Theane Evangelis was featured on CNN, PBS NewsHour, and ABC News regarding her representation of the City of Grants Pass in the Supreme Court case City of Grants Pass v. Johnson.
James Keshavarz and Charline Yim were featured in the American Bar Association Journal discussing mental health and highlighting strategies that can be used to combat the stigma of mental health.
Read the full article on ABA Journal.
In 9fin’s “Jane’s LME Addiction” podcast, Scott Greenberg discusses the evolution of cooperation agreements within liability management exercises. Scott weighs in on the different types of co-ops, why co-ops have become expected in US deals, their spread to the EU, and the validity of antitrust arguments.
Watch the interview on 9fin.
The Daily Journal reported on a civil rights lawsuit filed by Gibson Dunn, led by partner Lauren Blas on behalf of Microsoft employee Keith Puckett. The suit alleges that El Segundo police unlawfully detained Puckett twice and engaged in racial profiling, citing state-collected data.
Read the full article in the Daily Journal [PDF].
BioWorld reported on a Gibson Dunn report detailing a record $1 billion in False Claims Act settlements for the first half of 2024, with a focus on the growing enforcement of federal cybersecurity requirements. Michael Dziuban, one of the authors of the report, discusses the increasing risks for device makers, the Department of Justice’s cyber-fraud initiative, and legal theories being tested in the cybersecurity space.
Read the full article on BioWorld (subscription required).
Kevin Bettsteller spoke with Private Funds CFO about the future of private funds regulation, focusing on the impact of the vacated SEC Private Funds Rules, best practices for fund sponsors, and the continued emphasis on enhanced reporting standards and SEC enforcement.
Read the full article on Private Funds CFO (subscription required).
Theane Evangelis recently joined the Pacific Research Institute’s (PRI) Next Round podcast to examine the historic decision made in Grants Pass v. Johnson.
Listen to the full episode on PRI.
David Casazza provided insights to Law Week Colorado regarding the significance of the U.S. Supreme Court’s decision in Truck Insurance Exchange v. Kaiser Gypsum Co., highlighting its importance for insurers and the future of mass tort Chapter 11 reorganizations.
Read the full article on Law Week Colorado (subscription required).
More than half of President Joe Biden’s federal appellate court appointments so far were in their 40s or younger when they joined the bench, the highest share for any modern Democratic president, a Bloomberg Law analysis shows.
Picking young judges is a way for presidents to better cement their legacy on the federal court system but can also pave the way for less experienced—and sometimes less vetted—people to secure lifetime positions, former judges and law professors said.
“There is something to be said about the wisdom that comes with a longer term of experience and practice,” said former judge Paul Watford, who was 44 when he joined the US Court of Appeals for the Ninth Circuit. “I don’t see anything good that comes from nominating people to the bench at a very young age, to be frank with you.”
Bloomberg Law’s analysis contains data from the Federal Judicial Center covering judges who received their commissions as of July 16. It shows that while the trend has varied some across administrations, the share of younger judicial picks across the courts has generally grown over time.
Less than a third of John F. Kennedy’s appointments for appellate and trial courts were turning an age younger than 50 the year they became judges, compared to nearly half of those appointed by Biden and Donald Trump, the data shows.
“Pretty much everybody thinks that the reason is that, today, presidents care much more about the ideological predilections of the people on the bench,” said Arthur Hellman, a University of Pittsburgh School of Law professor. And when a president cares about that, “you would like, as part of your legacy, to have judges ruling in that way for as long as possible,” Hellman said.
Roughly 53% of Biden appellate appointees turned 49 or younger during the year they received their commissions, and roughly 21% turned 44 or younger, the data shows.
At trial courts, about 22% of Biden appointees were under 45 when they became judges, a figure higher than recent Democratic presidents.
Biden’s move toward younger judges continues a practice championed by Trump. Nearly two-thirds of the Republican’s appellate judges were 49 or younger the year they received their commission—the highest share of any president in modern history.
