Lauren Guzman

Lawdragon~~Lawdragon has named 32 Gibson Dunn lawyers to its list of 500 Global Leaders in Crisis Management. The publication calls these lawyers “the advisors who are the legal world’s emergency responders – when investigators turn their eye to a client, a deal attracts activist activity or an industry goes under the relentless microscope of a class action.”~~Congratulations to: Matt Axelrod, Amanda Aycock, Matt Benjamin, Ryan Bergsieker, Barry Berke, Robert Blume, Michael Bopp, Ted Boutrous, Reed Brodsky, Stephanie Brooker, David Burns, John Chesley, Jina Choi, Collin Cox, Lee Crain, M. Kendall Day, Stuart Delery, Mylan Denerstein, Michael Dore, Patrick Doris, Theane Evangelis, Douglas Fuchs, Brian Gilchrist, Nicola Hanna, Sacha Harber-Kelly, Dani James, Christopher Joralemon, Michael Martinez, Karin Portlock, Orin Snyder, Maurice Suh, and Debra Wong Yang.~~Download PDF~~

Feb 27

1 min

In re BioAge Labs, Inc., Securities Litigation, No. 25-cv-00196, 2025 WL 3038991 (N.D. Cal. Oct. 30, 2025)~~Case Highlights~~In October 2025, a federal district court dismissed securities claims against a biopharmaceutical company, BioAge Labs, Inc., arising from disclosures in connection with its initial public offering (IPO) concerning the safety of the company’s lead drug candidate, azelaprag, which was intended to facilitate weight loss by mimicking the physiological effects of exercise. The court held that the plaintiff failed to plausibly allege that BioAge’s IPO offering documents were misleading because they omitted discussion of a potential liver-related safety risk.~~At the time of the IPO, BioAge was conducting a Phase 2 clinical trial of azelaprag. Approximately nine weeks after the IPO, BioAge discontinued the trial after 11 participants who received azelaprag developed transaminitis—elevated liver enzyme levels that can indicate injury to the liver. Following that announcement, BioAge’s stock price dropped, and investors brought a  class action under Sections 11 and 15 of the Securities Act of 1933.~~The plaintiff alleged that BioAge’s IPO offering documents were misleading because they failed to disclose that transaminitis posed a serious risk to the development and commercialization of azelaprag.  Specifically, the plaintiff claimed that transaminitis was “virtually certain” to occur in the Phase 2 trial because a single patient in an earlier, Phase 1 trial experienced transaminitis and, therefore, it was not possible to accurately discuss the risk that side effects of azelaprag might derail the drug’s prospects without expressly disclosing the risk posed by transaminitis.~~The court disagreed, identifying both legal and factual deficiencies in the complaint.~~First , as a matter of law, the court emphasized that Section 11 does not impose a freestanding duty to disclose all material risks. Here, the plaintiff did not identify any statement in which BioAge affirmatively downplayed or mischaracterized the risk of transaminitis. Instead, the plaintiff argued that by discussing the general risk of adverse events, BioAge implicitly represented that no “expected” or “typical” safety risks existed. The court rejected this argument, holding that a company does not assume an obligation to disclose every conceivable safety signal merely because it elects to discuss clinical trial risks in general terms.~~Second , the court found that the plaintiff failed to plausibly allege that transaminitis was “inevitable” at the time of the IPO. The complaint relied heavily on non-serious liver enzyme elevation in one of 265 participants across eight Phase 1 trials, which resolved without treatment and did not disrupt development. The court held that this isolated observation did not establish a trend, much less make liver toxicity “virtually certain” to derail Phase 2 testing. The complaint also pointed to the fact that BioAge tracked liver enzyme levels in mice that were dosed with azelaprag in a 27-week mouse study. But the court found that study actually showed that azelaprag lowered liver enzyme levels, and nothing in the mouse study would have indicated that transaminitis was inevitable.~~Key Takeaways~~BioAge provides helpful guidance on a pharmaceutical company’s obligation to disclose drug-safety risks, particularly when reporting clinical trial results. The decision underscores that the omission of isolated adverse events may not, standing alone, render otherwise accurate descriptions of general trial risks and outcomes misleading. At the same time, BioAge serves as a reminder that once a company elects to speak about a specific risk, it assumes a duty to disclose additional context to avoid providing investors with “half-truths.” Importantly, the more serious and prevalent the undisclosed safety risk, the more likely it is that general statements about clinical trial risks may be rendered misleading. This is particularly so under Section 11, where Items 105 and 303 of Regulation S-K impose affirmative disclosure obligations regarding known trends, uncertainties, and material risk factors. Companies should carefully calibrate their risk disclosures with these principles in mind and consult experienced counsel when drafting public statements about drug development programs and observed safety events.~~This newsletter has been prepared by the Life Sciences and Securities Litigation teams of Gibson Dunn. For further information, please contact the Gibson Dunn lawyer with whom you usually work, or any of us by email:~~Life Sciences: Ryan Murr – Co-Chair, San Francisco (rmurr@gibsondunn.com) Branden Berns – San Francisco (bberns@gibsondunn.com) Melanie Neary – San Francisco (mneary@gibsondunn.com)~~Securities Litigation: Jessica Valenzuela – Palo Alto (jvalenzuela@gibsondunn.com) Jeff Lombard – Palo Alto (jlombard@gibsondunn.com) Monica Loseman – Co-Chair, Denver, New York (mloseman@gibsondunn.com) Brian Lutz – Co-Chair, San Francisco (blutz@gibsondunn.com) Jason J. Mendro – Co-Chair, Washington, D.C. (jmendro@gibsondunn.com) Craig Varnen – Co-Chair, Los Angeles (cvarnen@gibsondunn.com)~~Gibson Dunn associates Zaneta Kim and Celina Jackson also contributed to this update.~~© 2026 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.~~Download PDF~~

