Current Month (December 2025)
Directors and Officers of Foreign Private Issuers Must Comply with Section 16 Reporting Requirements Under Latest National Defense Authorization Act
By Noah B. Levin, WilmerHale
The 2026 National Defense Authorization Act (the “NDAA”) includes a provision that removes the longstanding exemption from the reporting requirements of Section 16(a) of the Exchange Act for directors and officers of foreign private issuers (“FPIs”). The NDAA provision does not extend Section 16(a) reporting requirements to greater than 10 percent equity holders of FPIs and maintains exemptions for directors and officers of FPIs under Section 16(b) (short swing liability) and Section 16(c) (short sale restrictions). The Securities and Exchange Commission must implement the required rule change no later than March 18, 2026. For a more detailed overview of the rule change, please refer to the WilmerHale blog post on the topic.
SEC Consents to Modifications to Global Research Settlement
By Anna Pinedo, Mayer Brown
On December 5, 2025, the Securities and Exchange Commission (“SEC”) consented to modifications to the Global Research Settlement applicable to settling firms, which has been in place since the aftermath of the dot‑com bubble bursting. The Settlement contains an Addendum with undertakings that address conflicts of interest between research and investment banking. The Addendum includes a sunset provision providing that new rules would supersede those undertakings. It also states that, for terms that are not superseded, the SEC would agree to amendments or modifications to the Addendum, subject to court approval, unless doing so would not be in the public interest. The Addendum was modified in 2010 to remove certain provisions. In the years following entry into the Settlement, the Financial Industry Regulatory Authority (“FINRA”) adopted Rule 2241 addressing equity research and, among other things, conflicts of interest. Earlier this year, the settling firms filed motions seeking to terminate the remaining undertakings in the Addendum, given that the FINRA rule addresses conflicts of interest. Read the SEC announcement and my full blog post for further details.
SEC Charges Three Purported Crypto Asset Trading Platforms and Four Investment Clubs with Scheme Targeting Retail Investors on Social Media
By Rani Doyle
In a December 22 press release, the SEC announced the filing of charges against multiple entities alleging they defrauded retail investors out of more than $14 million in “an elaborate confidence scam.”
“This matter highlights an all-too-common form of investment scam that is being used to target U.S. retail investors with devastating consequences. Our complaint alleges a multi-step fraud that attracted victims with ads on social media, built victims’ trust in group chats where fraudsters posed as financial professionals and promised profits from AI-generated investment tips, then convinced victims to put their money into fake crypto asset trading platforms where it was misappropriated,” said Laura D’Allaird, Chief of the Cyber and Emerging Technologies Unit. “Fraud is fraud, and we will vigorously pursue securities fraud that harms retail investors.”
The SEC’s Office of Investor Education and Assistance has issued an investor alert warning investors that fraudsters often employ impersonation schemes and may impersonate legitimate investment professionals, such as brokers or investment advisors, or even the SEC and use popular social media platforms and messaging apps to lure investors into scams. The SEC warns investors never to rely solely on information from social media or group chats in making investment decisions. The SEC encourages investors to use Investor.gov to check the background of anyone offering or selling them an investment.
SEC Chairman Atkins Outlines Views on Future of Securities Regulation and re: Distributed Ledger Technology and Tokenization of Financial Assets
By Spencer Shih, Riker Danzig LLP, and Rani Doyle
On December 2 and 3, 2025, SEC Chairman Paul Atkins delivered a speech before the New York Stock Exchange (“NYSE”) and participated in an interview with CNBC reporter Kristina Partsinevelos and Nasdaq Chair and CEO Adena Friedman, respectively. He outlined his views on the future of securities regulation and capital formation by explaining the three pillars of his effort to “make IPOs great again.” The first of these pillars is to reform corporate disclosure regulations to emphasize financial materiality and scale. Chairman Atkins stated that capital markets thrive where disclosures emphasize clarity and significance with a focus on what reasonable shareholders deem important, rather than with voluminous disclosures. As for scale, Chairman Atkins elaborated that disclosure requirements should be tailored to a company’s size and maturity so that they can better accommodate compliance requirements and costs. He also stated that the SEC should build on the “IPO on-ramp” set out in the JOBS Act of 2012. Chairman Atkins’ second pillar is proxy regulation reform with a view towards “de-politicizing” shareholder meetings to focus on director elections and significant corporate matters. The final pillar is litigation reform to reduce the volume of frivolous litigation complaints against public companies while maintaining avenues for meritorious shareholder claims.
Mayer Brown’s Anna Pinedo posted a note in her firm’s Free Writings & Perspectives blog that explains certain market changes that have impacted the IPO market in ways that the SEC may not be able to solve with a more attractive IPO on-ramp. Many other practitioners further note that the ever-expanding private markets are too alluring for many companies to truly “make IPOs great again.”
On December 4, Chair Atkins spoke at an Investor Advisory Committee meeting about new technologies, including how market participants are experimenting with different tokenization models and artificial intelligence (“AI”). Chair Atkins stressed, with respect to tokenized shares and trading intermediaries, that the SEC must use its broad exemptive authorities responsibly to allow markets to develop on-chain models that give investors new choices. He said, with respect to AI, that the SEC’s existing principals-based rules are designed to “allow” companies to inform investors of material impacts of any new development, including how AI may be impacting their financial results, be a risk factor, or material to their business model.
SEC Division of Corporation Finance Updates Financial Reporting Manual to Address 2024 SPAC Rulemaking
By Rani Doyle
On December 5, the staff of the Division of Corporation Finance posted SPAC-related changes to the Financial Reporting Manual. See the updates at this link.
