Sullivan & Cromwell

On April 25, 2024, the U.S. Environmental Protection Agency released final regulations aimed at reducing pollution from fossil fuel-fired power plants, which may have important implications for existing and future carbon capture/sequestration and storage projects in the U.S. A number of ambitious policies focused on such projects have also been proposed in Europe. On April […]

Findings Highlight Differences in Participating Banks’ Approaches and Significant Data and Modeling Challenges SUMMARY On May 9, 2024, the Board of Governors of the Federal Reserve System released a report summarizing the findings of its exploratory Pilot Climate Scenario Analysis Exercise. The Federal Reserve conducted the pilot exercise in 2023 with the six largest U.S. […]

And Enhances Regulatory and Enforcement Focus on National Security Priorities Statute Doubles the Statute of Limitations for Sanctions Violations, Expands the Scope of Sanctions Programs, and Focuses on China’s Technology Procurement, Iranian Petroleum Trafficking, and Fentanyl Production SUMMARY On April 24, President Biden signed into law H.R. 815, a sweeping national security legislative package that—in […]

Key Takeaways 1. Take action now. The first step in managing a crisis should occur before a crisis hits. Ensure the right control systems are in place; identify constituents (your shareholders, employees, customers, regulators) who will need to be informed; define your crisis team and make sure they know your organization. 2. Remember your “North […]

for Public Companies Pending Judicial Review On April 4, 2024, the Securities and Exchange Commission (“SEC”) issued an order (the “Stay Order”) staying its climate-related disclosure rules for public companies (the “Final Rules”) “pending the completion of judicial review” of the petitions challenging the Final Rules filed in six different circuit courts,1 which have been […]

Florida and Tennessee Have ratified Fair Access Statutes; Eight Other States Are Considering Similar Laws SUMMARY An increasing number of states have enacted or are considering enacting legislation requiring financial institutions to provide customers “fair access” to financial services. These fair access requirements, first appearing in Florida’s House Bill 3 (2023) (“FL HB 3”), generally […]

FDIC Proposes Revised Statement of Policy on Bank Mergers Proposal Would Update Long-Standing Statement of Policy to Reflect Subsequent Legislative Developments and to Address “Continued Growth and Consolidation” in the Banking Industry SUMMARY Today, the Federal Deposit Insurance Corporation (the “FDIC”) issued a request for comment (the “RFC” available here) on proposed revisions to its […]

Federal Government Expected to Appeal Decision and Seek a Stay in the Interim On March 1, 2024, the U.S. District Court for the Northern District of Alabama held that the Corporate Transparency Act (“CTA”)—which requires most reporting companies to file a beneficial ownership information report (“BOIR”) with the Financial Crimes Enforcement Network (“FinCEN”)—is unconstitutional as […]

The United States Patent and Trademark Office (“USPTO”) published new Guidance, effective February 13, 2024, on issues arising from the use of artificial intelligence (“AI”) to develop inventions. The Guidance provides clarity for USPTO stakeholders and personnel, including the Central Reexamination Unit and the Patent Trial and Appeal Board (“PTAB”), on how to analyze these […]

Recently, the Delaware Court of Chancery held in Icahn v. Illumina that a director was not permitted to share confidential and privileged information he received in connection with his board service with the activist stockholders that nominated him for election. The case involved a derivative lawsuit brought against Illumina by funds controlled by activist investor […]

Senior M&A Partner Frank Aquila and Global Head of M&A Melissa Sawyer co-authored the article “Anatomy of a Fall: M&A In 2023 and What to Expect in 2024” for the January 2024 edition of The M&A Lawyer. Frank and Melissa explore the challenging conditions M&A faced throughout 2023, including regulatory pressures and global tensions, along with […]

In this episode of S&C’s Critical Insights, Michelle Chen, a partner in S&C’s Financial Services Group, and June Hu, special counsel in the Firm’s General Practice Group, provide key takeaways for financial institutions as they navigate environmental, social and governance considerations in 2024. Michelle and June review key ESG developments in 2023, noting a trend of […]

