the end of this year, tax reform is expected to be a major Congressional priority in 2025.  Simply extending the TCJA would itself cost trillions; as a result, the coming debates may place many tax issues up for discussion.  Nonetheless, because IRA tax credits are core to the economic feasibility of many planned energy projects, energy industry stakeholders will be watching carefully to see if the U.S. Congress or the Trump administration takes any steps to limit the availability of IRA tax credits.

4.     Nuclear

The energy industry will be watching to see how President Trump will support the development of domestic nuclear facilities and whether such support will include significant financial backing to bolster nuclear project development, including small modular nuclear reactors and more conventional large nuclear facilities, because nuclear facilities traditionally have much longer lead times and greater front-end capital requirements for completion of permitting and construction as compared to other energy generation projects, such as natural gas and solar.  The U.S., the world’s largest producer of nuclear energy, relies on nuclear energy for about one-fifth of its electricity.  As a source of baseload energy, nuclear energy compliments other carbon-free energy sources and could help the grid maintain reliability and lower carbon emissions.  However, the U.S. nuclear fleet is aging, with an average reactor age of about 42 years.

Republicans generally view nuclear power favorably.  Additionally, one of President Trump’s January 20 EOs also specifically directed heads of agencies to identify actions that impose an undue burden on the development of nuclear energy resources.  However, while President Trump seems to support small nuclear reactors, he has expressed hesitancy towards large nuclear plants due to permitting obstacles and overspending.  Moreover, permitting reform alone may not be enough to facilitate new nuclear development, where the biggest challenge often is a dearth of financing to  provide funding through the development phase to get nuclear plants to market.  Observers thus will be watching to see if and how the Trump administration and allies in Congress will take further steps to champion funding opportunities for development and deployment of new nuclear power plants.

President Trump’s nominees to lead the DOE and EPA have made pro-nuclear statements.  Chris Wright, who is nominated for Secretary of Energy and served with the board of  a small modular reactor company, said that he “absolutely” thinks that there is an “enabling role DOE can play to help launch nuclear energy” and that nuclear “should be a huge part of America’s future energy source,” but that “that won’t happen without action within the legislature of the [U.S.], with action from the [DOE] and our incoming administration.” Similarly, Lee Zeldin, nominated for EPA Administrator, stated during his confirmation hearing that he agrees that nuclear power should be part of the energy mix.

Given the Republican Party’s and Trump administration’s stated support for nuclear energy and bipartisan support recently expressed for government action to facilitate data center expansion, which could be supported through development of additional nuclear baseload power, the energy industry will be watching to see whether the Trump administration or Congress crafts policies to support nuclear energy, including permitting reform and funding to support development and deployment of new nuclear plants.

5.     Climate & Emissions

On the first day of his second term, President Trump rolled back many of President Biden’s climate-related EOs.  President Trump also issued new EOs impacting U.S. climate policies, including withdrawing from the Paris Agreement, replacing environmental impact statements that prevented oil and gas leasing in Alaska, and directing federal agencies to pause disbursement of funds appropriated through the IRA and BIL, revise their environmental analyses, and review existing agency actions that burden domestic energy resource development.

Some of President Trump’s nominees have taken nuanced approaches to climate change in their confirmation hearings, with both his nominee for Secretary of Energy, Chris Wright, and nominee for Secretary of the Interior, Doug Burgum, acknowledging that climate change is real and, in the case of Mr. Wright, worth addressing through technological innovation.  However, both nominees were supportive of using fossil fuels as part of the approach to climate change.  Mr. Wright also stated that natural gas has been the “biggest driver of reducing America’s greenhouse gas emissions” and Mr. Burgum stated that there is technology to “eliminate harmful emissions” from fossil fuels, suggesting that both nominees are bullish on the future of fossil fuels.  While climate-related diplomacy appears poised to mirror approaches from President Trump’s first term, assuming Mr. Wright and Mr. Burgum are confirmed, industry observers will be watching them and other new energy officials for indications regarding how the new administration will approach domestically-driven climate initiatives.

