On June 15, 2023, the Federal Trade Commission’s Bureau of Competition issued a statement on the relationship between voluntary interviews with the agency and contractual provisions that require or limit the disclosure of information. The Bureau explains that voluntary interviews are a key aspect of investigations because they “are essential to help [them] understand real-world dynamics and effects,” and “reduce unnecessary burdens on marketplace stakeholders and Bureau staff.” In the statement, the Bureau asserts that certain contractual restrictions impede investigations, and should be considered void.
CFIUS/Foreign Investment/Enforcement
M&A Deals Face Additional Scrutiny under the FTC’s New HSR Reporting Rules
On June 29, 2023, the Federal Trade Commission published a Notice of Proposed Rulemaking that would dramatically expand HSR reporting requirements. The historic changes fundamentally alter the HSR reporting landscape, shifting to more of a “white paper” approach, similar to that of ex‑U.S. jurisdictions like the EU. The change though brings new expansive reporting requirements to nearly sixfold the number of transactions seen in the EU (the EU took in about 400 ECMR filings last year, versus nearly 2,500 HSR filings at the FTC). The move would substantially increase the burden on reporting parties, and impact deal timing and certainty.
The CFIUS Oversight Web Expands to Monitor Fund Managers
By John R. Ingrassia on
Private investment funds and fund managers are increasingly getting swept into the expanded jurisdiction of the Committee on Foreign Investment in the US, which now plays a prominent part in private fund transactions across the board.
Funds managed or operated outside the US need to manage CFIUS compliance regularly. This includes reviewing investment activities and…
SEC Proposes Monthly Short Sale Reporting Requirements: Aggregated Information to be Public; New Order Marking Requirements Detailed
By Louis Rambo, Christopher Wells & Frank Zarb on
The SEC recently proposed to require investment managers to report short sale information on a monthly basis if such activity exceeds certain thresholds (described below), and to require broker dealers to begin to mark “buy to cover” trades under Regulation SHO in addition to marking trading activity as “long,” “short,” and “short exempt.” The definition…
SEC Investor Advisory Committee Considers Recommendations to Tighten Rules for Insiders’ Trading Plans
By Frank Zarb & Jonathan Richman on
The Securities and Exchange Commission’s Investor Advisory Committee (the “IAC”) is considering recommendations from its Owner Subcommittee urging the Commission to tighten the affirmative defense and disclosure requirements for SEC Rule 10b5-1 trading plans. These recommendations follow recent statements by SEC Chair Gary Gensler signaling the agency’s intention to review and toughen rules governing those plans.…
SEC Brings Enforcement Action Against Space SPAC for Alleged Misleading Disclosure and Due Diligence Failures
The U.S. Securities and Exchange Commission (“SEC”) has brought an enforcement action against a special purpose acquisition company (“SPAC”) and its major participants, highlighting enhanced regulatory scrutiny of SPACs and underscoring the importance of following appropriate diligence and other practices in the de-SPAC process.
On July 13, 2021, the U.S.
Pricing Controls under the Defense Production Act
With the federal government’s increasing focus on enforcing price gouging compliance, attention has turned to the Defense Production Act (the “DPA”). Passed in 1950 in response to the Korean War, the DPA is modelled on the War Powers Acts of 1941 and 1942 and gives the President, among other things, sweeping power to control the…
National Security Reviews Continue Apace: CFIUS Orders Unwinding of Transaction Involving Hotel Guest Data Firm
By Yuval Tal & John R. Ingrassia on
Following the February 13, 2020 effective date of the U.S. Department of Treasury’s final regulations (the “Final Rules”) implementing the majority of the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”), foreign investment in the United States is facing continued close scrutiny and attention with the Committee on Foreign Investment in the United States…
Final CFIUS Rules Issued: What It Means for Real Estate Transactions and Investors
On January 13, 2020, the U.S. Department of Treasury issued final regulations (the “Final Rules”) that implement most of the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”). These rules were issued in two parts, Part 802, addressing Real Estate, and Part 800, primarily addressing business acquisitions implicating potential national security concerns. In this…
Final CFIUS Regulations Impact Foreign Non-Control Investment Transactions Involving Critical Technologies/Infrastructure or Sensitive Data
By Jeffrey Neuburger on
In 2018, Congress passed the Foreign Investment Risk Review Modernization Act (FIRRMA) to modernize the Committee on Foreign Investment in the United States (CFIUS). CFIUS is chaired by the Secretary of the Treasury and is empowered to review certain transactions involving foreign investment in the U.S. that may affect national security.