Challenging Times
May 19, 2022

It would take a lot to move the ongoing crisis in Ukraine out of the top news headlines, but the shortage of baby formula, deep dives in the U.S. stock market, rising gas prices and, not surprisingly, talk from the Fed about interest rates and inflation did just that.

This week's Cabinet News and Views looks at several regulatory developments in the U.S. and UK, including an active week at the FDIC as well as an important development on FARA enforcement in the U.S. And we also welcome a new partner to our firm, Angie Batterson, in our Finance Group. 

As always, we welcome your thoughts on this week's issue of Cabinet News and Views and other topics that may be keeping you up at night. Just write to us here.

Daniel Meade and Michael Sholem
Co-Editors, Cabinet News and Views

Partner | Financial Regulation

On May 17, the Federal Deposit Insurance Corporation (“FDIC”) issued Financial Institutions Letter 22-2022 updating the FDIC’s Guidelines for Appeals of Material Supervisory Determinations. The revised Guidelines restore the Supervision Appeals Review Committee (“SARC”) as the final level of review in the agency’s supervisory appeals process. The SARC had previously been the final level of review until the FDIC established the Office of Supervisory Appeals in 2021. The revised Guidelines took effect May 17, 2022, but the FDIC is soliciting comment on the revised Guidelines with a comment period of 30 days.

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Partner | Financial Regulation

During an open session of the Federal Deposit Insurance Corporation (“FDIC”) this week, the Board of Directors voted to finalize a new regulation that will give the FDIC, and the public, better tools to ensure that deposits advertising does not mislead the public, consumers and businesses alike, regarding whether the deposits will be insured.

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Partner | Financial Services

On Monday, May 16, 2022, the European Securities and Markets Authority published a document from the Joint Committee of the European Supervisory Authorities (“ESAs”) setting out further questions for the European Commission on the interpretation of the Sustainable Finance Disclosure Regulation and Taxonomy Regulation. The ESAs published an updated supervisory statement on the application of the SFDR on March 24, 2022.

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Associate | White Collar Defense and Investigations

In what may mark a sea change in enforcement of the Foreign Agent Registration Act, for the first time in more than 30 years, the Department of Justice has filed a complaint seeking to compel an individual − the former Finance Chair of the Republican National Committee, Stephen A. Wynn − to register as a foreign agent.

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Partner | Global Litigation
Associate | Global Litigation
Law Clerk | Global Litigation

It is hardly news that ESG investing is a significant aspect of the asset management industry. According to Barron’s, $400 billion was invested in U.S. mutual funds and assets that have an ESG orientation in 2021. However, it remains a challenge for issuers, asset managers, regulators and other industry participants to determine whether a particular business, industry, or product promotes or is harmful to ESG considerations. The Russian invasion of Ukraine shines a spotlight on this larger issue due to shifting attitudes about “defense stocks” − i.e., stock in weapons and ammunition manufacturers and other companies in the defense industry. The defense industry does not immediately come to mind when thinking about ESG issues.  

The notion that a particular business or product can give rise to tension between the environmental and social aspects of ESG, or raise disputes about whether it is sustainable or socially beneficial at all, is not limited to the defense industry. For instance, in the United States, there have been significant investor complaints and confusion, as well as regulatory scrutiny surrounding the question of what constitutes a “sustainable” company. Thus, while there are any number of examples, the defense industry provides a useful lens through which to examine the challenges for the asset management industry in classifying investments as sustainable or not.

Read our Clients & Friends Memo here.


Angela Batterson has joined Cadwalader’s Finance Group as a partner in our New York office.

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Maurine R. Bartlett
Senior Counsel
T. +1 212 504 6218

Sukhvir Basran
T. +44 0 20 7170 8620

Brian Foster
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James Frazier
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Mark Howe
T. +1 202 862 2236

Gregg Jubin
T. +1 202 862 2485

Philip S. Khinda
T. +1 202 862 2262

Ivan Loncar
T. +1 212 504 6339

Peter Y. Malyshev
T. +1 202 862 2474

Daniel Meade
T. +1 202 862 2294

Jed Miller
T. +1 212 504 6821

Michael Newell
T. +44 0 20 7170 8540

Alix Prentice
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Rachel Rodman
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Richard M. Schetman
Senior Counsel
T. +1 212 504 6906

Lary Stromfeld
T. +1 212 504 6291

Jonathan M. Wainwright
Senior Counsel
T. +1 212 504 6122

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