Political activities sit at the intersection of law, policy, and reputation. Companies operating in highly regulated industries cannot avoid political law issues, and it is frequently more complex than expected.
This quarterly newsletter highlights a few practical issues we are seeing with clients and a handful of developments worth keeping on the radar.
Virginia Attorney General (AG) Jay Jones has joined an ongoing lawsuit by 23 Democratic AGs challenging Consumer Financial Protection Bureau (CFPB) Acting Director Russell T. Vought’s interpretation of the CFPB’s statutory funding mechanism that would leave the agency without operating funds.
Washington, D.C. and Atlanta – March 2026 – Troutman Strategies (Strategies) and Troutman Pepper Locke’s Regulatory Investigations, Strategy + Enforcement (RISE) team announced the addition of three professionals who deepen the firm’s federal, state, and regulatory capabilities: Jason A. Smith with the RISE team in Washington, D.C. and New York, Audra Hill as state affairs coordinator in Georgia, and Brian Mann as a government affairs specialist on the federal team in Washington, D.C.
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Thursday, March 26 • 12:00 – 1:00 p.m. ET
Gene Fishel will be speaking on the “Cyber Threats – Are You Prepared?” webinar, being held on March 26.
Join professionals from McGriff, the US Secret Service, Troutman Pepper Locke, and A.B. Data to learn more about fraud and cybercrimes. Organizations of all sizes
A recent decision from the U.S. District Court for the Middle District of Tennessee marks a significant development in the ongoing dispute over whether sports event contracts offered on prediction market platforms are properly regulated by the Commodity Futures Trading Commission (CFTC) or whether such contracts should be regulated by the states as sports betting. Tennessee officials had issued a cease‑and‑desist order contending that certain sports‑linked event contracts were akin to unlicensed sports wagering under state law. Prediction contract platform provider, Kalshi, responded by filing suit in federal court, arguing that these contracts were “swaps” governed exclusively by the Commodity Exchange Act and subject to the CFTC’s jurisdiction, not Tennessee’s sports‑betting framework.
New York Attorney General (AG) Letitia James reached a $2.5 million settlement with health insurer EmblemHealth following an investigation of the behavioral health provider “ghost networks.” “Ghost networks” are provider networks in which many of the providers listed in the insurer’s directory of “in-network” providers are actually unavailable, not accepting new patients, or not actually participating in the network. The investigation also focused on compliance with state and federal behavioral health parity laws. As part of the settlement, the insurer will pay more than $2.5 million and undertake changes to its policies and procedures.
As the use of artificial intelligence (AI) becomes more prevalent in day-to-day life and in the legal field, in particular, thorny questions arise regarding the implications of that use. One such question is whether exchanges with a publicly available generative AI platform in connection with pending litigation are protected by the attorney-client privilege or the work product doctrine. In a matter of first impression nationwide, U.S. District Judge Jed S. Rakoff of the Southern District of New York answered that question in the negative and required a defendant to provide the prosecution documents memorializing litigation-related communications with a generative AI platform.[1] Applying traditional principles governing the attorney-client privilege and the work product doctrine, the court reasoned that the communications did not involve an attorney-client relationship, were not confidential, were not made for the purpose of obtaining legal advice, and did not reflect an attorney’s trial strategy.[2] The ruling will likely impact whether legal protections are afforded to AI communications, prompts, and output in both litigation and regulatory inquiries, including state attorneys general (AG) investigations.
Graham K. Bryant, former Principal Deputy Solicitor General and Director of Virginia Appellate Litigation in the Office of the Attorney General of Virginia, has joined Troutman Pepper Locke’s Regulatory Investigations, Strategy + Enforcement (RISE) practice group and Virginia Appellate team. Graham’s practice centers on Virginia-focused appellate and regulatory matters, drawing on his experience handling high-stakes constitutional and policy litigation in Virginia’s courts and in federal courts, including multiple matters before the U.S. Supreme Court.
On February 23, the New York Department of Financial Services (DFS) issued a proposed new Part 423 to Title 3 of the NYCRR to implement New York Banking Law Article 14‑B for Buy-Now-Pay-Later (BNPL) lenders. The proposal would move BNPL firmly into New York’s credit system, imposing licensing, supervision, disclosure, data privacy, and underwriting requirements on both interest‑free and interest‑bearing BNPL products offered to New York consumers. If adopted, the rule would take effect 180 days after the notice of adoption is published in the State Register, with a short transitional period for existing BNPL providers. DFS is accepting pre-proposal comments through March 5, 2026, after which the proposed rule will be published in the New York state register for a formal 60-day comment period.
Today, the Securities and Exchange Commission’s (SEC) Division of Enforcement announced significant updates to its Enforcement Manual, the first comprehensive revision since 2017. These changes, which will now be reviewed annually, are designed to promote greater fairness, transparency, and efficiency in SEC investigations and enforcement actions.