SEC Division of Investment Management Director Brian Daly Summarizes Regulatory Outlook
By Spencer Shih, Riker Danzig LLP
On December 2, 2025, the Director of the SEC’s Division of Investment Management, Brian Daly, delivered remarks to the ABA’s Federal Regulation of Securities Committee’s Private Funds Subcommittee and Investment Advisors and Investment Companies Subcommittee. Director Daly stated that in the coming years, the Division intends to concentrate its regulatory efforts on deregulation, modernization, democratization, and AI. Director Daly explained that the Division’s deregulatory efforts will seek to balance retail protection and market stability with market innovation by considering the purpose of present rules. Likewise, Director Daly stated that the Division’s modernization efforts are aimed to make its rules consistent with the digital world and be “platform-independent, technology-neutral, and future-ready.” The Division’s democratization efforts will center on the trend of retailization of private funds by incrementally reconsidering the existing regulatory framework to provide the market with opportunity to innovate, and not necessarily through a single transformative rule. Finally, the Division’s AI efforts will focus on investment managers’ use of AI related to effective disclosures for investors, as well as AI’s effect on marketing, investment advice, registration, and liability.
California Stays Enforcement of SB 261, Its Climate-Related Risk Reporting Law, Following Ninth Circuit Ruling
By Noah B. Levin, WilmerHale
Following the Ninth Circuit issuing an injunction against the enforcement of SB 261 (the “Bill”) in Chamber of Commerce v. Sanchez, the California Air Resources Board (“CARB”) announced it will stay enforcement of the Bill during the appeals process. The Bill would have required public and private entities doing business in California with more than $500 million in annual revenue (other than insurers) to post and submit climate-related financial risk reports by January 1, 2026. After the appeals process is resolved, CARB will provide an updated reporting date if necessary. Entities that wish to voluntarily report may still do so.
President Trump Directs the SEC to Review Regulations Relating to Proxy Advisors in Executive Order
By Noah B. Levin, WilmerHale
President Trump issued an executive order on December 11 titled “Protecting American Investors from Foreign-Owned and Politically Motivated Proxy Advisors” (the “Order”). The Order directs the chairman of the SEC to:
- review and, if necessary, revise or rescind rules that do not comply with the Order particularly as they may implicate DEI or ESG;
- enforce the anti-fraud provisions of the federal securities laws with respect to material misstatements or omissions contained in the voting recommendations of proxy advisors;
- consider requiring proxy advisors whose activities fall within the scope of the Investment Advisors Act of 1940 register as a Registered Investment Advisor;
- consider requiring proxy advisors provide increased transparency on the methodology behind their voting recommendations, methodology for making voting recommendations, and conflicts of interest, with a focus on voting recommendations related to diversity, equity, and inclusion (“DEI”) and environmental, social, and governance (“ESG”);
- analyze whether proxy advisors may serve as a vehicle for investment advisers to coordinate and augment their voting decisions such that a group is formed for purposes of Section 13(d)(3) and Section 13(g)(3) of the Securities Exchange Act of 1934; and
- examine whether Registered Investment Advisers engaging proxy advisors to advise on nonpecuniary factors in investing, including DEI and ESG factors, is inconsistent with their fiduciary duties.
The Order further directs the Federal Trade Commission and the Attorney General to review state antitrust actions against proxy advisors to assess whether any proxy advisory firms engage in unfair methods of competition or unfair or deceptive acts or practices harming U.S. consumers such that federal antitrust laws have been violated. The Secretary of Labor is also directed to consider revising and strengthening regulations and guidance under the Employee Retirement Income Security Act of 1974 (“ERISA”) regarding the fiduciary status proxy advisors under ERISA plans.
PCAOB Updates
By Noah B. Levin, WilmerHale
Budget: The PCAOB unanimously approved its 2026 budget. The budget will contract by nearly $40 million compared to its 2025 budget, falling to $362.1 million from $399.7 million. The budget cuts will see the size of the PCAOB’s staff reduced and the salaries of the five-member board cut by nearly half.
Leadership: William Ryan is the new acting director of the PCAOB’s Division of Enforcement. He replaces Robert Rice, the current Director of the Division of Enforcement who retired on December 31. Ryan has been at the PCAOB since 2007, most recently serving as the Division of Enforcement’s chief counsel.
SEC Division of Examinations Issues Another Marketing Rule Risk Alert
By Karen Liu, Reid & Wise LLC
On December 16, 2025, the Division of Examinations (the “Division”) of the U.S. Securities and Exchange Commission (the “SEC”) issued another risk alert (the “2025 Risk Alert”) regarding investment advisers’ compliance with amended Rule 206(4)-1 (the “Marketing Rule”) under the Investment Advisers Act of 1940 (the “Advisers Act”). Subsequent to 2022, 2023 and 2024, this is the fourth consecutive year that the Division has issued risk alerts related to compliance with the Marketing Rule, which became effective on May 4, 2021, with a compliance date of November 4, 2022.
The 2025 Risk Alert focuses on Advisers Act Rule 206(4)-1(b) (the “Testimonials and Endorsements Provisions”) and Rule 206(4)-1(c) (the “Third-Party Ratings Provisions”) of the Marketing Rule.
The 2025 Risk Alert reflects the Division’s continued focus on investment advisers’ compliance with the Marketing Rule in SEC examinations. It provides a valuable checklist for advisers to improve their practices, policies, and procedures with respect to Marketing Rule compliance under Rules 206(4)-1(b) and 1(c), to become better prepared for future SEC examinations, and to reduce chances of being recommended for possible enforcement actions related to the Marketing Rule.