But it has marked “a relatively dramatic shift from prior Democratic practice,” said John P. Collins, Jr., a law professor at George Washington University.
For comparison, roughly a quarter of Barack Obama’s circuit picks, and about 38% of Bill Clinton’s circuit judges, were under 50 when they joined the bench.
Just 5% of Obama’s appellate picks, and about 15% of his choices for district seats, were under 45.
Biden’s youngest appointments were Jamar Walker on the Richmond federal trial court and Bradley Garcia on the D.C. Circuit, who both turned 37 the year they became judges.
Trump’s youngest judge was Kathryn Mizelle, who was 33 when she joined the Middle District of Florida.
Trial Courts
Inexperience may be felt more acutely at the district court level, where judges have to make quick solo decisions on evidence presented during trials, former judges and law professors said. At the circuit court, cases are generally heard in panels of three, which allows for a more deliberative process.
Judging on trial courts is “much more about exercising judgment and discretion, where I think experience matters the most,” said Gregg Costa, a former judge on a Texas federal trial court and later on the Fifth Circuit. He was was 39 when he first joined the federal bench.
“You can’t cause damage on your own on the court of appeals. On the district court, in terms of what happens in your courtroom everyday, you’re completely unchecked,” said Costa, an Obama appointee to both courts who’s now in private practice.
Some younger district judges have already generated controversy in a short time.
Judge Aileen Cannon, a Trump appointee who joined the Southern District of Florida when she was in her late thirties, has drawn scrutiny over her handling—and recent dismissal—of criminal charges against Trump over his treatment of classified documents.
Cannon wrote in her Senate questionnaire when nominated that she had tried four cases to verdict in jury trials during her roughly seven years as a prosecutor.
And Joshua Kindred, who was 42 when he became an Alaska federal judge in 2020, recently resigned after he was found by a judiciary council to have sexually harassed his former clerk. Kindred told officials investigating the misconduct he was “overwhelmed with his job,” according to an order detailing the misconduct.
Asked about Kindred’s selection, Sen. Lisa Murkowski (R-Alaska) said this month the Trump administration “was very clear in saying they wanted judges, or they wanted nominees, who were younger.” She also noted Kindred wasn’t highly rated by the Alaska Bar Association, in part because he hadn’t practiced law long and wasn’t “as well-known amongst the broader bar.”
While someone of any age can engage in misconduct, there is a “greater risk” that younger people suddenly tasked with managing the equivalent of a “small law office” could abuse that authority, Costa said.
“With less maturity, I think there is more risk that people abuse the immense power that comes with being a federal judge,” Costa said.
Selecting younger judges can also sometimes mean there is less of a record for senators to vet, said Caroline Fredrickson, a senior fellow at the Brennan Center for Justice, a progressive nonprofit.
“You certainly could have a judge of her age who is competent and interested in following the law,” Fredrickson said, referring to Cannon. “But I think it’s harder to determine when someone is of the mind to be a pure ideologue when they have that much less of a paper trail.”
Michael Waldman, president of the Brennan Center, has called Cannon’s ruling dismissing charges against Trump a “truly radical decision.”
Other Costs
There are some benefits to selecting younger judges. It creates a deeper bench of younger people with years of experience on the bench in the event of a Supreme Court vacancy, said Collins.
Younger judges may also be more “attune to the current culture” and have more energy to handle heavy workloads, Hellman said.
Stiil, former judges said it can come at a cost.
Watford, now in private practice, hadn’t served as a judge before Obama tapped him for the nation’s largest appeals court, and he said he would’ve benefited from more years of experience as an attorney.
He recalled his first few years on the bench were “a little bit overwhelming.” In some cases he heard in his early years as judge, he “would have probably reached a different outcome” had he considered them later in his career “with more wisdom under the belt.”
Dale Ho, who was in his mid 40s when appointed by Biden to the Manhattan federal trial court last year, said at a recent bar association event that it has “been quite a learning curve.” He cited “the cadence of the job, the mechanics of the court, the expectations of litigants in areas that I don’t have a lot of experience in.”
