Cabinet News & Views

In This Issue ...

It's hard to read a business publication these days without seeing headlines on Russia sanctions, crypto and the SEC's new climate-related disclosure rules. It is no different this week.

We weren't at all surprised to see the continued escalation of Russia sanctions, and as James Treanor and Duncan Grieve note in a “Take Five” commentary, even harsher measures are still at the disposal of the United States and the European Union.

On crypto, James Frazier, who leads our ERISA team and also serves as co-chair of our Financial Services Group, addresses the Department of Labor release last month cautioning ERISA plan fiduciaries to use “extreme care” when considering including a cryptocurrency or other related option as part of a self-directed 401(k) plan’s menu of investment choices. We also look at the UK government's plan to become a “global hub” for the cryptoasset industry.

This week's “In Depth” article provides a very helpful guide for public companies with regard to the U.S. Securities and Exchange Commission's proposed amendments to Regulation S-K and Regulation S-X that would mandate significant additional climate-related disclosures for public companies. Peeling back some of the complexity, members of our Global Litigation, Corporate and Capital Markets teams − Jason Halper, Erica Hogan, Michael Ruder and Lauren Russo − offer next steps for public companies in advance of the new rules.

We welcome your comments and questions. Just write to us here.

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

New Round of Russia Sanctions

By James A. Treanor

Special Counsel | White Collar Defense and Investigations

By Duncan Grieve

Special Counsel | White Collar Defense and Investigations

Following reports of alleged atrocities committed by Russian forces in parts of Ukraine, the United States and the European Union have announced significant new economic sanctions aimed at further cutting off Russia from international markets.

By Ellen V. Holloman

Partner | Global Litigation

By Zack Schrieber

Associate | Global Litigation

On April 1, Judge Terry Green of the Los Angeles Superior Court struck down California’s AB 979, which required publicly held companies based in California to have at least one board director from an “underrepresented community” by the end of 2021 and to set parameters for additional board diversity by the end of 2022. A company’s failure to diversify its board could have led to fines totaling hundreds of thousands of dollars.

By Daniel Meade

Partner | Financial Regulation

The Federal Reserve Board (“FRB”) announced on April 5 that it had entered into six separate consent orders with individuals who were previously employed at a state member bank or bank holding company (“BHC”) within the FRB’s jurisdiction. The consent orders prohibit each of the individuals from employment in the banking industry. The FRB stated that each of the prohibited individuals fraudulently obtained loans or grants under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”).

By Michael Sholem

Partner | Financial Services

On April 4, the UK government announced plans to become a “global hub” for the cryptoasset industry with proposals for the regulation of stablecoins, development of an NFT (non-fungible token) issued by the Royal Mint, together with other measures, including the introduction of a “financial market infrastructure sandbox” to help firms experiment and innovate.

By James Frazier

Partner | Executive Compensation, Benefits & ERISA

The U.S. Department of Labor last month issued Compliance Assistance Release No. 2022-1 - 401(k) Plan Investments in “Cryptocurrencies” (the “Release”) in which it strongly cautions ERISA plan fiduciaries to use “extreme care” before considering the inclusion of a cryptocurrency or other related option as a choice on a self-directed 401(k) plan’s menu of investment choices. In the Release, the Department noted that it had become aware that certain firms were marketing cryptocurrency-type investments as potential options for 401(k) plans.

By Jason M. Halper

Partner | Global Litigation

By Erica Hogan

Partner | Corporate

By Michael J. Ruder

Special Counsel | Capital Markets

By Lauren Russo

Law Clerk | Corporate

On March 21, the U.S. Securities and Exchange Commission proposed far-reaching amendments to Regulation S-K and Regulation S-X that would mandate significant additional climate-related disclosures for public companies. If adopted as proposed, the amendments would impose significant reporting requirements on registrants, which in turn would increase compliance costs and require additional managerial time and attention. Although the proposed rules contain various phase-in periods dependent upon filer status, there are steps that public companies can act on today to prepare for the new rules.