6.     Data Centers & Load Growth

As of the date of publication of this alert, President Trump has not yet released any EOs substantively addressing data centers.  However, on the first day of his second term, President Trump did issue an EO rolling back one of President Biden’s EOs on the use of artificial intelligence (AI) that addressed AI safety and a second EO requiring agency heads to review any actions taken pursuant to that EO.  Despite this rollback, President Trump has acknowledged the importance and energy needs of AI, stating that the U.S. must “more than double up” for its energy capacity for its AI capabilities to remain globally competitive and suggesting that he will prioritize measures that would support the speedy development of energy for AI.  On January 23, 2025, President Trump vocalized support for co-locating data centers and power generation facilities via “behind-the-meter” off-grid arrangements and stated he would work to fast-track regulatory approvals to get generation of all fuel types built to serve data centers.  President Trump’s nominees have also emphasized the importance of AI and the electricity needed to support it.  Chris Wright, nominated for Secretary of Energy, stated that building a new AI industry in the U.S. will require more energy.  Likewise, Doug Burgum, nominated for Secretary of the Interior, similarly underscored the importance of electricity for AI and the need to reform electricity facility permitting processes in order to develop enough energy for the AI industry.  President Trump also championed news from several large tech companies announcing $500 billion in investments in AI infrastructure, including data centers.

Both Presidents Trump and Biden have recognized the importance of supporting the development of AI and data centers and the energy facilities that support them.  The growth of data centers and support for AI infrastructure could prove a consensus issue that presents opportunities for collaboration across the aisle within Congress and with state leaders.  Over the coming months, energy industry observers will be watching for additional changes President Trump makes to previous AI-related EOs as well as new executive, agency, and legislative actions meant to encourage the development of AI and data centers and the electric facilities that support them.

7.     Offshore and Onshore Energy Development

On the first day of his second term, President Trump signed an EO stating that it is the policy of the U.S. “to encourage energy exploration and production on Federal lands and waters, including on the Outer Continental Shelf, in order to meet the needs of our citizens and solidify the [U.S.] as a global energy leader long into the future,” but did not set specific policy priorities or directives in the offshore energy arena.  On the same day, President Trump signed an EO that withdrew all areas of the outer continental shelf from wind energy leasing and directed agency leaders to pause the issuance of new or renewal permits, approvals, leases, rights of way, and loans pending completion of a comprehensive review of federal wind permitting and leasing practices.  Although that EO stated that nothing in it affected the rights of the existing leases in those withdrawn areas, it also directed agencies to conduct reviews of the necessity of “terminating or amending any existing wind energy lease, identifying any legal bases for such removal, and submit a report with recommendations to the President.”  Although the withdrawal of lease areas in that EO focused on offshore leasing, the leasing and permitting pause applies to both offshore and onshore leases.

This EO did not come as a surprise, given that President Trump recently expressed negative views of offshore wind, that President Trump has listed “end[ing] leasing to massive wind farms” as one of his presidential priorities, and that Doug Burgum, President Trump’s nominee for Secretary of the Interior, committed to working quickly to issue leases for oil and gas production but would not commit to continuing leases for offshore wind projects that are already underway.  However, what remains to be seen is what concrete action the Trump administration may take to support offshore drilling and production, whether the Trump administration will attempt to terminate or modify existing wind energy leases based on the recommendations of his agencies, and whether the Trump administration is successful in taking such actions, both of which are likely targets of legal challenges.

President Trump’s views on offshore wind contrast with his bullish views on oil and gas.  Trump has consistently expressed a desire to increase oil drilling on public lands, offer tax breaks to oil, gas, and coal producers, and expedite the approval of natural gas pipelines, all of which are consistent with his statement in his 2025 inaugural address that, “We will drill, baby, drill.”  To that end, President Trump declared a “national energy emergency” in a day one EO focused primarily on supporting the production of fossil fuels.  That order declared that “the United States’ insufficient energy production, transportation, refining, and generation constitutes an unusual and extraordinary threat to our Nation’s economy, national security, and foreign policy” and ordered energy-related agency heads to focus on the “identification, leasing, siting, production, transportation, refining, and generation of domestic energy resources.”  Notably, the EO declaring a national energy emergency excludes wind and solar power from its definition of “energy,”  again signaling a shift in focus toward fossil fuels and nuclear energy.

The Trump administration has also set its focus on resources located in Alaska’s protected federal lands.  President Trump’s EO titled “Unleashing Alaska’s Extraordinary Resource Potential,” which garnered support from Alaska Gov. Mike Dunleavy, calls for modifications to the federal government offices and policies that oversee Alaska’s resource development industry. The order revokes President Biden’s actions that halted oil and gas exploration in the Arctic National Wildlife Refuge.  President Trump previously led a move to allow oil and gas exploration in the refuge during his first term, only for it to be reversed by President Biden. The Alaska-focused EO could open up to 28 million acres of federal Alaska lands to oil and gas development, but it remains to be seen how the industry will react and the extent of development that will result.

