The growing use of video and automated technology, including artificial intelligence (AI), in employment practices—and the concern that the technology may foster discrimination and bias—has triggered a wide array of regulatory efforts. At least 11 statutes have been introduced targeting the use of AI-related technology to assist with employment decisions. Employers should take note of enacted and proposed legislation and consult with legal counsel before implementing automated employment technologies.
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Starting January 1, 2024, the Corporate Transparency Act (CTA) will go into effect. All entities formed or registered to do business in the United States will need to either confirm they qualify for an exemption from the CTA’s reporting requirements or timely submit a beneficial ownership information report to the U.S. Treasury’s Financial Crimes and Enforcement Network (FinCEN). Learn more about the regulatory compliance of the CTA in this high-level overview.
The Senate Bill 54 (the “SB 54”) was signed into law in California and will take effect March 1, 2025 for all investments made during calendar year 2024. The law will require “covered entities” to report the demographic information of “founding team members” of all companies in which the covered entity has invested. The law is meant to address the lack of venture capital funding flowing to diverse founders and is the first of its kind.
The advances and integration of artificial intelligence (AI) in financial markets are raising novel risks for broker-dealers and investment advisors. The risks include, but are not limited to conflicts of interest, market manipulation, deception, fraud, data privacy, and discrimination. Recognizing the risks, the U.S. Securities and Exchange Commission (SEC) have already proposed laws and established a specialized team to address emerging issues and risks around AI.
Acknowledging both the potential and the challenges associated with artificial intelligence (AI), the White House has issued a 100-plus page Executive Order titled “Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence” and accompanying “Fact Sheet” summary.
Several trends are influencing the property market, including the high costs of reinsurance, which primary insurers typically pass along to policyholders; strong demand for limited capacity; ongoing losses; and inflation of property values. These conditions are expected to persist in a challenging insurance market that is driving companies to explore and use captive insurance arrangements that allow for flexibility and risk-financing options.
Under the Corporate Transparency Act (CTA) and starting January 1, 2024, companies created in the United States will have to disclose and file certain information with respect to individuals owning more than 25% of the company or otherwise having control over the company. In this interview with Brian Lucareli, attorneys James Howard and Stephanie Derks explain the CTA, the new reporting rules, and how it will impact family offices.
On August 24, 2022, the California Attorney announced a settlement with Sephora, Inc. that included a fine of $1.2 million for alleged violations of the California Consumer Privacy Act (CCPA). The settlement is important because it makes clear that the use of analytics, advertising cookies, and other automatic data collection technologies are a "sale" under the CCPA. Businesses that are subject to the CCPA (and the upcoming CPRA) should immediately review their CCPA compliance to minimize being a potential target of further enforcement actions.
From a litigation perspective, the shifting economic environment's impact on family offices has been about how bad results and different risk tolerance can cause conflicts between multiple stakeholders. At the core family level, friction between family members has often centered around the dividends and determining the asset distribution.
Ransomware is one of several common cybersecurity risks companies face today. In addition to being a victim of a cyber attack, these companies may become the target of lawsuits alleging a variety of harms, including failure to deliver contractual promises and negligent cybersecurity practices. By being prepared and employing practical strategies, companies can safeguard against a ransomware attack and mitigate other cybersecurity risks.