By prioritizing age, presidents could also miss out on potential candidates with years of experience deemed too old.
“I have friends who are interested in being federal judges, and they’re like, ‘Oh, I’m 55, I’m too old now,’” Costa said. “When you’re so focused on age, and they have to be in their 40s, let’s say, you’re eliminating some incredibly talented and experienced lawyers.”
Some younger Obama-appointed judges, like Costa and Watford, have also begun to depart for corporate law firm jobs before they become eligible for retirement, undercutting any potential efforts by presidents to secure the seat for longer
“It should give presidents pause, and I think will give presidents pause, about nominating these younger people because the president wants his or her ideological legacy to extend for as long as possible,” Hellman said.
Reproduced with permission. Copyright July 24, 2024, Bloomberg Industry Group 800-372-1033 https://www.bloombergindustry.com
Featured in the Daily Journal, Julian Poon discusses successfully arguing three appellate cases in one week across California, demonstrating his dedication and enthusiasm for high-stakes litigation.
Read more in the Daily Journal [PDF].
Winston Chan provided Kron4 San Francisco key insights into the FBI’s raid on City of Oakland Mayor Sheng Thao’s home.
Watch the segment on Kron4.
Gibson Dunn has collaborated with the U.S. government on a pioneering AI safety initiative, leveraging its legal and policy expertise to shape regulatory frameworks, industry standards, and risk mitigation strategies—an effort recently highlighted by The American Lawyer.
Read the full article on The American Lawyer [PDF].
In an article for Tax Notes, Eric Sloan discusses the potential legal challenges and implementation issues surrounding the Treasury and IRS’s new guidance aimed at combating abusive related-party basis-shifting transactions.
Read the full article in Tax Notes (subscription required).
Katlin McKelvie discusses the implementation of the Modernization of Cosmetics Regulation Act (MoCRA), its challenges for brands in complying with new FDA regulations, and the changes consumers can expect in the beauty industry over the coming years in a recent episode of The Glossy Beauty Podcast.
Listen to the full episode on Glossy.
Michael Celio and Ashlie Beringer were featured in Lawdragon, reflecting on the firm’s legacy and evolving presence in Silicon Valley, while highlighting the firm’s adaptability, leadership, and expertise in emerging legal fields like AI, cryptocurrency, and cybersecurity.
Read the full interview on Lawdragon [PDF].
The dawn of a new era in crypto regulation was evident during the SEC Crypto Task Force’s inaugural roundtable on March 21, 2025. Crypto enthusiasts and skeptics met to discuss and debate the definition of a “security,” the regulation of digital assets, and the type of “fit-for-purpose” regulatory and disclosure framework that could be developed for such assets.
Crypto & The SEC: A New Era
This inaugural roundtable was part of the SEC’s “Spring Sprint to Crypto Clarity“ series that aims to explore key areas of interest in the regulation of digital assets. Featuring industry supporters and critics alike, the roundtable discussions generally centered on three key issues:
- Understanding how the definition of a “security” under the federal securities laws should be applied to digital assets;
- Development of a new regulatory framework under the federal securities laws applicable to digital assets; and
- Judicial precedents and emerging legislative initiatives that will inform the SEC’s authority and approach, which market participants should bear in mind given the uncertainty that will likely persist in the regulatory environment.
I. The Investment Contract Analysis under the Howey Test
To date, the SEC’s efforts to regulate digital assets have largely pivoted on the application of the “Howey” test in determining whether the digital asset is an “investment contract” and, therefore, a security subject to the federal securities laws.[1] The “investment contract” analysis set forth by the U.S. Supreme Court in SEC v. W.J. Howey requires four elements to be met for an “investment contract” to exist: (i) there is an investment of money (ii) in a common enterprise (iii) with a reasonable expectation of profits (iv) to be derived from the efforts of others.[2] In its 2019 Framework for “Investment Contract” Analysis of Digital Assets (the “Framework”),[3] the SEC Staff emphasized that determining whether a particular digital asset at the time of its offer or sale satisfies the Howey test depends on the specific facts and circumstances, and the inquiry is focused on the “economic realities” of the transaction. In prior years, the SEC has brought numerous crypto-related enforcement actions and civil suits and employed an expansive application of the Howey test to digital assets.