Court of Chancery Holds Controlling Stockholders May Owe Fiduciary Duties When Voting to Change Status Quo or Selling Their Shares On January 24, 2024, the Delaware Court of Chancery held in re Sears Hometown and Outlet Stores, Inc. Stockholder Litigation that when a controller affirmatively sells stock or exercises its voting power to alter a […]

Acting Comptroller of the Currency Announces Proposed Rulemaking Regarding Bank Mergers Proposed Rule to Eliminate the Availability of Automatic Expedited Approvals and Streamlined Applications for Bank Mergers On January 29, 2024, Acting Comptroller of the Currency Michael Hsu spoke at the University of Michigan Stephen M. Ross School of Business on “What Should the U.S. […]

The US Inflation Reduction Act of 2022 (the “IRA”) established a credit Section 45X of the Internal Revenue Code for the US production and sale of eligible components of clean energy  technologies, which include qualifying solar energy components (such as solar modules and photovoltaic cells), wind energy components (such as blades, nacelles, towers, offshore wind […]

In this episode of S&C’s Critical Insights, Marc Treviño and Melissa Sawyer, Co-Heads of S&C’s Corporate Governance Practice, discuss corporate governance developments and what to expect in 2024. Marc and Melissa explore the ongoing trend of increased shareholder proposals focused on environmental, social and political topics and touch on ESG as it relates to the broader […]

Proposal Would Subject at Least 17 “Larger” Providers of General-Use Digital Consumer Payment Applications to CFPB Supervision On November 7, the Consumer Financial Protection Bureau released a proposed rule that would expand the CFPB’s supervisory and examination authority to cover, for the first time, “larger” providers of general-use digital consumer payment applications. Under the proposal, […]

In a November 15 opinion in YA Global Investments LP v. Commissioner, the Tax Court ruled that a Cayman Islands hedge fund was engaged in a U.S. trade or business through an agency relationship with its US-based manager, and that its operations were not covered by the investment exception or the securities trading safe harbor as the fund […]

SB 253, SB 261 and AB 1305 Require Public and Private Companies Doing Business in California to Disclose Greenhouse Gas Emissions (Including Scope 3), Climate Risks and Use of Voluntary Carbon Offsets On October 7, 2023, California Governor Gavin Newsom signed into law the Climate Corporate Data Accountability Act (SB 253), the Climate-Related Financial Risk […]

New Safe Harbor Policy for Voluntary Self-Disclosures Made in Connection With Mergers and Acquisitions Deputy Attorney General Lisa Monaco Announces Additional Incentives for Acquiring Companies to Voluntarily Disclose and Remediate Misconduct Identified at Acquired Companies On October 4, 2023, the U.S. Department of Justice announced a new “Safe Harbor Policy” providing that acquiring companies can […]

SUMMARY On September 29, 2023, the Securities and Exchange Commission (the “SEC”) proposed a rule and certain form amendments (the “Proposal”) to provide a tailored disclosure form for offerings of registered index linked annuities (“RILAs”).1 The SEC issued this Proposal to implement the requirements of Division AA, Title I of the Consolidated Appropriations Act, 2023 […]

SB 253, SB 261 and AB 1305 Require Public and Private Companies Doing Business in California to Disclose Greenhouse Gas Emissions (Including Scope 3), Climate Risks and Use of Voluntary Carbon Offsets On October 7, 2023, California Governor Gavin Newsom signed into law the Climate Corporate Data Accountability Act (SB 253), the Climate-Related Financial Risk […]

Here we highlight key recent developments in environmental, social and governance matters of relevance to public and private companies globally. For more information on this evolving business and legal landscape, we encourage you to reach out to our ESG practice website. Key Developments ISSB’s IFRS S1 and IFRS S2 standards continue to gain momentum. In […]

On September 6, 2023, New York Governor Kathy Hochul signed a bill into law that amends the criminal larceny law to include wage theft. The amendment goes into effect immediately. This legislative action follows a February 16, 2023 announcement by the Manhattan District Attorney Office that it had partnered with the New York State Department […]

Policy Statement Sets Out a List of Examples of Practices the FTC Will Scrutinize to Determine Whether Companies Using Biometric Information Comply with Section 5 of the FTC Act SUMMARY On May 18, 2023, the Federal Trade Commission (the “FTC”), by a 3-to-0 vote, published a policy statement (the “Policy Statement”) on biometric information and […]

