Significant political developments in 2016 set the stage for potentially big shifts in regulation, international relationships and enforcement activity in the year ahead. How these factors play out — and the subsequent impact they have on business activity — remains to be seen. We offer our take on the corporate, litigation and regulatory developments most likely to influence the world our clients must navigate.
Editorial board: Thomas H. Kennedy, Stephen F. Arcano, Boris Bershteyn, Christopher W. Betts, Mark S. Chehi, Marc S. Gerber, Stacy J. Kanter, Mark A. McDermott, Edward B. Micheletti, William J. Sweet, Jr., Sally A. Thurston, Michael J. Zeidel
Corporate
Capital Markets
Volatility and Uncertainty Continue in the US Capital Markets
Following continued volatility in 2016, the performance of U.S. capital markets this year will largely depend on how the Trump administration implements its policies, and how those policies complement or contradict one another in their impact on the capital markets.
Trump's Focus on Deregulation Could Shape SEC Priorities in 2017
With a promise to undo regulations and oversee the financial sector differently from his predecessor, President Donald Trump has indicated a clear intention to shift the SEC’s agenda on both regulatory and enforcement matters.
Trump Infrastructure Plan May Open Opportunities for Projects
Though some question the viability of President Donald Trump's infrastructure plan, his emphasis on private investment would require more frequent use of public-private partnerships, increasing opportunities for private sector participants and spurring financial innovation.
Mexican Energy Sector Restructuring: New Opportunities for Renewables
Mexico presents attractive opportunities for investors in renewable energy projects. However, recent changes remove important investment protections, making the assessment of curtailment and other risks more significant.
Corporate Restructuring
Oil and Gas Industry Seeks Steady Ground Following Year of Restructurings, Restrictive Lending
Stable oil prices should decrease the number of restructurings in the industry this year, and opportunistic buyers, including recently restructured companies, may look to add attractive assets to their portfolios.
M&A/Governance
Mergers and Acquisitions: 2016 Update
Following a strong year for global M&A (despite a drop-off from the record levels set in 2015), the potential policy direction under President Donald Trump indicates areas of likely change that could meaningfully, and generally favorably, impact the M&A environment.
Regional Focus: Europe
The uncertainty surrounding Brexit continues to impact M&A and capital markets activity throughout the continent. We explore the trends in the U.K., France and Germany.
Regional Focus: Asia
The influence felt by economic and political factors, both domestic and international, will continue to impact M&A and capital markets activity in China, Japan and India.
Directors Must Navigate Challenges of Shareholder-Centric Paradigm
Directors face a complicated corporate governance landscape. How well they manage the often inconsistent demands of multiple constituencies while pursuing the best interests of the corporation and its stockholders is critical to their organizations' success.
US Corporate Governance: Will Private Ordering Trump Political Change?
Given the popularity of current corporate governance practices with shareholders, the legal and regulatory changes envisioned under the Trump administration may ultimately have little impact, if any, in this area.
Trump’s Proposed Changes to Tax, Dodd-Frank, DOL Could Impact Executive Compensation
President Donald Trump’s campaign proposals included changes to tax rates and the Dodd-Frank Act, as well as a suggestion that the DOL fiduciary rule could be reversed. If enacted, such proposals would have a significant impact on executive compensation.
Navigating the Challenges of Chinese Acquisitions of US Insurers
Chinese investors can be successful acquirers in the U.S. market with the right preparation and understanding of the expectations of state insurance regulators as well as willingness to share some aspects of regulatory risk with sellers.
Litigation
2016-17 Supreme Court Update
In a season of political surprises, the eight-member U.S. Supreme Court has stirred no controversy with its unanimous decisions so far this term. But potentially significant cases remain on the docket, possibly awaiting the addition of the ninth justice.
Near-Record Securities Litigation Filings Show No Signs of Slowing
The underlying trends that have driven an increase in the number of securities class action filings are likely to continue this year, while significant cases relating to class certification should further shape the securities litigation landscape.
A Trump-Appointed AG May Not Translate to Less Aggressive Enforcement
Economic realities, changing global dynamics and the promise of deregulation could impact DOJ enforcement on areas like FCPA prosecutions and cases against financial institutions while leaving a focus on individual culpability unchanged.
Key Developments in Delaware Corporation Law in 2016
Significant changes in Delaware merger litigation and settlement practice in 2016, as well as case law developments, will continue to affect merger parties and litigants in 2017 and beyond.
In Chinese Investment Treaties, Questions Arise on Who Qualifies for Protection
Despite a changing political climate with regard to investment treaties and free trade agreements around the world, the Chinese investment treaty system remains firmly in place, with one recurring question: who qualifies for protection as "Chinese" investors.