II. The SEC and its Staff Signal a Policy Shift in Application of the Howey Test
The formation of the Crypto Task Force, launch of the inaugural roundtable, and recent SEC staff guidance on meme coins and on proof-of-work mining activities appear to signal a policy shift away from prior years in how the SEC will apply and interpret Howey and the regulation of digital assets.
On February 27, 2025, the Staff of the SEC’s Division of Corporation Finance (the “Staff”) issued guidance on meme coins,[4] indicating that transactions in these digital assets generally do not involve the offer and sale of securities under federal securities laws.[5] The Staff reasoned that purchasers of meme coins make no investment in a common enterprise because their funds “are not pooled together to be deployed by promoters or other third parties for developing the coin or a related enterprise.”[6] Rather, the value of meme coins comes from “speculative trading and the collective sentiment of the market, like a collectible.”[7]
As discussed in Gibson Dunn’s March 21, 2025 Client Alert, on March 20, 2025, the Staff released a statement[8] providing its views on certain activities on proof-of-work (PoW) networks known as “mining.” The Staff stated that the mining activities described in the statement (i.e., “Protocol Mining”) generally do not constitute the offer and sale of securities under the federal securities laws, because the act of Protocol Mining, whether by solo miners or mining pools,[9] does not involve an expectation of profit derived from the entrepreneurial or managerial efforts of others. Rather, the miner’s expectation to receive rewards is “derived from the administrative or ministerial act of Protocol Mining performed by the miner.”[10] As such, rewards are “payments to the miner in exchange for services it provides to the network rather than profits derived from the entrepreneurial or managerial efforts of others.”[11]
Notably, Democrat Commissioner Caroline A. Crenshaw issued statements criticizing both the meme coin and PoW Staff guidance, contending that in both circumstances, the guidance failed to address the need for a facts and circumstances analysis focused on the economic realities of the specific arrangement under the Howey test.
Taken together, the Staff’s position on meme coins and PoW mining activities suggest that market participants may expect a reappraisal of the Howey test from the new SEC and its Staff going forward, one more focused on a common-sense analysis.
III. Key Discussion Points from the Roundtable
Roundtable panelists explored both the challenges and opportunities associated with defining the security status of digital assets, and several important themes emerged:
- Challenges of Applying the Howey Test: Several panelists noted the difficulty of applying the Howey test in a consistent and predictable manner and questioned whether it continues to be responsive to the different mix of risks inherent in the novel technological arrangements that underpin crypto tokens and other digital assets. For example, panelists observed that Howey was decided at a time when information was disseminated in a print format, which gave rise to certain informational asymmetries that the securities laws were designed to address, whereas the same inquiry may not be an effective way of surfacing the relevant risks and other questions about ownership and control that characterize digital assets. Many panelists also argued that in order to be effective, a principles-based regulatory regime needs to recognize that digital assets’ features can vary considerably across different asset classes and change over the life of a particular digital asset. Several panelists suggested that the SEC consider a model based on the concept of control; in their view, where a digital asset’s underlying protocol is sufficiently decentralized, such that it is no longer controlled by individual human actors (such as a founder, promoter, or manager), the trust and risk profiles associated with the system no longer give rise to the information concerns the federal securities laws were designed to address. They advocated that in such cases, the federal securities laws should not apply. Others sounded a more cautionary note, including the view that a test based on control would result in similar line-drawing challenges that arise under Howey and would still depend on a facts and circumstances analysis.
