On August 11, 2023, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a new set of Specially Designated Nationals (SDN) blocking sanctions on four prominent Russian businesspeople, as well as an association representing Russian business interests. This announcement, a year and a half after commencement of the Russian-Ukrainian conflict, shows that the sanctions landscape continues to evolve and pose continued legal risk.

The IRS issued a Memorandum last month addressing when an employer may be considered to have experienced a full or partial suspension of operations during the COVID-19 pandemic in 2020 or 2021 for purposes of an employment tax credit, and the agency’s guidance indicates it may be seeking to retroactively narrow availability of the credit.

Ageist robots! As we projected in our previous Client Alert, artificial intelligence tools used to assist in employment decisions have created legal exposure as reflected by the Equal Employment Opportunity Commission’s (EEOC) recent filing and resolution of its first-ever AI discrimination in hiring lawsuit.

On August 23, 2023, the Securities and Exchange Commission (SEC) voted 3-2 to adopt significant changes under the Investment Advisers Act of 1940 (Advisers Act) aimed at enhancing the regulation of private fund advisers including, in some instances, those that are not registered with the SEC. These new rules and amendments will, among other things, have an important impact on how private fund advisers report performance information to investors and utilize side letters to negotiate and attract investment. 

On August 9, 2023, President Biden issued Executive Order 14105 (E.O.), an outbound investment regulation limiting United States persons’ investment in certain ”countries of concern.” The E.O. specifically addresses the administration’s concerns over China’s advancing technology industry, including semiconductors and microelectronics, quantum information technologies, and artificial intelligence, and the effects it could have on the national security of the United States.

Illinois Governor J.B. Pritzker signed House Bill 0219 into law on August 11, 2023, effective immediately. The statutory change will allow heirs of decedents to recover punitive damages in wrongful death actions filed on or after August 11, 2023.

In an unprecedented move, both the New York Senate and Assembly have approved Senate Bill 995, also referred to as the “LLC Transparency Act,” which would require the disclosure of the beneficial owners of limited liability companies (LLCs) in the State of New York. The LLC Transparency Act defines a “Beneficial Owner” to include any individual who, directly or indirectly: (a) exercises substantial control over the LLC; or (b) owns or controls not less than 25% percent of the ownership interests of the LLC. The LLC Transparency Act is currently awaiting Governor Kathy Hochul's signature to become law.

Zoom, the popular videoconferencing application, recently addressed concerns and sparked discussions regarding its updated terms of service (TOS) related to the use of user data for training its artificial intelligence (AI) models. The updates, which became effective on July 27, have prompted conversations about data privacy, ownership, and the ethical implications of AI development.

Following up on its Tri-Seal Compliance Note earlier this year cracking down on third-party intermediaries’ evasion of Russia-related sanctions and export controls, the U.S. Departments of Commerce, Treasury and Justice have issued a new Tri-Seal Compliance Note (“Note”) proposing voluntary self-disclosure (“VSD”) of potential violations of sanctions, export controls, and other national security laws. The Note describes VSD policies of each department that can provide significant mitigation of civil or criminal liability that could extend to non-prosecution agreements or a reduction of 50 percent in the base penalty amount for civil or criminal penalties.