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Business Crimes Bulletin

September 2025
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Features

SEC’s Cybersecurity Unit to Focus on ‘AI Washing’ Image

SEC’s Cybersecurity Unit to Focus on ‘AI Washing’

David Chase & Scott Silver

The SEC recently created the Cybersecurity & Emerging Technologies Unit, which is responsible for rooting out fraud schemes related to AI, including fake social media sites, and blockchain and crypto fraud. As a result, SEC whistleblowers will have an opportunity to play a key role in providing the SEC original information leading to investigations and prosecutions of AI cases, commonly known as “AI washing.”

Features

‘Confidential Witnesses’ Under the Private Securities Litigation Reform Act Image

‘Confidential Witnesses’ Under the Private Securities Litigation Reform Act

Jay Dubow & Erica H. Dressler & Milica Krnjaja

'Confidential witnesses' can offer plaintiffs a strategic advantage in the early stages of a securities fraud case. Courts must accept well-pleaded allegations at the motion to dismiss stage, even if they are anonymous. A critical task for any court reviewing a complaint with confidential witness allegations is to scrutinize the reliability of these claims.

Features

Second Circuit Panels Diverge on Applying Supreme Court’s Narrowing of Fraud Statutes Image

Second Circuit Panels Diverge on Applying Supreme Court’s Narrowing of Fraud Statutes

Robert J. Anello & Richard F. Albert

Two recent U.S. Court of Appeals for the Second Circuit decisions illustrate lower courts’ differing approaches to the U.S. Supreme Court’s running rebuke of overly expansive interpretations of the mail and wire fraud statutes.

Features

UK’s ‘Failure to Prevent Fraud’ Offence Takes Effect Image

UK’s ‘Failure to Prevent Fraud’ Offence Takes Effect

Rob Dalling & Lucy Blake & André Nwadikwa

On Sept. 1, 2025, the UK’s new ‘Failure to Prevent Fraud’, introduced by the Economic Crime and Corporate Transparency Act (ECCTA), takes effect, representing a decisive shift in corporate criminal liability. For legal and compliance teams, the challenge is moving from reactive response to proactive prevention, backed by demonstrable procedures.

Features

FTC’s ‘Click-to-Cancel’ Rule Blocked But Experts Say to Comply Anyway Image

FTC’s ‘Click-to-Cancel’ Rule Blocked But Experts Say to Comply Anyway

Brendan Pierson

Subscription businesses may have breathed a sigh of relief when a federal appeals court blocked the Federal Trade Commission’s “click-to-cancel” rule in July, but legal experts say they should scale back their compliance efforts only modestly, or perhaps not at all.

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MOST POPULAR STORIES

  • Private Equity Valuation: A Significant Decision
    Insiders (and others) in the private equity business are accustomed to seeing a good deal of discussion ' academic and trade ' on the question of the appropriate methods of valuing private equity positions and securities which are otherwise illiquid. An interesting recent decision in the Southern District has been brought to our attention. The case is <i>In Re Allied Capital Corp.</i>, CCH Fed. SEC L. Rep. 92411 (US DC, S.D.N.Y., Apr. 25, 2003). Judge Lynch's decision is well written, the Judge reviewing a motion to dismiss by a business development company, Allied Capital, against a strike suit claiming that Allied's method of valuing its portfolio failed adequately to account for i) conditions at the companies themselves and ii) market conditions. The complaint appears to be, as is often the case, slap dash, content to point out that Allied revalued some of its positions, marking them down for a variety of reasons, and the stock price went down - all this, in the view of plaintiff's counsel, amounting to violations of Rule 10b-5.
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