Mar 3

4 min

Sea Change, Shifting Priorities, Back to Basics~~I.  A New Day in SEC Enforcement:  Sea Change in Crypto Enforcement, Shifting Priorities, Dismissals and Back to Basics Enforcement~~As predicted in our Securities Enforcement 2024 Year-End Update, the first half of 2025 ushered in a newly constituted Securities and Exchange Commission and a new Chairman with new priorities that resulted in sweeping changes at the agency and its enforcement agenda.  After a flurry of enforcement activity in early January before the inauguration of President Trump and resignation of then-SEC Chairman Gary Gensler, acting Chairman Mark Uyeda led a three-member, Republican-controlled Commission from mid-January until Chairman Paul Atkins was sworn in on April 21, 2025.  Chairman Atkins came in with a wealth of experience at the Commission, having served as a Commissioner of the SEC from 2002 to 2008 as well as serving on the staff of two former chairmen.  Interestingly, in returning to the Commission, Chairman Atkins is now working with his own former counsel, Commissioners Mark Uyeda and Hester Pierce, who both served on his staff while he was a commissioner in the early 2000s and largely share the Chairman’s view on regulation.  It is rare, at least in recent memory, to see such close alignment on the commission.~~A.  A Sea Change in Crypto Enforcement~~Before Chairman Atkins took the helm, Commissioner Mark Uyeda was appointed the Acting Chairman and immediately implemented changes at the Commission, notably with regard to the regulation of crypto assets.  Days after the change in administration, on January 21, 2025, Acting Chairman Uyeda announced the formation of the Crypto Task Force, which is dedicated to helping develop a comprehensive and clear regulatory framework for crypto assets, and named fellow Republican Commissioner Hester Pierce, also known as “Crypto Mom,” to lead the task force.  The announcement of the task force specifically called out the prior Commission that had “relied primarily on enforcement actions to regulate crypto retroactively and reactively, often adopting novel and untested legal interpretations along the way.”~~A month later, on February 20, 2025, to complement the work of the Crypto Task Force, the SEC announced the creation of the Cyber and Emerging Technologies Unit (CETU) to replace the Crypto Assets and Cyber Unit, which had been given additional resources and brought a host of enforcement action in the prior administration.  The newly announced CETU trimmed the number of attorneys dedicated to crypto enforcement and was established “to deploy enforcement resources judiciously.”~~In the weeks following the creation of the Crypto Task Force and the CETU, several enforcement actions that had been filed in the previous administration were dismissed, citing the Commission’s exercise of its “discretion” and “its judgment that the dismissal will facilitate the Commission’s ongoing efforts to reform and renew its regulatory approach to the crypto industry, not on any assessment of the merits of the claims alleged in the action.”[1]  And several crypto and digital asset platforms and exchanges announced that they had heard from the SEC that it had closed ongoing investigations without taking action, including some who had received Wells notices during the prior administration.[2]~~B.  A New Day at the SEC~~On May 6, 2025, Chairman Atkins made opening remarks addressing the staff in his first “town hall” meeting announcing a return to the SEC’s core mission and emphasizing that “Investor protection is the cornerstone of our mission – to hold accountable those who lie, cheat and steal.”  In alluding to the Commission’s enforcement program, Chairman Atkins highlighted the values of “[p]redictability, due process, rule of law, integrity” and “project[ing] a sense that one can get a fair shake without vindictiveness or ulterior motives.”  In his remarks, Chairman Atkins acknowledged that the agency’s headcount was down 15% from the beginning of FY2025, with approximately 4,200 employees and 1,700 contractors down from approximately 5,000 employees plus 2,000 contractors at its height in spring of 2024.  He also announced a dedication to the regional offices, from which the majority of enforcement and examination staff work:  “Let me say unequivocally that I firmly believe in our regional office concept.  We cannot and should not have everyone in Washington and New York.”~~C.  Shifting Priorities~~In line with our predictions at the end of 2024, the SEC has shifted its enforcement priorities.  While several agency director appointments have been made, the Division of Enforcement remains under acting leadership who remarked in May that notwithstanding structural and process changes, the Division’s work continues.  Stated priorities include insider trading, accounting and disclosure fraud, offering fraud, market manipulation and breaches of fiduciary duty.~~1. Specialized Units~~In addition to reorganizing and renaming the Crypto Assets and Cyber Unit as set forth above, other structural changes were made in the Division including with respect to units, which now have a new deputy director for all units.  Along with these changes, the FCPA Unit is no longer listed as a specialized unit after the retirement of unit leadership earlier this year.  Although the pause has since been lifted, given President Trump’s February 10, 2025 Executive Order temporarily suspending enforcement of the FCPA and directing the Attorney General to reevaluate existing investigations and enforcement, there were no new FCPA enforcement actions filed by DOJ or SEC in the first half of 2025.  A closely watched, ongoing FCPA case against the President and Chief Legal Officer of a public information technology company for alleged bribery to an Indian government official, which was originally charged in 2019, was set for trial on the criminal charges in the early days of the Trump administration.  In early April 2025, the DOJ moved to dismiss its case against the executives, citing the February 10, 2025 Executive Order, and the next day the court granted the order and dismissed the case with prejudice.