- The SEC’s Jurisdictional Authority: Panelists considered the appropriateness of the SEC’s jurisdictional authority to regulate the digital assets industry relative to other regulatory agencies, such as the Commodity Futures Trading Commission (the “CFTC”), which has jurisdictional authority over digital assets that are commodities and which has been viewed by some as a more appropriate regulator for the industry. In light of many digital assets being marketed to retail investors and other economic realities, one panelist reasoned that, from a policy perspective, the SEC’s investor protection mandate makes it an ideal regulator in certain respects. In contrast, other panelists argued that the SEC should explicitly exempt digital assets from being subject to the federal securities laws.
- A Path to Compliance: Several industry participants noted that many digital asset companies and promoters are eager for clarity in the application of the regulatory framework and a path to compliance. One panelist encouraged the SEC to consider an interim regulatory framework with a built-in sunset that would allow industry participants to opt-in, temporarily, to being regulated while providing the SEC with time and practical experience to refine its approach and work toward notice and comment rulemaking. Another panelist underscored that the Securities Act and the Exchange Act provide broad exemptive authority to the SEC, which the SEC should exercise to narrow the definition of a security to exclude digital assets.
- The Continuing Importance of Judicial Decisions. Several panelists were quick to note that previous SEC enforcement actions as well as state enforcement and private litigation have already produced a significant body of case law applying the Howey test and other securities law concepts to digital assets; these precedents will continue to expose industry participants to uncertainty and litigation risk, particularly post-Loper Bright.[12]
IV. Important Considerations Going Forward
Notwithstanding these SEC developments and the broader policy shifts they may foretell, market participants should bear in mind that existing judicial decisions will continue to serve as precedent for transactions in digital assets and anticipated legislation will ultimately shape the regulatory environment for the industry.
Although the SEC has recently dropped or paused many of its high-profile lawsuits and investigations against major players in the crypto industry, private litigants may continue to rely on judicial decisions in prior SEC enforcement cases, which could continue to expose industry participants to uncertainty and litigation risk.[13]
In addition, many industry commentators expect that under a crypto-friendly administration, the Republican-controlled U.S. Congress will prioritize passing comprehensive legislation aimed at clarifying the regulatory environment around digital assets. Any final legislation will have a significant impact on the industry going forward. Although these developments are in the early stages, key legislative efforts include the following:
- The GENIUS Act: On March 13, 2025, the Senate Banking Committee approved the Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025 (the “GENIUS Act”). The GENIUS Act would establish a comprehensive regulatory framework for the issuance and regulation of “payment stablecoins” in the United States.[14] Importantly, the GENIUS Act would explicitly exclude payment stablecoins from the federal regulatory regimes for securities, commodities, and investment companies, placing qualified payment stablecoin issuers outside the SEC’s regulatory authority, and payment stablecoins would be excluded from the definition of “security” under the federal securities laws.[15] The GENIUS Act is the first digital asset-related legislation approved by a congressional committee in the 119th Congress, and it will now move to the full Senate for consideration, where it is expected to receive bipartisan support.
- FIT 21: Under the previous Congress, on May 22, 2024, the U.S. House of Representatives passed the Financial Innovation and Technology for the 21st Century Act (FIT 21). Key features of FIT 21 include provisions that would remove “investment contracts” that are recorded on a blockchain from the statutory definition of “security” if certain conditions are met. FIT 21 represents an effort by lawmakers to police the boundaries of the Howey test’s application to digital assets and to delineate more clearly the regulatory responsibilities of the SEC and the CFTC. Although FIT 21 was not signed into law, lawmakers have explained that FIT 21 is a starting point for new legislation to be introduced in this Congress.
The roundtable surfaced many of the challenges associated with defining digital assets’ status as “securities,” while clearly demonstrating the need for a pathway to compliance that helps protect both entrepreneurs and investors to the extent the securities laws apply to digital assets. It appears that the SEC will continue to re-assess and clarify its interpretation of the Howey test’s application to digital assets. The SEC also will likely continue its work towards providing a clearer regulatory framework.