Connor Schillerstrom from our Sydney office, John Anselmi from our Melbourne office and Sam Saunders from our New York office discuss how Australia and the United States are working together to address climate change. Connor, John and Sam provide insight on how Australia might benefit from the Australia-United States Climate, Critical Minerals and Clean Energy […]

Proposed Rule Represents Continued Trend Toward Increasing Prudential Requirements for Non-GSIB Banking Organizations with $100 Billion or More in Total Assets On August 29, 2023, the Federal Reserve, the FDIC, and the OCC (the “Agencies”) issued a proposed rule that would require certain depository institution holding companies, certain U.S. intermediate holding companies (“IHCs”) of foreign […]

SUMMARY On July 31, 2023, the IRS issued Revenue Ruling 2023-14 (the “Ruling”), addressing the tax treatment of cryptocurrency received as rewards for validating blockchain transactions on a proof-of-stake consensus mechanism (such activity, “staking”, and such rewards, “validation rewards”). The Ruling holds that the validation rewards are includible as gross income when the taxpayer can […]

Key Developments Delaware court finds corporate speech on public policy issues within business judgment. The Delaware Court of Chancery has held in Simeone v. The Walt Disney Company that a stockholder’s disagreement with a corporation’s decision to speak on public policy did not constitute a “proper purpose” for making a books and records demand under Delaware law. This decision […]

Amendments Would Require Daily Computation of Customer and Broker-Dealer Reserve Requirements On July 12, 2023, the Securities and Exchange Commission proposed to amend Exchange Act Rule 15c3-3 to require certain larger carrying broker-dealers to perform reserve account computations on a daily basis.  Specifically, the amendments would require a carrying broker-dealer that reports total credits in […]

The Fiscal Responsibility Act of 2023 Streamlines Environmental Review Under the National Environmental Policy Act and Provides for Accelerated Permitting of Energy Storage Projects SUMMARY On June 3, 2023, President Biden signed the Fiscal Responsibility Act (“FRA”) into law. The FRA suspends the $31.4 trillion debt ceiling until January 1, 2025, and provides, inter alia, […]

Proposed Changes Would Add Significant Cost and Threaten to Delay All Transactions Requiring Premerger Filings Under the HSR Act On June 27, the FTC proposed the first major changes to the HSR Form and Instructions since 1978. The proposed changes would add significant cost and threaten to delay all transactions requiring premerger filings under the […]

An Arbitral Award Creditor May Be Entitled to RICO’s Treble Damages Where an Award Debtor Attempts to Evade Enforcement of an Arbitral Award On June 22, the Supreme Court affirmed a Ninth Circuit ruling that a non-U.S. arbitral award creditor had adequately pled “domestic injury” in a civil RICO lawsuit. After an arbitral award debtor […]

This memorandum highlights key recent developments in environmental, social and governance matters of relevance to companies globally. Key Developments The Biden Administration continues to move forward with clean energy-related legislation and international initiatives. In June, the U.S. enacted revised procedures for environmental reviews aimed at streamlining the permitting process for major energy projects, entered into […]

A Leg to Stand on — Key Takeaways for Bondholders Seeking Direct Action Following the Cayman Grand Court Decision in Shinsun Holdings SUMMARY In the recent decision of Re Shinsun Holdings (Group) Co., Ltd. FSD 192 of 2022 (DDJ) (21 April 2023) (unreported), the ultimate beneficial owner of bonds held through Euroclear failed to evidence […]

In recent months, Florida and several other states enacted or proposed “anti-ESG” laws or policies, including those that are intended to restrict state funds from considering ESG factors in their investment decisions and/or to deter companies from “boycotting” on the basis of ESG factors. On the other hand, states such as California and New York […]

On April 26, 2023, the Federal Deposit Insurance Corporation (the “FDIC”) and the Office of the Comptroller of the Currency (the “OCC”) simultaneously issued new guidance to banks concerning Authorize Positive, Settle Negative (“APSN”) transactions and related overdraft and other fees. Many banks historically have assessed APSN overdraft fees when a transaction was authorized against […]