[3]  On July 15, 2025, the SEC announced filing a joint stipulation to similarly dismiss its case against the defendants with prejudice.~~2. Dismissals of Controls and Registration Cases~~In line with Chairman Atkins’ stated priority of holding accountable those who lie, cheat and steal, the Commission dismissed certain cases that involved alleged controls and registration violations, without alleging fraudulent conduct.~~On April 4, 2025, the Commission announced that it filed a joint stipulation to dismiss its case, with prejudice, against a registered investment adviser for failing to establish, implement and enforce written policies and procedures reasonably designed to prevent the misuse of material nonpublic information.  The case, which was charged on December 20, 2024, alleged violations of Section 204A and 206(4) of the Investment Advisers Act of 1940.[4]~~On June 18, 2025, the Commission announced that it was moving to dismiss, with prejudice, three separate cases involving three groups of defendants that were charged with violations of Section 15(a) of the Securities and Exchange Act of 1934—failing to register as a dealer.  In all three stipulations, the Commission stated its belief that dismissal was appropriate “in the exercise of its discretion and as a policy matter” and that the decision to dismiss “does not necessarily reflect the Commission’s position on any other case.”[5]~~3. Cyberbreach Disclosure Cases~~After several disclosure and controls cases were brought by the Commission under Chairman Gary Gensler against public companies who were victims of a cyberbreach, and last year’s dismissal by a federal district court of much of the SEC’s SolarWinds complaint,[6] there were no new cyberbreach disclosure cases filed by the Commission in the first half of 2025.  In fact, on July 2, 2025, the SEC and the defendants in SolarWinds sent a letter to the court setting forth that they had reached a settlement in principle that would completely resolve the litigation.[7]  This may evidence the new Commission’s position on cyberbreach disclosure enforcement and its potential return to its earlier mantra:  “We do not second-guess good faith exercises of judgment about cyber-incident disclosure.”[8]~~D.  Back-to-Basics Enforcement~~Since the inauguration, the Commission has brought cases that reflect a return to “back to basics” enforcement that include charges of fraud and allegations of “lying, cheating and stealing.”  It brought several actions involving large-scale offering frauds, including in the crypto space, a handful of cases involving public company reporting and disclosure, as well as cases against investment advisers and broker dealers involving fraud.  The SEC also brought cases in traditional areas like municipal bond fraud, insider trading, and market manipulation.~~II.  Large Scale Fraud~~As anticipated, SEC enforcement focused heavily on offering fraud, with the following notable actions involving significantly high monetary amounts, and/or impacting numerous investors.~~III.  Cryptocurrency and Other Digital Assets~~With the formation of the Crypto Task Force led by Commissioner Hester Peirce, cryptocurrency-related enforcement actions overall subsided and focused more on fraudulent schemes involving crypto.  Here are two notable actions filed:~~IV.  Public Company Accounting, Financial Reporting, and Disclosure~~The SEC slowed accounting-, reporting-, and disclosure-related enforcement against public companies following the presidential inauguration, and the resulting penalty amounts were significantly lower than in past years.  The most notable actions that the Commission brought in this space tended to focus on disclosures in the pharmaceutical industry or accountant conduct that resulted in bars to practice before the Commission pursuant to Rule 102(e) of the Commission’s Rules of Practice (Rule 102(e)).~~V.  Investment Advisers~~Investment advisers remain one of the most heavily regulated market participants.  Many of the related actions either involved alleged fraud, and or were brought against individual representatives and officers of investment adviser firms, emphasizing the SEC’s focus on fraud and individual accountability.  Notably, there were no enforcement actions in the first half of 2025 for violations of the recordkeeping provisions due to failure to maintain and preserve electronic communications, representing a noticeable shift in enforcement priorities.~~VI.  Broker-Dealers~~VII.  Market Manipulation~~VIII.  Municipal Bond Fraud~~IX.  Insider Trading~~Despite speculation that enforcement would increase with respect to insider trading or mishandling of material nonpublic information (MNPI), the Commission’s enforcement in this space was relatively slower than typical in the first half of 2025.  Interestingly, in two criminal insider trading cases brought by the U.S. Attorney’s Office in the Southern District of New York, the SEC was acknowledged and thanked in the press releases issued by SDNY but no parallel SEC cases were filed.[35]~~X.  Whistleblowers Awards~~In April, the SEC announced an award of about $6 million to joint whistleblowers who provided information that led to a covered enforcement action.[40]  According to the SEC order, the joint whistleblowers provided original information that caused the Commission’s Division of Examinations to open an exam which ultimately provided the Enforcement Staff with a “roadmap” to the investigation underlying the enforcement action.~~XI.  Senior Staffing Updates~~As we covered during the 2024 Year-End Update, there were myriad senior staffing changes at the Commission in sync with the change in presidential administration, including most notably the nomination of Paul Atkins as the new Chairman—who was sworn-in in April as the 34th Chairman of the SEC,[41] the selection of Mark Uyeda as Acting Chairman for the interim period of Atkins’ confirmation, and the selection of Samuel Waldon as the Acting Director of the Enforcement Division.  