Accordingly, while industry participants should expect additional changes in the SEC’s policy and enforcement approach towards digital assets, they should be mindful of legal risks that potentially apply to their current business and strategic plans. Moreover, a reduction in SEC crypto-focused enforcement should not be interpreted as the elimination of litigation risk associated with digital assets, especially given the possible emergence of a significantly more active private civil litigation bar.
Finally, in contrast to the last several years, it appears from the roundtable and the recent Staff guidance that the Staff may be ready for productive engagement and consultation with individual market participants.
[1] The term “security” is defined in Section 2(a)(1) of the Securities Act of 1933, as amended (Securities Act), Section 3(a)(10) of the Securities Exchange Act of 1934, as amended (Exchange Act), Section 2(a)(36) of the Investment Company Act of 1940, and Section 202(a)(18) of the Investment Advisers Act of 1940, and includes the term, “investment contract.”
[2] See SEC v. W.J. Howey Co., 328 U.S. 293 (1946) (“Howey”).
[3] Framework for “Investment Contract” Analysis of Digital Assets (Apr. 3, 2019), https://www.sec.gov/about/divisions-offices/division-corporation-finance/framework-investment-contract-analysis-digital-assets. See also William Hinman, Digital Asset Transactions: When Howey Met Gary (Plastic), Remarks at the Yahoo Finance All Markets Summit: Crypto (Jun. 14, 2018), https://www.sec.gov/news/speech/speech-hinman-061418.
[4] The Staff defined a meme coin as “a type of crypto asset inspired by internet memes, characters, current events, or trends for which the promoter seeks to attract an enthusiastic online community.”
[5] Staff Statement on Meme Coins, Division of Corporation Finance (Feb. 27, 2025), https://www.sec.gov/newsroom/speeches-statements/staff-statement-meme-coins.
[6] Id.
[7] Id.
[8] Statement on Certain Proof-of-Work Mining Activities, Division of Corporation Finance (Mar. 20, 2025), https://www.sec.gov/newsroom/speeches-statements/statement-certain-proof-work-mining-activities-032025?utm_medium=email&utm_source=govdelivery#_ftnref1.
[9] Mining pools are arrangements where computational resources are pooled to increase participating miners’ chances of successfully validating transactions and earning rewards. Mining pools may be administered by a pool operator who typically is responsible for coordinating the miners’ computational resources, maintaining the pool’s mining hardware and software, overseeing the pool’s security measures to protect against theft and cyberattacks, and ensuring that the miners are paid rewards.
[10] Statement on Certain Proof-of-Work Mining Activities, supra note 8.
[11] Id.
[12] See Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), in which the U.S. Supreme Court overruled Chevron v. Natural Resources Defense Council, 467 U.S. 837 (1984), and provided that judges must independently interpret statutes without deference to an agency’s reading of the law.
[13] See, e.g., SEC v. Terraform Labs Pte. Ltd., 2023 WL 8944860 (S.D.N.Y. Dec. 28, 2023); SEC v. Terraform Labs Pte Ltd., 2023 WL 4858299 (S.D.N.Y. July 31, 2023).
[14] The GENIUS Act defines a payment stablecoin as a digital asset that is or is designed to be used as a means of payment or settlement if: (i) the issuer is obligated to convert, redeem, or repurchase for a fixed amount of monetary value; (ii) it will maintain a stable value relative to the value of a fixed amount of monetary value; and (iii) it is not a national currency, bank deposit, interest-bearing instrument, or a security under federal securities laws (other than by virtue of being a bond, note, evidence of indebtedness, or investment contract). GENIUS Act, § 2(15)(A).
[15] Under the GENIUS Act, payment stablecoins would also be excluded from the definition of “commodity” in the Commodity Exchange Act of 1936, and the definition of an “investment company” under the Investment Company Act of 1940.
