Expert Analysis

• AI Investment Advice May Fail Investor Protection Rules

  

  Based on an ongoing study of artificial intelligence platforms' investment advice given to retail investors, direct access to AI may not yield recommendations for typical households that are suitable under relevant securities rules, raising new and important issues in the regulation of financial markets, says Bruce Carlin at Rice University.

• Startup Founder Disputes Increasingly Turn On Governance

  

  Recent Delaware developments suggest that as courts place increasing emphasis on board process, independence and oversight in founder-led startups, the growing intersection of governance, technology risk and investor oversight is accelerating both the emergence and escalation of founder disputes, says mediator Frank Burke.

• 3 AI Adoption Mistakes GCs Should Avoid

  

  The pressure in-house legal teams face to quickly adopt artificial intelligence tools, combined with budget constraints and the need to evaluate a crowded market of options, sets the stage for implementation mistakes that are often difficult to undo, says former 23andMe general counsel Guy Chayoun.

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  Playing Basketball Makes Me A Better Lawyer

  

  My grandfather used to say "I wear your jersey" as shorthand for wholly committing to support someone with loyalty and integrity — ideals that have shaped my life on the basketball court and in legal practice, says Tracy Schimelfenig at Schimelfenig Legal.

• New Cuba Sanctions Raise Risks For Foreign Banks, Cos.

  

  President Donald Trump's bold move leveling secondary sanctions against Cuba expands enforcement risk for foreign banks and companies with no U.S. nexus, signaling that non-U.S. businesses should reassess related transactions, counterparties and exposure as regulators test this broader authority, say attorneys at Troutman.

• How Del. Courts Will Likely Evaluate AI Oversight Claims

  

  While no Delaware court has thus far adjudicated a claim based on alleged board failures to oversee artificial intelligence risk, recent Court of Chancery decisions suggest that familiar Caremark principles will be applied in predictable but consequential ways, particularly when AI touches mission‑critical operations, say attorneys at WilmerHale.

• SEC Clarifies 'Baby Shelf' Restrictions For Small Cos.

  

  For smaller public companies looking to access the capital markets, the so-called baby shelf requirements can be a significant limitation, but recent guidance from the U.S. Securities and Exchange Commission helps to alleviate the effect of subsequent baby shelf restrictions on an at-the-market facility, say attorneys at Faegre Drinker.

• How Cos. Can Navigate Iran Sanctions Risks In China

  

  For multinational financial institutions and other companies caught between the U.S. and China’s competing compliance regimes as they relate to Iranian oil, finding a path forward will require careful, jurisdiction-specific analysis, say attorneys at Perkins Coie and Ashurst.

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  The Biz Court Digest: Georgia Court Has Business On Its Mind

  

  Thanks to recent legislation, the Georgia State-wide Business Court will soon offer business litigants greater access to the court than ever before, further enhancing the court's emphasis on efficiency, predictability and accessibility for sophisticated commercial disputes, says former GSBC judge Walt Davis at Jones Day.

• Key Tronic Case Shows SEC Isn't Ignoring Controls Violations

  

  The U.S. Securities and Exchange Commission's first nonfraud enforcement action against a public company during Chairman Paul Atkins' tenure reflects the commission’s willingness to bring enforcement actions that charge books and records and internal controls violations, despite deviating from policing technical violations, say attorneys at Cooley.

• Operational AI Washing: A New Securities Class Action

  

  In rising claims of operational AI washing — plaintiffs alleging that artificial intelligence was invoked to explain corporate business decisions in ways that may obscure underlying financial distress — earnings calls, restructuring disclosures and board-level communications will serve as key defense evidence, say attorneys at Akerman.

• 4 Emerging Approaches To AI Protective Order Language

  

  Over the last year, at least five federal district courts have issued or analyzed specific protective order provisions restricting the use of generative artificial intelligence platforms with protected materials, establishing that proactive AI-specific provisions are now standard practice and demonstrating that no single model works for every case, says Joel Bush at Kilpatrick.

• GCs Can Read Debt Cycles To Spot Risk, Opportunity

  

  With the conflict in Iran among many other factors that are further unsettling the geopolitical and economic environment, general counsel who understand credit risk and the debt cycle can offer a significant competitive advantage to help companies mitigate enterprise risk, says Samuel Keltner at Akin.

• Understanding The Legal Risks Of Fragile Supply Chains

  

  To ensure supply chain resilience in times of crisis — such as the recent blockage of the strategically vital Strait of Hormuz — it is important for everyone involved in the chain to understand the distribution arrangements and laws applicable across jurisdictions, say lawyers at Brown Rudnick.

• Heppner Ruling Left AI Privilege Risk For Lawyers Unresolved

  

  While a New York federal judge’s recent ruling in U.S. v. Heppner resolved a privilege question surrounding client-side artificial intelligence use, it did not address how to mitigate the risks that can arise when confidential information enters the operative context of an AI system used by an attorney, says Jianfei Chen at Quarles & Brady​​​​​​​.