Staffing changes and updates continued after the inauguration, reflecting an emphasis on the recruitment of practiced experts with private sector, legislative, and regulatory experience.~~[1] SEC Press Release, SEC Announces Dismissal of Civil Enforcement Action Against Coinbase (Feb. 27, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-47; SEC Litigation Release, SEC Announces Dismissal of Civil Enforcement Action Against Cumberland (Mar. 27, 2025), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26276; SEC Litigation Release, SEC Announces Dismissal of Civil Enforcement Action Against Consensys Software Inc. (Mar. 27, 2025), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26277; SEC Litigation Release, SEC Announces Dismissal of Civil Enforcement Action Against Kraken (Mar. 27, 2025), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26278.~~[2] E.g., Robinhood, SEC Closes Investigation Into Robinhood Crypto with No Action (Feb. 24, 2025), available at https://newsroom.aboutrobinhood.com/sec-closes-investigation-into-robinhood-crypto-with-no-action/.~~[3] See Gibson Dunn’s FCPA Update: 2024 & Q1 2025 Developments.~~[4] Osman Nawaz, et al., Predicting What’s Next For SEC By Looking At Past Dissents, Law 360 (Jan. 6, 2025), available at https://www.gibsondunn.com/wp-content/uploads/2025/01/Nawaz-Zimmerman-Ulmer-Predicting-Whats-Next-For-SEC-By-Looking-At-Past-Dissents-Law360-1-6-25.pdf.~~[5] E.g., SEC v. John M. Fife, et al., Stipulation to Dismiss and Release (June 18, 2025), available at https://www.sec.gov/files/litigation/litreleases/2025/stip26330-fife.pdf.~~[6] See Gibson Dunn Client Alert: Dismissal of Much of SEC’s SolarWinds Complaint Has Potentially Broad Implications for SEC Cybersecurity Enforcement.~~[7] Jessica Corso, SEC Strikes Deal With SolarWinds In Data Breach Case, Law 360 (July 2, 2025), available at https://www.law360.com/articles/2360384/sec-strikes-deal-with-solarwinds-in-data-breach-case.~~[8] SEC Press Release, Altaba, Formerly Known as Yahoo!, Charged With Failing to Disclose Massive Cybersecurity Breach; Agrees To Pay $35 Million (Apr. 24, 2018), available at https://www.sec.gov/newsroom/press-releases/2018-71.~~[9] SEC Litigation Release, SEC Charges New York-Based Commercial Real Estate Firm and its Owner with Using an Internet Funding Platform to Steal Over $52 Million from Investors Nationwide (Feb. 21, 2025), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26254.~~[10] SEC Litigation Release, SEC Charges Washington, D.C. Real Estate Developer And Twenty-Seven Companies With Negligently Misleading Investors (Mar. 10, 2025), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26263.~~[11] SEC Litigation Release, SEC Charges Founder and Former CEO of Artificial Intelligence Startup with Misleading Investors (Apr. 11, 2025), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26282.~~[12] DOJ Press Release, Tech CEO Charged In Artificial Intelligence Investment Fraud Scheme (Apr. 9, 2025), available at https://www.justice.gov/usao-sdny/pr/tech-ceo-charged-artificial-intelligence-investment-fraud-scheme.~~[13] SEC Litigation Release, SEC Charges Former CFO of Real Estate Development Company with Participating in a $93 Million Fraud Scheme (Apr. 28, 2025), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26293.~~[14] SEC Press Release, SEC Charges Three Texans with Defrauding Investors in $91 Million Ponzi Scheme (Apr. 29, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-71.~~[15] SEC Press Release, SEC Charges Former Real Estate Investment CEO With Operating Multimillion Dollar Ponzi-Like Scheme (May 22, 2025), available at  https://www.sec.gov/newsroom/press-releases/2025-76-sec-charges-former-real-estate-investment-ceo-operating-multimillion-dollar-ponzi-scheme.~~[16] SEC Press Release, SEC Charges PGI Global Founder with $198 Million Crypto Asset and Foreign Exchange Fraud Scheme (Apr. 22, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-69.~~[17] SEC Press Release, Unicoin, Top Executives Charged in Offering Fraud That Raised More than $100 Million from Thousands of Investors (May 20, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-75.~~[18] SEC Administrative Proceedings Order, In the Matter of Karen J. Smith, CPA (Feb. 4, 2025), available at https://www.sec.gov/files/litigation/admin/2025/33-11364.pdf.~~[19] SEC Administrative Proceedings Order, In the Matter of Allarity Therapeutics, Inc. (Mar. 12, 2025), available at https://www.sec.gov/files/litigation/admin/2025/33-11367.pdf.~~[20] SEC Litigation Release, SEC Charges Former Public Company CFO with Lying to Auditors and Falsifying Records (Mar. 17, 2025), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26271.~~[21] SEC Administrative Proceedings Order, In the Matter of Emergent BioSolutions, Inc. (Apr. 7, 2025), available at https://www.sec.gov/files/litigation/admin/2025/33-11371.pdf.~~[22] SEC Administrative Proceedings Order, In the Matter of Edward O’Donnell, CPA (June 9, 2025), available at https://www.sec.gov/files/litigation/admin/2025/34-103214.pdf.~~[23] SEC Press Release, SEC Charges One Oak Capital Management and Michael DeRosa with Breaching Fiduciary Duties to Clients (Feb. 14, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-39.~~[24] SEC Press Release, SEC Charges Investment Adviser and Two Officers for Misuse of Fund and Portfolio Company Assets (Mar. 7, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-53.~~[25] SEC Press Release, SEC Charges New Jersey Investment Adviser and His Firm with Fraud and Other Violations (Mar. 17, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-55.~~[26] SEC Administrative Proceedings Order, In re Advance Capital Management (Apr. 7, 2025), available at https://www.sec.gov/files/litigation/admin/2025/ic-35522.pdf.~~[27] SEC Administrative Proceedings Order, In re TransAmerica Retirement Advisors, LLC (Apr. 5, 2025), available at https://www.sec.gov/files/litigation/admin/2025/ia-6876.pdf.~~[28] SEC Litigation Release, SEC Charges Investment Advisers and Their Principal with Defrauding Clients and Misappropriating Over $17 Million (May 29, 2025), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26317.