Gibson Dunn’s lawyers are available to assist with any questions you may have regarding these developments. To learn more, please contact the Gibson Dunn lawyer with whom you usually work in the firm’s Securities Regulation & Corporate Governance or Fintech & Digital Assets practice groups, the authors, or any of the following practice leaders and members:
Securities Regulation and Corporate Governance:
Elizabeth Ising – Washington, D.C. (+1 202.955.8287, eising@gibsondunn.com)
Thomas J. Kim – Washington, D.C. (+1 202.887.3550, tkim@gibsondunn.com)
James J. Moloney – Orange County (+1 949.451.4343, jmoloney@gibsondunn.com)
Lori Zyskowski – New York (+1 212.351.2309, lzyskowski@gibsondunn.com)
Aaron Briggs – San Francisco (+1 415.393.8297, abriggs@gibsondunn.com)
Mellissa Campbell Duru – Washington, D.C. (+1 202.955.8204, mduru@gibsondunn.com)
Brian J. Lane – Washington, D.C. (+1 202.887.3646, blane@gibsondunn.com)
Julia Lapitskaya – New York (+1 212.351.2354, jlapitskaya@gibsondunn.com)
Ronald O. Mueller – Washington, D.C. (+1 202.955.8671, rmueller@gibsondunn.com)
Michael Scanlon – Washington, D.C.(+1 202.887.3668, mscanlon@gibsondunn.com)
Michael A. Titera – Orange County (+1 949.451.4365, mtitera@gibsondunn.com)
Fintech and Digital Assets:
M. Kendall Day – Washington, D.C. (+1 202.955.8220, kday@gibsondunn.com)
Jeffrey L. Steiner – Washington, D.C. (+1 202.887.3632, jsteiner@gibsondunn.com)
Sara K. Weed – Washington, D.C. (+1 202.955.8507, sweed@gibsondunn.com)
Matt Gregory – Washington, D.C. (+1 202.887.3635, mgregory@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.
Adam Smith appeared on PBS NewsHour to discuss the use of frozen Russian assets to fund Ukraine’s defense and its potential impact on global finance.
Watch the full segment on PBS News.
On March 21, 2025, the Financial Crimes Enforcement Network (FinCEN) issued an interim final rule, the “New Reporting Rule,” that removes the requirement for U.S. companies and U.S. persons to report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act (CTA).[1] The New Reporting Rule means that only certain companies, namely those formed under the law of a foreign country and registered to do business in the United States, must file BOI with FinCEN, and even then must only disclose information regarding their non-U.S. beneficial owners. The New Reporting Rule also imposes new deadlines for such foreign companies to file their BOI. FINCEN is also soliciting comments from the public on a permanent rule that the agency intends to adopt later this year.
Non-U.S. Entities that may be subject to the CTA under the New Reporting Rule should consult with their CTA advisors as necessary.
In 2022, FinCEN issued a rule implementing the CTA (the “Prior Rule”). After months of litigation involving the Prior Rule and extensions of the rule’s deadlines for submission of BOI information, on March 2, 2025 the Department of the Treasury announced that it would amend the Prior Rule to limit the scope of companies which must submit BOI.[2] The New Reporting Rule announced on March 21, 2025 is an interim final rule consistent with that objective, clarifying the scope of the reporting obligation and setting new deadlines for companies that must still report.
The New Reporting Rule reflects the change in presidential administrations, and states that the Trump Administration, following its broader deregulatory approach, considers the burdens imposed by the Prior Rule on domestic businesses too onerous to justify the benefits. According to the New Reporting Rule, foreign reporting companies, on the other hand, present heightened national security and illicit finance risks, such that requiring them to report outweighs the associated burdens.