Notwithstanding the political interest in development of oil and gas reserves in Alaska, the oil and gas industry will be the ultimate testing ground for these new policies.  Alaska’s North Slope is located far from Asian and lower 48 state markets for the sale of oil and gas. The refuge also has no current infrastructure, like pipelines, to transport oil and gas.  Several major oil companies have exited Alaska and the number of well-funded major companies likely to bid in federal lease sales has reduced.  Energy market watchers thus will be monitoring activities in Alaska to see whether and how energy companies are moving to take advantage of new resource development opportunities.

8.     Liquefied Natural Gas

President Trump reversed the Biden administration’s pause on liquefied natural gas (LNG) permits on day one of his second term by rolling back President Biden’s EO that paused granting LNG export authorizations and issuing an EO directing the Secretary of Energy to “restart reviews of applications for approvals of liquified natural gas export projects,” which the Acting Secretary did the following day.  Further supporting LNG, President Trump also issued another EO (as discussed above) stating that the policy of the U.S. is to “prioritize the development of Alaska’s [LNG] potential” and directing various agencies to revoke or revise regulations from the Biden administration that are inconsistent with this new policy.

President Trump expressed support for LNG on the campaign trail, highlighting his ability to secure environmental approvals for previously stalled LNG plants.  Likewise, President Trump’s nominees have also emphasized the importance of LNG.  President Trump’s pick for the Secretary of Energy, a former executive of a fracking service company, Chris Wright, noted in his opening statement that the U.S. must “expand energy production including commercial nuclear and liquefied natural gas” to compete globally and expressed his support for the development of an LNG export terminal on the Pennsylvania coast near Philadelphia.  Doug Burgum, nominated for Secretary of the Interior, also noted the importance of LNG exports allowing Germany to reopen their base load power plants after the Russo-Ukrainian War began.

Given the pro-LNG statements by President Trump and his nominees, the energy industry will be watching for further executive and agency actions that may attempt to dismantle President Biden’s LNG-related policies and that seek to support the development of additional LNG facilities.

9.     Tariffs and Retaliatory Taxes

President Trump stated in his inaugural address that the U.S. would “tariff and tax foreign countries to enrich [U.S.] citizens.”  He also issued an EO the same day calling on agencies to establish “an External Revenue Service (ERS) to collect tariffs, duties, and other foreign trade-related revenues.”  Prior to his inauguration, President Trump stated that, in addition to the tariffs he planned to put on China, he would be putting “very serious tariffs” on Mexico and Canada, two of the United States’ other largest trading partners, but he has not put those tariffs into place at the time of the publication of this alert.

With respect to retaliatory taxes, President Trump announced a study of (and a request for protective options to address) foreign countries’ current or proposed taxes that are extraterritorial or disproportionately affect American companies, likely aimed at the novel taxes contemplated by the OECD’s framework for reducing tax base erosion and profit shifting by multinational enterprises.  In another executive order, President Trump raised the possibility of applying Section 891 of the Internal Revenue Code (which can double the U.S. tax rate with respect to foreign countries that themselves impose discriminatory or extraterritorial taxes on U.S. persons).

Many predict that tariffs like the ones President Trump has proposed will increase the cost of goods around the world, including the U.S.  Tariffs are especially likely to impact the U.S. energy industry, which relies on other countries for raw materials needed for energy infrastructure, such as China for lithium batteries.  Additionally, countries may retaliate: some countries that have been threatened with U.S. tariffs, such as Canada, have already threatened to cut energy supply to the U.S. if President Trump imposes tariffs on them.  As a result, energy industry observers will be watching for which countries and what goods may become subject to any tariffs that President Trump imposes and what impact that may have on energy markets and energy equipment manufacturing.

10.     Hydrogen Energy

Hydrogen energy, which has benefited significantly from recent DOE actions establishing “hydrogen hubs” for project development and DOE grant and loan opportunities under the Biden administration, is likely to continue to develop as an emerging source of domestic energy, although the federal funding for it is closely tied to DOE programs and laws that President Trump has strongly criticized.  It would be reasonable to expect the Trump administration to have a friendlier approach to blue hydrogen sourced from hydrocarbons than the Biden administration did, but because the DOE’s hydrogen hub and other hydrogen funding initiatives were established under the IRA and BIL umbrellas (see discussion above), some hydrogen funding and development opportunities could be pared back alongside funding for other technologies.  What is clear is that the January 20, 2025, EO halting the disbursement of IRA and BIL funds does not distinguish between funding streams for different technologies.  Thus, hydrogen is, at least as of now, equally impacted by that EO as any other technology that received recent funding commitments from DOE.