~~[29] SEC Administrative Proceedings Summary, SEC Charges Minnesota Investment Adviser and Principal in Cherry-Picking Scheme (June 3, 2025), available at https://www.sec.gov/enforcement-litigation/administrative-proceedings/34-103173-s.~~[30] SEC Litigation Release, SEC Charges New Mexico Investment Adviser Firm and Owner With False And Misleading Statements And Failing To Disclose Conflicts Of Interest (June 4, 2025), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26319.~~[31] SEC Administrative Proceedings Order, In re Centaurus Financial, Inc., et al. (Feb. 7, 2025), available at https://www.sec.gov/files/litigation/admin/2025/34-102379.pdf.~~[32] SEC Administrative Proceedings Order, In re Velox Clearing LLC (Apr. 4, 2025), available at https://www.sec.gov/files/litigation/admin/2025/34-102769.pdf.~~[33] SEC Litigation Release, SEC Obtains Final Judgment Against Canadian Resident for Involvement in Scheme to Fraudulently Promote Securities (June 13, 2025), available at https://www.sec.gov/files/litigation/complaints/2025/comp26325.pdf.~~[34] SEC Press Release, SEC Charges Three Arizona Individuals with Defrauding Investors in $284 Million Municipal Bond Offering That Financed Sports Complex (Apr. 1, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-59.~~[35] DOJ Press Release, Corporate Insider And Two Associates Plead Guilty To Million-Dollar Insider Trading Scheme (May 23, 2025), available at https://www.justice.gov/usao-sdny/pr/corporate-insider-and-two-associates-plead-guilty-million-dollar-insider-trading; DOJ Press Release, Executive At Investor Relations Firm And Two Associates Plead Guilty To Insider Trading Scheme (June 6, 2025), available at https://www.justice.gov/usao-sdny/pr/executive-investor-relations-firm-and-two-associates-plead-guilty-insider-trading.~~[36] SEC Litigation Release, SEC Charges Technical Consultant with Insider Trading (Jan. 21, 2025), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26231.~~[37] SEC Litigation Release, SEC Charges Foreign Traders in International Insider Trading Scheme (Mar. 4, 2025), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26268.~~[38] SEC Administrative Proceedings Order, In re Jeffrey Suchecki (Mar. 4, 2025), available at https://www.sec.gov/files/litigation/admin/2025/34-102515.pdf.~~[39] SEC Litigation Release, SEC Charges Former Biopharmaceutical Company Vice President with Insider Trading (Mar. 7, 2025), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26262.~~[40] SEC Press Release, SEC Awards $6 Million to Joint Whistleblowers (Apr. 21, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-67-sec-awards-6-million-joint-whistleblowers.~~[41] SEC Press Release, Paul S. Atkins Swore in as SEC Chairman (Apr. 21, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-68.~~[42] SEC Press Release, Acting Chairman Mark T. Uyeda Names Natalia Díez Riggin as Senior Advisor and Acting~~Director of Legislative and Intergovernmental Affairs (Jan. 30, 2025), available at~~https://www.sec.gov/newsroom/press-releases/2025-34.~~[43] SEC Press Release, Natalia Díez Riggin Named Senior Advisor and Director of Legislative and Intergovernmental Affairs (June 2, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-81-natalia-diez-riggin-named-senior-advisor-director-legislative-intergovernmental-affairs.~~[44] SEC Press Release, Kevin Muhlendorf Named SEC Inspector General (June 23, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-92-kevin-muhlendorf-named-sec-inspector-general.~~[45] SEC Press Release, Natasha Vij Greiner Will Conclude Her Tenure as Director of Investment Management (June 10, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-84-natasha-vij-greiner-will-conclude-her-tenure-director-investment-management.~~[46] SEC Press Release, Brian Daly Named Director of Division of Investment Management (June 13, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-88-brian-daly-named-director-division-investment-management.~~[47] SEC Press Release, SEC Names Jamie Selway as Director of Trading and Markets (June 13, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-87-sec-names-jamie-selway-director-trading-markets.~~[48] SEC Press Release, SEC Names Erik Hotmire as Chief External Affairs Officer and Director of the Office of Public Affairs (June 13, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-90-sec-names-erik-hotmire-chief-external-affairs-officer-director-office-public-affairs.~~[49] SEC Press Release, SEC Announced Departure of David Saltiel (June 18, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-91-sec-announces-departure-david-saltiel.~~[50] SEC Press Release, SEC Names Kurt Hohl as Chief Accountant (June 13, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-89-sec-names-kurt-hohl-chief-accountant.~~[51] SEC Statement, Statement on the Departure of PCAOB Chair Erica Y. Williams (July 22, 2025), available at https://www.sec.gov/newsroom/speeches-statements/crenshaw-statement-departure-pcaob-chair-erica-y-williams-072225-statement-departure-pcaob-chair-erica-y-williams; SEC Speech, Statement on Commencement of Appointment Process for Five Public Company Accounting Oversight Board Seats (July 23, 2025), available at https://www.sec.gov/newsroom/speeches-statements/atkins-pcaob-board-072325.~~[52] SEC Press Release, SEC Announces George Botic to Serve as Acting Chair of the Public Company Accounting Oversight Board (July 21, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-100-sec-announces-george-botic-serve-acting-chair-public-company-accounting-oversight-board?utm_medium=email&utm_source=govdelivery.~~The following Gibson Dunn lawyers prepared this update: Mark Schonfeld, David Woodcock, Jina Choi, Osman Nawaz, Tina Samanta, Lauren Jackson, Michael Ulmer, Hayden McGovern, Lauren Guzman, Ty Shockley, and Timoteo L’Esperance.~~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) Jina L. Choi – San Francisco (+1 415.393.8221, jchoi@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) Michael Ulmer – Denver (+1 303.298.5752, mulmer@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.~~Download PDF~~