Under the New Reporting Rule, the definition of a “reporting company” that must provide its BOI has been narrowed to include only entities that were previously defined as “foreign reporting companies” under the Prior Rule—i.e., “a corporation, limited liability company, or other entity” which is “[f]ormed under the law of a foreign country” and “[r]egistered to do business in any State or tribal jurisdiction by the filing of a document with a secretary of state or any similar office under the law of that State or Indian tribe.” Companies that previously qualified as “domestic reporting companies” (regardless of where their beneficial owners were located) are no longer encompassed in the term. Additionally, entities that continue to qualify as “reporting companies” need not report any U.S. person who is a “beneficial owner”[3] of such a company, but should submit BOI reports with respect to its non-U.S. beneficial owners. The New Reporting Rule states that if a reporting company only has beneficial owners that are U.S. persons, then the company is exempt from reporting BOI. The New Reporting Rule also creates a special exemption for “foreign pooled investment vehicles”: if such an entity meets the regulatory definition of a reporting company but is operated or advised by a bank, credit union, broker or dealer in securities, investment company or investment adviser, or venture capital fund adviser, (as each is defined in the Prior Rule), it need only provide the beneficial ownership information for a person who exercises “substantial control”[4] over the entity if that individual is not a U.S. person. While not explicitly stated in the interim final rule, the implication is that foreign pooled investment vehicles (e.g. a limited partnership formed in the Cayman islands which is registered in a U.S. state) which are substantially controlled by U.S. persons do not need to report any BOI, including with respect to their non-U.S. beneficial owners.
For any foreign reporting company subject to the requirement to file BOI information, the New Reporting Rule lays out the following deadlines:
- Reporting companies registered to do business in the United States before March 26, 2025[5] must file BOI reports no later than April 25, 2025;
- Reporting companies registered to do business in the United States on or after March 26, 2025 have 30 calendar days to file an initial BOI report after receiving notice that their registration is effective.
Any party interested in filing comments regarding the New Reporting Rule must do so on or before May 25, 2025. Parties should comment on any issue they wish related to the New Reporting Rule. Robust participation in the public comment period will be important to shaping the contours of a permanent, final rule, and will provide an opportunity for interested companies and their trade associations to preserve potential legal challenges to the final reporting rule.
Additionally, the Department of Justice is still defending the constitutionality of the CTA in litigation. That litigation may be affected by the New Reporting Rule, and any court decisions could further affect the scope of the requirement for certain businesses to file BOI.
As drafted, the New Reporting Rule suggests that U.S.-based companies, even if fully controlled by non-U.S. persons, do not need to report BOI information to FinCEN. The New Reporting Rule also does not address what the penalty might be under the New Reporting Rule if an entity is formed outside of the laws of the United States and is required, per the laws of any U.S. State, to be registered with such State, but fails to do so.
For additional background information, please refer to our Client Alerts issued on December 5, December 9, December 16, December 24, and December 27, 2024, January 24, 2025 February 19, February 28, and March 3, 2025.
[1] FinCEN also issued a short press release about the Reporting Rule. https://fincen.gov/news/news-releases/fincen-removes-beneficial-ownership-reporting-requirements-us-companies-and-us.
[2] https://www.gibsondunn.com/cta-update-department-of-the-treasury-announces-suspension-of-enforcement-of-corporate-transparency-act-against-us-citizens-and-domestic-reporting-companies/. For the history of the litigation and Gibson Dunn’s prior client alerts, please see Gibson Dunn’s Corporate Transparency Act Resource Center: Insights and Updates, https://www.gibsondunn.com/corporate-transparency-act-resource-center-insights-and-updates/.
[3] The New Reporting Rule does not disturb the Prior Rule’s definition of beneficial owner, which continues to be defined as “any individual who, directly or indirectly, either exercises substantial control over such reporting company or owns or controls at least 25 percent of the ownership interests of such reporting company.”
[4] The New Reporting Rule does not disturb the Prior Rule’s definition of substantial control, which is a multi-factor test and relates to which individuals make certain types of important decisions for the reporting company, or are deemed to by virtue of their titles.
[5] FinCEN has announced that the New Reporting Rule will be published in the Federal Register, which will trigger the applicable dates, on March 26, 2025.
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.
Theane Evangelis appeared on CBS News Sunday Morning to discuss her role in Grants Pass v. Johnson.
Watch the full segment on CBS News Sunday Morning.
Gibson Dunn’s Texas growth journey, featured in The Texas Lawbook, transformed its Dallas office from a small outpost into a powerhouse with record revenues and significant market presence.
Read the full feature in The Texas Lawbook [PDF].