On May 2, Florida enacted a wide-ranging “anti-ESG” law, which will become effective on July 1. Among other requirements, the law requires that all investment decisions regarding Florida state money be based “solely on pecuniary factors”, and prohibits state and local governments from issuing ESG bonds or considering ESG in their procurement and contracting process. In […]

Revisions Focus on Banks That Exhibit “Persistent Weaknesses” and Further Remarks Addressing the “Too Big to Manage” Problem On May 25, the OCC issued a revised version of its policies and procedures regarding bank enforcement actions. The revisions, which are found in a new Appendix C, address the OCC’s consideration of supervisory and enforcement actions […]

On March 31, 2023, the Organisation for Economic Co-operation and Development (the “OECD”) announced that a landmark modernisation package reforming the Arrangement on Officially Supported Export Credits (the “Arrangement”) had been agreed in principle by the participating countries. The Arrangement is self-described as a “gentlemen’s agreement” among its participants – Australia, Canada, the European Union, […]

ISSB announces transitional relief for Scope 3 and sustainability-related disclosures and prepares to consult on future projects, including amendments to SASB Standards. The International Sustainability Standards Board (ISSB), which is finalizing standards for disclosure of climate- and sustainability-related financial information, announced that companies will have one-year transitional relief from Scope 3 and non-climate sustainability-related disclosure […]

Spring 2023 Update on the NAIC Initiative Applicable (but Not Exclusive) to Private Equity Ownership of Insurers and Insurer Investment Practices In August 2022, the National Association of Insurance Commissioners (NAIC) adopted a list of 13 regulatory considerations, constituting its action plan for addressing state insurance regulators’ concerns related to the increasing number of U.S. […]

Borrowers and lenders entering into loan transactions that are marketed or intended to qualify as ESG loan transactions from March 9 onwards will likely be expected to align with recent updates to the Green Loan Principles, Social Loan Principles and Sustainability-Linked Loan Principles (collectively, the “2023 Principles”) developed by the Loan Market Association (“LMA”), Loan […]

David Rein and Eric Andrews Author Article on Civil Litigation Risks for Non-U.S. Companies Listed in the United States for Financier Worldwide David Rein, Deputy Managing Partner of S&C’s Litigation Group, and Eric Andrews, a litigation associate, authored an article for Financier Worldwide, “Key Litigation Risks and Mitigation Strategies for non-US Companies Listed in the US.” The […]

Introduction of New Due Diligence Obligations on ESG Matters That May Affect German Companies and International Organizations Based on Their Business Activities in Germany SUMMARY On January 1, 2023, the German Act on Corporate Due Diligence Obligations in Supply Chains (Lieferkettensorgfaltspflichtengesetz – the “Act”) came into effect. The Act requires certain German companies and foreign […]

Review of Significant ESG Developments and Additional Considerations for 2023 As U.S. financial institutions assess their ESG risks, opportunities, policies and procedures for 2023, key considerations include the numerous significant ESG developments in 2022—in particular, recent proposals and initiatives announced by financial regulators with respect to climate-related risk management and disclosures—and overarching regulatory, political, investor […]

Corporate Sustainability Reporting Directive Will Apply to Public and Private Companies, Including Many Non-EU Companies SUMMARY The European Union has finalized the Corporate Sustainability Reporting Directive (“CSRD”) that will introduce more detailed sustainability reporting requirements for EU companies, non-EU companies meeting certain thresholds for net turnover in the EU and companies with securities listed on […]

Senior M&A Partner Frank Aquila spoke to Reuters about the outlook for M&A activity in 2023 given the market turndown in 2022. Frank said he expected an uptick in cross-border M&A activity. “It is likely that we are going to see significant M&A activity in the U.S. in 2023; not only U.S. companies making acquisitions, but also […]

The SEC’s Proposed Rules Would Result in the Most Fundamental Changes to Securities Trading and Market Structure Regulation Since Regulation NMS In 2005. On December 14, the SEC voted to propose new rules and rule amendments relating to four aspects of U.S. equity market structure: (1) a new proposed rule under Reg NMS regarding order […]