Jul 28

14 min

Gibson Dunn’s Workplace DEI Task Force aims to help our clients navigate the evolving legal and policy landscape following recent Executive Branch actions and 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.~~Key Developments~~On February 26, U.S. Equal Employment Opportunity Commission (“EEOC”) Chair Andrea Lucas issued a letter to chief executive officers, general counsel, and board chairs of the 500 largest employers in the United States to educate them about her views on the potential for race- and sex-based discrimination in corporate DEI programs.  The letter asserts that the “bedrock American principle[]” of equality has been “under attack” by “movements and ideologies” that “demand equal outcomes over equal treatment” and “promote discrimination against certain races or groups.”  Chair Lucas writes, “we are the Equal Employment Opportunity Commission, not the Equitable Employment Outcomes Commission.”  The letter states that the EEOC is committed to using “every available resource” to eradicate what it views as discriminatory practices in the workplace.  In a press release regarding the letter, Chair Lucas, echoing Chief Justice Roberts in the SFFA v. Harvard admissions decision, stated that “[t]he only lawful way to stop discrimination on the basis of race or sex, is to stop discrimination on the basis of race or sex,” and urged corporate leaders to “reject identity politics” as a solution to workplace issues.~~On the same day, the EEOC issued a decision holding that Title VII permits federal employers to maintain sex-separated bathrooms, and similar intimate spaces, based on biological sex and does not require special exceptions for transgender employees, reversing a 2015 EEOC decision which held that federal agencies “must allow” trans-identifying employees access to the “opposite sex restroom.”  The case arose when a “male employee” of the U.S. Army began “identif[ying] as a woman” and requested access to female-designated bathrooms and locker rooms.  The Army denied the request based on Executive Order 14168, which directed agencies to ensure that “intimate spaces” are designated by sex rather than identity.  The EEOC reasoned that because of innate reproductive and physical differences between men and women, the sexes are not “similarly situated” when it comes to bathrooms and other intimate spaces where privacy expectations apply and, therefore, separating men and women under such circumstances is not discriminatory under Title VII.  The EEOC also concluded that under the Supreme Court’s 2020 decision in Bostock v. Clayton County, trans-identifying employees are entitled to equal treatment, not exemptions from generally applicable workplace rules, including rules to use the bathroom corresponding to one’s biological sex.  The EEOC’s decision applies only to federal agencies subject to the EEOC’s administrative complaint process and does not bind private sector employers or federal courts.  In a LinkedIn post about the decision, Chair Lucas said that “[w]hen it comes to bathrooms, male and female employees are not similarly situated.  Biology is not bigotry.”  The case is Selina S. v. Dep’t of the Army, EEOC Appeal No. 2025003976 (Feb. 24, 2026).~~Beginning on March 1, 2026, the Fair Investment Practices by Venture Capital Companies Law (“FIPVCC”) will require certain “venture capital companies” with broadly defined ties to the State to begin registering with the California Department of Financial Protection and Innovation (“DFPI”).  By April 1, 2026, these covered entities must submit their first annual report, which will cover in-scope activities from 2025.  The law mandates that these firms collect and report anonymized, aggregated demographic data on the founding teams of their portfolio companies, including information on race, ethnicity, gender identity, LGBTQ+ status, and disability status.  While participation in the founder surveys is voluntary, the collected data will be published online by DFPI.  Firms that fail to comply will be given a 60-day period to cure the deficiency before potentially facing penalties.  In preparation for these new requirements, affected firms are advised to confirm their coverage under the law, identify their reportable 2025 venture capital investments, and implement processes for surveying founders and securely managing the data. For more information, please refer to the Gibson Dunn client alert on this topic.~~On February 24, the United States Court of Appeals for the Sixth Circuit affirmed the dismissal of a putative-class action lawsuit alleging racially discriminatory grantmaking in violation of Section 1981 by Progressive Preferred Insurance, Progressive Casualty Insurance, and Circular Board.  The defendants’ program—which was discontinued after the Supreme Court’s 2023 decision in SFFA v. Harvard—offered ten $25,000 grants to small businesses to help them buy a commercial vehicle and limited eligibility to Black-owned businesses.~~In a 2-1 decision, Judge Andre Mathis, joined by Judge David McKeague, held that the lead plaintiff, a white commercial truck driver, lacked standing to challenge the defendants’ grant program because he failed to submit an application for the grant.  The Sixth Circuit adopted the plaintiff’s two-contract theory, which distinguished between an “application-stage” contract and subsequent “grant-stage” contract, but held that the plaintiff’s injury was “self-inflicted” because he never applied to the grant program and therefore could not establish that the defendants caused his injury.  The court noted that the plaintiff did not plead any race-based barriers to entering into an “application-stage” contract or allege that the grant application required him to disclose his race or certify compliance with any race-based eligibility criteria before applying.  Thus, the court reasoned that because the plaintiff chose not to submit his application, he never subjected himself to the allegedly discriminatory race-based criteria for the subsequent “grant-stage” contract.  Judge Danny Boggs dissented, disagreeing with the majority’s description of the plaintiff’s injury as “self-inflicted” because the grant program “clearly discriminated” based on race and led to the plaintiff’s injury of an “unequal contracting opportunity based on race.”  The case is Nathan Roberts v. Progressive Preferred Insurance Co., No. 24-3454 (6th Cir. 2025).~~On February 17, the EEOC sued Coca-Cola Beverages Northeast, Inc., alleging it engaged in unlawful employment practices on the basis of sex in violation of Title VII of the Civil Rights Act of 1964.  The complaint alleges that Coca-Cola Northeast invited only female employees to an “employer-sponsored trip and networking event” at a casino resort, which featured a “social reception, team-building exercises and recreational activities,” excusing them from their regular work duties and paying their normal wages.  The complaint alleges that Coca-Cola Northeast’s exclusion of male employees from attending and participating in the event constitutes a “denial of equal compensation, terms, conditions, or privileges of employment on the basis of sex.”  EEOC Chair Andrea Lucas posted about the suit on LinkedIn, stating that “Title VII does not permit sex segregation and sex-based disparate treatment in privileges of employment like employer-sponsored events, trips, networking, and training.”  The case is EEOC v. Coca-Cola Beverages Northeast, Inc., No. 1:26-cv-00115 (D. N.H. 2026).~~On February 6, the United States Court of Appeals for the Fourth Circuit vacated an injunction barring enforcement of Executive Orders 14151 (“Ending Radical and Wasteful Government DEI Programs and Preferencing”) and 14173 (“Ending Illegal Discrimination and Restoring Merit-Based Opportunity”).  The Fourth Circuit previously stayed the injunction pending the resolution of the appeal.  The plaintiffs (the National Association of Diversity Officers in Higher Education, the American Association of University Professors, and the Mayor and City Council of Baltimore Maryland), argued that the “Termination Provision” of EO 14151 and the “Certification Provision” and “Enforcement Threat Provision” of EO 14173 violate the First and Fifth Amendments.  Those provisions require all agencies to (1) terminate all DEI-related positions, programs, and performance requirements, (2) include in every contract or grant award a provision that states the contractual counterparty or grant recipient does not operate unlawful programs promoting DEI, and (3) prepare a plan specifying measures to deter unlawful DEI programs, respectively.