In a recent speech at Vanderbilt University, Acting Comptroller of the Currency Michael Hsu discussed his views on the potential risk of financial instability due to the merging boundaries between banking and commerce. In his speech, Comptroller Hsu underscored the importance of vigilance, especially in the realms of payments and private credit/equity, where he predicts the risk of this ‘blurring’ is most imminent. The Comptroller also advocated for the analytic framework recently adopted by the Financial Stability Oversight Council (FSOC) as having the greatest potential to identify and address emerging financial stability risks.

In the realm of bankruptcy sales, the role of a stalking horse bidder in a Section 363 sale is crucial. This bidder sets the baseline bid, protecting the debtor from receiving unreasonably low bids for its assets. In return, the stalking horse bidder receives certain protections, such as a break-up fee and reimbursement of reasonable expenses, which are outlined in the asset purchase agreement.

Editor’s Note: In recent regulatory and enforcement developments, the White House announced a new executive order aimed at strengthening cybersecurity at U.S. ports, and another executive order was issued to protect sensitive personal information. Additionally, the FCC prohibits using AI to clone voices. Data breach litigation continues to surge with one company striking a class action settlement agreement with payments of up to $75,000 per class member. In an interesting twist, the beauty company L’Occitane is suing a law firm seeking declaratory judgment that California’s wiretapping law is unconstitutional. Internationally, the Canadian government investigates a breach of its own agency, and ASEAN and the EU published a joint guide on cross-border contractual clauses.

The Federal Deposit Insurance Corporation (FDIC) recently announced a consent order with Tennessee-based Lineage Bank containing orders relating to the bank’s third-party risk management program and its financial technology (fintech) partners.

It was a busy year for enforcement activity in the cyber, crypto, SPAC, and whistleblower spaces, with several pending actions that will likely have wide-ranging implications in 2024. We are also awaiting a ruling from the U.S. Supreme Court that could alter the landscape on administrative law proceedings. From the SEC’s release of expansive cybersecurity rules to the largest whistleblower award ever issued, 2023 had plenty of exciting developments. A detailed summary of key developments by category can be found below.

James Stevens, co-leader of Troutman Pepper’s Financial Services Industry Group, was quoted in the February 27, 2024 Vixio article, “Georgia Clarifies Merchant Acquirer Law as Firms Submit First Applications in a Decade.”

“There is at least one large company that is seriously considering filing an application. And we have had a number of…

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) recently announced a Notice of Proposed Rulemaking (NPRM) aimed at keeping bad actors from exploiting the U.S. financial system and assets through investment advisers. Specifically, it would require certain investment advisers to apply Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) requirements pursuant to the Bank Secrecy Act (BSA), including implementing risk-based AML/CFT programs, reporting suspicious activity to FinCEN, and fulfilling recordkeeping requirements such as those relating to the transmittal of funds (i.e., comply with the Recordkeeping and Travel Rule). FinCEN is proposing to delegate its examination authority to the SEC.

On February 9, the Securities and Exchange Commission (SEC) announced settlements with 16 firms relating to record-keeping violations stemming from off-channel communications totaling $81 million. The 16 firms were five broker-dealers (BD firms), seven dually registered broker-dealers and investment advisers, and four affiliated investment advisers (IA firms). Off-channel communications are unapproved methods of communication used for business-related communications.

Troutman Pepper recently published its 2023 Privacy Year in Review, a comprehensive analysis of the year’s key developments in privacy, security, and artificial intelligence, which offers practical advice for companies navigating the bewildering number of virtual threats and technological advancements. This annual guide to global trends, risks, best practices, and detailed case studies is a collaborative effort of our Privacy + Cyber and Regulatory Investigations, Strategy + Enforcement (RISE) teams. It aims to serve as a vital resource to help companies address current cybersecurity, privacy, and data protection challenges and prepare for future ones.