President Trump’s campaign focused on supporting domestic energy production, and he has already issued EOs meant to support the energy industry and improve the speed of permitting for energy-related projects, which may extend to hydrogen, although President Trump has rarely addressed the hydrogen energy industry in particular.  Although President Trump has made largely negative comments about hydrogen cars, that is only one very small subset of the hydrogen energy industry at large.  President Trump’s nominees also have not said much on the record regarding hydrogen energy.  When Chris Wright, nominee for the Secretary of Energy, was asked whether he and the Trump administration would “ensure that federal support for hydrogen development does not disadvantage blue hydrogen projects,” he stated that it was “too early” for him to discuss the “trade-offs between different technologies.”  Although there is reason to think that hydrogen energy may find support from the Trump administration and its officials, it is too early to say what form that support might take or how it might depart from the Biden administration’s approach to encouraging the same technology.

Mechanisms for Change

President Trump has a number of avenues available to him to change the rules and policies developed during the Biden administration, including the EOs that he issued on the first day of his second term; urging Congress to repeal legislation, create new legislation, or utilize the Congressional Review Act; and other methods which are discussed in a client alert previously published by Gibson Dunn.

Gibson Dunn attorneys are available to discuss how President Trump’s policies may affect the energy industry and how to navigate the presidential transition.  If you have any questions, please reach out to your attorney contacts at Gibson Dunn or one of the authors of this article.

The following Gibson Dunn lawyers prepared this update: Tory Lauterbach, William R. Hollaway, Ph.D., Matt Donnelly, Janine Durand, and Jess Rollinson.

Gibson Dunn lawyers are available to assist in addressing any questions you may have about these developments. To learn more about these issues, please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm’s Energy Regulation & Litigation, Tax, Cleantech, Oil and Gas, or Power and Renewables practice groups, or the following members of the firm’s Energy/Tax Credits team:

Energy Regulation and Litigation:
William R. Hollaway – Washington, D.C. (+1 202.955.8592, whollaway@gibsondunn.com)
Tory Lauterbach – Washington, D.C. (+1 202.955.8519, tlauterbach@gibsondunn.com)

Tax:
Michael Q. Cannon – Dallas (+1 214.698.3232, mcannon@gibsondunn.com)
Matt Donnelly – Washington, D.C. (+1 202.887.3567, mjdonnelly@gibsondunn.com)
Eric B. Sloan – New York/Washington, D.C. (+1 212.351.2340, esloan@gibsondunn.com)

Cleantech:
John T. Gaffney – New York (+1 212.351.2626, jgaffney@gibsondunn.com)
Daniel S. Alterbaum – New York (+1 212.351.4084, dalterbaum@gibsondunn.com)
Adam Whitehouse – Houston (+1 346.718.6696, awhitehouse@gibsondunn.com)

Oil and Gas:
Michael P. Darden – Houston (+1 346.718.6789, mpdarden@gibsondunn.com)
Rahul D. Vashi – Houston (+1 346.718.6659, rvashi@gibsondunn.com)

Power and Renewables:
Peter J. Hanlon – New York (+1 212.351.2425, phanlon@gibsondunn.com)
Nicholas H. Politan, Jr. – New York (+1 212.351.2616, npolitan@gibsondunn.com)

© 2025 Gibson, Dunn & Crutcher LLP.  All rights reserved.  For contact and other information, please visit us at www.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.

Gibson Dunn understands that the flurry of executive orders and other announcements from the White House during President Trump’s opening days is difficult to follow. To assist, we have taken on the assignment of cataloging and digesting each order as it is announced.

Below, you will find a searchable and filterable list that includes the executive orders and other significant announcements made to date. The list provides a summary of each order and announcement, along with information on the agencies involved and the subject matters covered. It also includes links to in-depth analyses Gibson Dunn has undertaken on a number of the executive orders. The list will be updated promptly upon the issuance of new announcements and orders. If you have any questions about any of the executive orders, please do not hesitate to reach out.

For additional insights, please visit our resource center, Presidential Transition: Legal Perspectives and Industry Trends.