~~The three-judge panel—Chief Judge Albert Diaz, Judge Pamela A. Harris, and Judge Allison J. Rushing—held that the plaintiffs lacked standing with respect to the Enforcement Threat Provision because the allegations “that they’ll be forced to restrict” their speech “or face penalties” “overstate[d]” the text of the provision.  The court explained that the provision “focus[es] on internal government agency processes and programs and reporting to the President from his subordinates,” and that the plaintiffs are not in imminent danger of injury because they are not “agenc[ies] within the executive branch of government.”  Turning to the Termination and Certification Provisions, the court held that plaintiffs had standing but concluded that their facial challenges as to each were unlikely to succeed.  The court held that plaintiffs’ Fifth Amendment claim as to the Termination Provision was unlikely to succeed because the directive to terminate “equity-related” grants was not impermissibly vague.  The court also found that plaintiffs’ First Amendment challenge to the Certification Provision was also likely to be unavailing because the provision effectively asks plaintiffs only to “certify compliance with federal antidiscrimination law,” and therefore does not burden “protected speech” because “plaintiffs have no protectable speech interest in operating” DEI programs that violate federal antidiscrimination law.~~The court suggested that an as-applied challenge may be more likely to succeed than a facial challenge, if, for example, “the President, his subordinates, or another grantor misinterprets federal antidiscrimination law” in terminating a particular DEI program.  And in a concurring opinion, Chief Judge Diaz emphasized that the court was presented with a “facial challenge,” not the legality or termination of a particular DEI program, which “makes all the difference.”  He also stated that the evidence presented by the plaintiffs indicates that programs have been “terminated by keyword,” and “valuable grants” have been “gutted in the dark.”  He concluded, “[f]or those disappointed by the outcome, I say this:  Follow the law.  Continue your critical work.  Keep the faith.  And depend on the Constitution, which remains a beacon amid the tumult.”~~On February 9, a group of anonymous law students and the EEOC filed a stipulation voluntarily dismissing a lawsuit the students filed in response to the EEOC’s March 17 letters requesting information from twenty law firms.  The lawsuit was filed after the EEOC sent requests to the law firms requesting information including the name, sex, race, GPA, and contact information for law students who applied for jobs since 2019.  The EEOC stated that responding to the requests was voluntary, most law firms “did not provide any of the requested information,” and any information provided to the EEOC by law firms in response to the March 17 letters “did not include names, email addresses, phone numbers, or other personally identifying information of any law firm employee or applicant.”  The stipulation states that the EEOC “considers the matter of responding to those letters closed.”  The case is Doe 1 et. al v. EEOC, et. al, No. 25-cv-1124 (D.D.C. 2025).~~On February 5, Judge John Ross of the U.S. District Court for the Eastern District of Missouri dismissed a lawsuit filed by the State of Missouri against Starbucks in which Missouri alleged that the company’s DEI commitments were pretext to discriminate on the basis of race, gender, and sexual orientation.  The court found that the State lacked standing, because it “did not point to even a single Missouri resident” who suffered an adverse employment action because they lacked Starbucks’s “preferred racial or sex characteristics.”  The court dismissed the State’s claims under both Title VII and the Missouri Human Rights Act.  The case is State of Missouri v. Starbucks Corp., No. 4:25-cv-00165 (E.D. Mo. 2025).~~On February 4, the EEOC filed a motion in the Eastern District of Missouri to enforce an administrative subpoena issued in its investigation of Nike for alleged violations of Title VII.  The EEOC alleges that Nike engaged in unlawful employment practices by “engaging in a pattern or practice of disparate treatment against White employees, applicants, and training program participants,” including by committing to allegedly unlawful “race-based workforce representation quotas,” as evidenced by its published “2025 Targets.”  The EEOC subpoenaed information relating to layoff decisions, executive compensation policies and decisions tied to DEI metrics, demographic and pay data for people of color that was provided to Nike executives, and programs aimed at increasing the representation of racial and ethnic minorities in the workforce.  The EEOC asserts that Nike provided “some but not all the information and documents required” and therefore failed to “fully comply” with the subpoena.  On February 12, 2026, the court ordered Nike to respond to the EEOC’s motion by March 16, 2026.~~On January 30, 2026, Federal Trade Commission (“FTC”) Chairman Andrew N. Ferguson issued a letter to 42 law firms warning that their participation in the Diversity Lab’s Mansfield Certification program may expose them to potential antitrust liability.  The letter alleges that to be eligible for Mansfield Certification, firms agree that at least 30% of the candidates they consider for leadership and promotion will come from underrepresented “racial and other groups” and agree to participate in monthly information-sharing calls with competitor firms to exchange strategies for achieving the program’s DEI benchmarks.  The letter states that such coordination among competing employers could violate Section 1 of the Sherman Act and Section 5 of the FTC Act by distorting competition for legal talent, suppressing wages and benefits, and depriving labor markets of independent decision-making.  Although the letter does not allege unlawful conduct by recipient law firms, it advises the firms to re-evaluate their relationship with Diversity Lab and peer firms in light of their obligations under federal antitrust law.  Last spring, Judge Beryl Howell of the U.S. District Court for the District of Columbia wrote that the Mansfield program does not violate anti-discrimination laws because it “expressly does not establish any hiring quotas or other illegally discriminatory practices” and requires “only that participating law firms consider attorneys from diverse backgrounds for certain positions.”  The case is Perkins Coie LLP v. U.S. Dep’t of Justice, et al., No. 25-716 (D.D.C. 2025) and is on appeal at the D.C. Circuit Court of Appeals, No. 25-05241 (D.C. Cir.).~~On February 12, 2026, Bloomberg reported that Diversity Lab founder Caren Ulrich Stacy announced that the organization will pause its Mansfield program.  According to Ulrich Stacy, the organization’s operating funds have been “substantially depleted by the need to respond to Executive Orders, DOJ law-firm lawsuits, and EEOC letters to law firms.”  Ulrich Stacy stated that the FTC’s January 30 letters led to hundreds of concerned emails from clients.  Most of Diversity Lab’s small team will be furloughed and the organization will operate with only one part-time employee and Ulrich Stacy herself.~~Media Coverage and Commentary~~Below is a selection of recent media coverage and commentary on these issues:~~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~~2. Employment discrimination and related claims~~3. Challenges to statutes, agency rules, executive orders, and regulatory decisions~~Legislative Updates~~The following Gibson Dunn attorneys assisted in preparing this client update: Jason Schwartz, Mylan Denerstein, Anna McKenzie, Cynthia Chen McTernan, Zakiyyah Salim-Williams, Molly Senger, Katherine Smith, Cate McCaffrey, Sameera Ripley, Anna Ziv, Emma Eisendrath, Benjamin Saul, Simon Moskovitz, Teddy Okechukwu, Beshoy Shokrolla, Angelle Henderson, Lauren Meyer, Kameron Mitchell, Taylor Bernstein, Jerry Blevins, Chelsea Clayton, Sonia Ghura, Samarah Jackson, Shanelle Jones, Elvyz Morales, Allonna Nordhavn, Felicia Reyes, Eric Thompson, Laura Wang, Daniela De La Cruz, Taylor-Ryan Duncan, Sam Moan, Shreya Sarin, and Rachel Schwartz.~~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)~~Greta B. Williams – Partner, Labor & Employment Group Washington, D.C. (+1 202-887-3745, gbwilliams@gibsondunn.com)~~Cynthia Chen McTernan – Partner, Labor & Employment Group Los Angeles (+1 213-229-7633, cmcternan@gibsondunn.com)~~Anna M. McKenzie – Partner, Labor & Employment Group Washington, D.C. (+1 202-955-8205, amckenzie@gibsondunn.com)~~© 2026 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.~~Download PDF~~