PEMEX and US Enforcement of Foreign Arbitration Awards Nullified in Their 'Home' Courts
Deference paid by U.S. courts to the decisions of foreign courts is far from absolute. In 2016, the Second Circuit held that, under the right circumstances, U.S. courts may enforce international arbitration awards even when foreign jurisdictions annul them.
Business and Human Rights Movement Spurs Development of Remedial Options
As governments and businesses increasingly reflect the U.N.'s Guiding Principles on Business and Human Rights in their policies and agreements, the potential avenues for redress of alleged wrongdoing beyond U.S. courts continue to develop.
Regulatory
Financial Regulation
The Trump Impact: Key Issues in Financial Services Reform for 2017
Republican control of the executive and legislative branches of the federal government likely will lead to financial services deregulation, which would most benefit community and regional banks and create opportunities down the line for bank M&A.
Future of Sanctions on Iran, Russia and Cuba Uncertain Under Trump
President Donald Trump has been critical of the Obama administration’s approach to Iran, Russia and Cuba, raising the prospect of sanctions-related policy changes. Regardless, we expect continued vigorous enforcement of sanctions violations by federal and state regulators.
Blockchains Offer Revolutionary Potential in Fintech and Beyond
Blockchains have been heralded as a transformative technology with the potential to fundamentally change the financial system and any data-heavy industry, but the technology's implementation will depend, in part, on what regulations are introduced for its use.
The Uncertain Future of the Consumer Financial Protection Bureau
The CFPB continues to aggressively enforce federal consumer protection laws, but a recent appeals court ruling on the constitutionality of the CFPB's single-director structure and Donald Trump's election threaten to disrupt the regulator's operations.
Reform, Not Repeal, Likely for US Swaps Regulations
Potential repeal of the Dodd-Frank Act is expected to lead to important reforms, not wholesale repeal, of CFTC swaps regulations governing areas such as reporting, trading, clearing and cross-border.
Change in Administration Presents Opportunity to Revisit DOL Fiduciary Rule
Unintended consequences on the broker-dealer industry, combined with promises from the White House and Congress to significantly deregulate the financial sector, open the door for the DOL’s new regulations to be reconsidered before they become applicable.
Other Regulatory Developments
Antitrust Enforcement in the Trump Administration
Despite campaign trail comments suggesting an aggressive antitrust approach, President Donald Trump's appointment of Joshua Wright to lead his transition team suggests a tempering in the level of activity that characterized the Obama administration.
Big Data an Ongoing Concern for EU Competition Law
The EU continues to grapple with the issue of how "big data" should be treated in merger control and antitrust enforcement, including the issue of whether access to and use of big data confers market power in relation to a particular goods or services market.
CFIUS and Foreign Investment Reviews in 2017 and Beyond
The new administration is expected to take a multipronged approach to foreign investment. While most foreign acquisitions and investors will be welcomed, those presenting potential national security issues can expect more searching CFIUS reviews.
Despite Aversion to Regulation, Trump May Expand Cybersecurity Efforts
Despite President Donald Trump’s expressed antipathy toward regulation, he has indicated an interest in strengthening the country's cybersecurity efforts. It appears unlikely that his administration will try to dramatically weaken U.S. laws in this area.
FERC Could See Substantial Changes Under President Trump
Because of economic and regulatory realities, FERC’s influence under the Trump administration may have the greatest impact on the rules governing the organized markets for electricity. That said, policy direction will come more from a new chairman than the White House.
Legislative, Regulatory and Judicial Challenges to the 2015 Ozone National Ambient Air Quality Standards
The filibuster may ultimately prevent substantial amendments to existing environmental statutes such as the Clean Air Act, leaving the courts to decide the fate of recently enacted environmental regulations.
Republicans Chart New Course for US Health Care System
Replacement of the ACA is a top priority for President Donald Trump and Republicans in Congress. To what degree Democrats and interest groups can successfully oppose them remains to be seen; however, changes are likely to impact drug pricing and innovation and Medicaid.
Significant Changes Likely for US Trade Policy and Enforcement
The Trump administration has promised potentially seismic shifts in U.S. trade policy, with the likelihood of more aggressive enforcement of U.S. trade laws and negotiation and renegotiation of important U.S. trade agreements, among other changes.
Trump Expected to Alter Labor Laws, Policies
The Trump administration is likely to substantially shift federal labor and employment laws, regulations and enforcement priorities set by President Barack Obama, which in turn may prompt more legislative action at state and municipal levels in some parts of the country.
Business Tax Reform All but Certain in US, Europe
Tax reform in the U.S. seems highly likely following the November election. In Europe, nations continue to increase regulatory oversight of cross-border transactions and push for transparency against the backdrop of Brexit.
Income, Wealth Transfer Tax Changes Likely Under New Administration
President Donald Trump and the House GOP have indicated support for significant changes to the estate tax as part of comprehensive federal tax reform. High-net-worth individuals should consider the estate planning consequences of any such changes.