Mar 2

12 min

Until the scope of any new proposed rule becomes clear, companies should expect that cancellation design, consent flows, and subscription disclosures will remain under close regulatory scrutiny, including through active enforcement under ROSCA and Section 5 of the FTC Act.~~The Federal Trade Commission has renewed its efforts to promulgate a nationwide rule governing subscription cancellation practices, following the U.S. Court of Appeals for the Eighth Circuit’s vacatur of the FTC’s prior “Click-to-Cancel” Rule in July 2025. The vacated rule would have imposed sweeping requirements on subscription and autorenewal programs, extending beyond existing statutory obligations under the Restore Online Shoppers’ Confidence Act (ROSCA). The Eighth Circuit’s ruling came in a case brought by Gibson Dunn on behalf of industry petitioners. Agreeing with Gibson Dunn’s arguments, the Eighth Circuit invalidated the Click-to-Cancel Rule in its entirety, holding that the FTC failed to comply with the procedural requirements of its Magnuson-Moss rulemaking authority.  In response to the Eighth Circuit’s ruling, on January 30, 2026, the FTC submitted a draft Advance Notice of Proposed Rulemaking (ANPRM) to the Office of Information and Regulatory Affairs (OIRA), formally initiating a new rulemaking process.~~Bottom Line: Although the July 2025 vacatur halted implementation of a sweeping trade regulation rule, it did not reduce federal scrutiny of subscription practices. Any renewed rulemaking proposal must address the deficiencies identified by the Eighth Circuit, including required economic analysis. Until the scope of any new proposed rule becomes clear, companies should expect that cancellation design, consent flows, and subscription disclosures will remain under close regulatory scrutiny, including through active enforcement under ROSCA and Section 5 of the FTC Act.~~Key Takeaways~~The Eighth Circuit’s Vacatur~~In October 2024, the FTC adopted a revised Negative Option Rule—commonly referred to as the Click-to-Cancel Rule—that would have imposed sweeping requirements on companies offering subscription and autorenewal programs. The rule extended beyond online transactions and included, among other things:~~These requirements went beyond the baseline obligations imposed by ROSCA, which applies to online transactions and focuses on clear disclosure, informed consent, and a simple mechanism to stop recurring charges.~~In July 2025, the Eighth Circuit vacated the Click to Cancel Rule after petitioners represented by Gibson Dunn demonstrated that the FTC failed to conduct a preliminary regulatory analysis that was required because the Rule’s economic impact exceeded the statutory threshold for major rules under Section 18 of the FTC Act. The court held that the FTC’s later regulatory analysis could not cure that defect.  The decision reinforces that FTC trade regulation rules must strictly comply with the procedural and economic requirements of the Magnuson-Moss framework, particularly where projected impact is substantial.~~FTC’s Renewed Rulemaking~~On January 30, 2026, the FTC submitted a draft ANPRM on negative option practices to OIRA for review pursuant to Executive Order 14215, which requires White House review of independent agency rulemakings. If cleared, the FTC will publish the ANPRM in the Federal Register, opening a new public comment process.~~The text of the ANPRM has not yet been released publicly. As a result, it remains unclear whether the FTC intends to re-propose a rule comparable in scope to the vacated Click-to-Cancel Rule or pursue a different approach. In light of the Eighth Circuit’s ruling, the Commission may seek to advance a more tailored proposal centered on defining a “simple” or “easy” cancellation method, rather than re-proposing the broader prohibitions contained in the vacated rule.~~The renewed ANPRM confirms continued federal attention to subscription and cancellation practices.~~ROSCA Enforcement Remains Active~~Even without a new rule in effect, the FTC continues to regulate subscription practices through enforcement under ROSCA and Section 5 of the FTC Act.~~FTC leadership has publicly emphasized that unwanted subscriptions and cancellation obstacles remain enforcement priorities. Statements by Chair Andrew Ferguson and Bureau of Consumer Protection Director Chris Mufarrige underscore the FTC’s continued focus on subscription enrollment and cancellation practices under existing statutory authority.~~ROSCA requires companies offering online negative option features to clearly and conspicuously disclose all material terms before obtaining a consumer’s billing information, secure the consumer’s express informed consent to the subscription, and provide a simple mechanism to stop recurring charges. These statutory standards remain fully operative and continue to serve as the basis for enforcement actions.~~Recent cases reflect a consistent focus on whether subscription programs adequately disclose automatic renewal and fee terms before enrollment, whether consent mechanisms demonstrate informed agreement to recurring charges, and whether cancellation processes introduce friction that could be characterized as unreasonably difficult.~~Over the past two years, the FTC and the U.S. Department of Justice (on the FTC’s behalf) have brought actions across multiple industry sectors—including e-commerce, digital services, ed-tech, and subscription-based consumer products—challenging enrollment disclosures, consent flows, and cancellation design. Several matters have resulted in substantial monetary settlements, including a $7.5 million resolution involving alleged concealment of cancellation options, and a $60 million settlement concerning renewal disclosures and refund practices.~~The scale of these settlements underscores a central reality: the FTC is already using its existing statutory authority under ROSCA to pursue the same core subscription practices targeted by the vacated Click-to-Cancel Rule.~~For businesses, the practical takeaway is that the vacatur of the Click-to-Cancel Rule has not reduced scrutiny of subscription models. The FTC’s enforcement posture reflects continued attention to disclosure, consent, and cancellation design—the very issues likely at the center of the renewed rulemaking effort.~~State Law Developments~~State legislatures continue to update and expand autorenewal statutes. States including California, Colorado, Minnesota, and New York have strengthened disclosure, reminder, and cancellation requirements. In some jurisdictions, state requirements exceed federal baseline standards under ROSCA.~~In addition, like the FTC, states have been active in enforcing their state autorenewal laws. For example, in August, the California Automatic Renewal Task Force—made up of several California District Attorney’s offices—announced a $7.5 million settlement with a meal delivery service to resolve claims under California’s Autorenewal Law. In November 2025, 34 states announced a $4.8 million settlement with an online clothing retailer related to the retailer’s paid membership program.~~For businesses operating nationally, compliance therefore requires navigating both evolving federal enforcement standards and increasingly prescriptive state mandates.~~Implications for Businesses~~Companies offering negative option features should:~~Conclusion~~The FTC’s renewed rulemaking effort, coupled with ongoing ROSCA enforcement and expanding state regulation and enforcement, underscores that subscription compliance remains a significant regulatory risk for businesses. Companies should evaluate their subscription practices accordingly. Gibson Dunn lawyers are available to assist with compliance strategy, enforcement defense, and engagement in the rulemaking process.~~The following Gibson Dunn lawyers prepared this update: Svetlana Gans, Ryan Bergsieker, Ashley Rogers, Caelin Moriarity Miltko, and Connor Mui.~~Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding the issues discussed in this update. Please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any of the following leaders and members of the firm’s Consumer Protection, Administrative Law & Regulatory, Antitrust & Competition, or Privacy, Cybersecurity & Data Innovation practice groups:~~Consumer Protection: Gustav W. Eyler – Washington, D.C. (+1 202.955.8610, geyler@gibsondunn.com) Svetlana S. Gans – Washington, D.C. (+1 202.955.8657, sgans@gibsondunn.com) Ashley Rogers – Dallas (+1 214.698.3316, arogers@gibsondunn.com)~~Administrative Law & Regulatory: Stuart F. Delery – Washington, D.C. (+1 202.955.8515, sdelery@gibsondunn.com) Eugene Scalia – Washington, D.C. (+1 202.955.8673, escalia@gibsondunn.com) Helgi C. Walker – Washington, D.C. (+1 202.887.3599, hwalker@gibsondunn.com)~~Antitrust & Competition: Rachel S. Brass – San Francisco (+1 415.393.8293, rbrass@gibsondunn.com) Svetlana S. Gans – Washington, D.C. (+1 202.955.8657, sgans@gibsondunn.com) Kristen C. Limarzi – Washington, D.C. (+1 202.887.3518, klimarzi@gibsondunn.com) Cindy Richman – Washington, D.C. (+1 202.955.8234, crichman@gibsondunn.com)~~Privacy & Cybersecurity: Ryan T. Bergsieker – Denver (+1 303.298.5774, rbergsieker@gibsondunn.com) Cassandra L. Gaedt-Sheckter – Palo Alto (+1 650.849.5203, cgaedt-sheckter@gibsondunn.com) Vivek Mohan – Palo Alto (+1 650.849.5345, vmohan@gibsondunn.com)~~© 2026 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.~~Download PDF~~

Feb 27

6 min