State Attorneys General

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On September 29, 2025, California Governor Gavin Newsom signed Senate Bill 53, the Transparency in Frontier Artificial Intelligence Act, into law. The bill will go into effect on January 1, 2026. The act builds upon the recommendations found in the “California Report on Frontier AI Policy,” which was released to the public on June 17, 2025. This report detailed key principles to guide the legislation drafting process, including grounding AI policy in empirical research and providing greater transparency into AI systems. Given that California is home to 32 of the top 50 AI companies worldwide, the state dominates the AI industry. It is no surprise that California is the first state to create rules promoting safety, transparency, and incident reporting for frontier models. This new act is expected to set the stage for similar AI legislation across the U.S.

On October 7, 2025, Kalshi, a platform specializing in prediction market trading, filed a lawsuit against the Ohio Casino Control Commission (OCCC) and Ohio attorney general (AG), alleging that their regulatory actions overstep state authority. The complaint seeks to block enforcement of a cease-and-desist order that was issued by the OCCC in the spring, which accused Kalshi of “operating online sports gaming” and warned Ohio licensees that partnering with Kalshi could jeopardize their licensing status and integrity.

An Ohio appellate court recently affirmed the dismissal of a case brought by the Ohio attorney general (AG) against Central Tobacco & Stuff Inc. (Central Tobacco), an e-cigarette retailer, in which the AG alleged that Central Tobacco sold e-cigarettes lacking FDA premarket authorization and violated the state’s Consumer Sales Practices Act (CSPA) by failing to inform consumers about the lack of FDA authorization. See State ex rel. Attorney Gen. Dave Yost v. Cent. Tobacco & Stuff Inc., 2025-Ohio-4613 (Ct. App.). This appears to be a novel use of a state consumer protection law, which most states have, to attempt to enforce the Federal Food, Drug, and Cosmetic Act (FDCA). The court concluded that federal law preempts Ohio’s ability to enforce FDCA premarket authorization requirements through the CSPA. The court’s decision may be relevant in other cases involving a state’s attempt to enforce FDA premarket authorization requirements through their consumer protection laws.

In this episode of Regulatory Oversight, Stephen Piepgrass is joined by Zack Condry, co-founder of Watermark Strategies, to analyze the evolving landscape of crisis management and the critical role of strategic communication in navigating complex issues. They explore effective communication strategies, public relations, and the evolving role of AI in managing crises. Zack shares insights from his extensive experience in corporate communications and public affairs, from his background managing political campaigns to his current work developing digital strategies for high-profile clients.

On October 2, New York Attorney General (AG) Letitia James announced that, in accordance with the “Stop Hiding Hate” Act, social media companies are now required to report their content moderation policies to her office, with first reports due no later than January 1, 2026. This legislation, sponsored by Senator Brad Hoylman-Sigal and Assemblymember Grace Lee and signed into law by Governor Kathy Hochul, mandates that platforms operating in New York with more than $100 million in gross annual revenue must post their content moderation policies publicly, provide consumers with a contact to report violations of the policy, and submit biannual reports to James’ office concerning compliance.

In this crossover episode of The Consumer Finance Podcast and Regulatory Oversight, Chris Willis is joined by Joseph DeFazio, Bill Foley, and Michael Yaghi to discuss the implications of New York’s FAIR Act, a significant amendment to the state’s UDAAP statute. The FAIR Act aims to broaden consumer protection by lowering the threshold for legal action against unfair and abusive business practices. With expanded enforcement powers for the state, this legislation could dramatically increase litigation risks for financial services companies operating in New York if the governor signs the bill. Tune in to understand how this legislative shift might affect the industry and what steps businesses can take to prepare.

On September 5, Illinois Attorney General (AG) Kwame Raoul announced the resolution of ongoing litigation against Clearview Electric Inc., an alternative retail electric supplier accused of engaging in fraudulent, unfair, and deceptive business practices. Clearview Energy allegedly misled Illinois consumers into paying significantly higher rates for electricity compared to those who remained with their default public utility.

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Wednesday, October 29 | 1:00 – 3:10 p.m. ET

Mike Yaghi and Lane Page, members of Troutman Pepper Locke’s State Attorneys General practice, along with Stefanie Jackman and Caleb Rosenberg from the Consumer Financial Services practice, will participate in an upcoming CLE webinar with myLawCLE. They will analyze the evolving roles and enforcement priorities of federal and state regulatory agencies, focusing on their impact on consumer financial services.

Massachusetts Attorney General (AG) Andrea Joy Campbell recently filed a lawsuit in Suffolk Superior Court against KalshiEX LLC (Kalshi), an online prediction market platform, alleging that the platform runs an illegal sports wagering operation without an appropriate license in Massachusetts. The complaint asserts that Kalshi offers Massachusetts consumers the equivalent of sports betting under the guise of “event contracts,” letting users wager yes-or-no options on sporting outcomes just like traditional bets. In the AG’s view, these contracts closely resemble sports wagers offered by licensed sportsbooks, and Kalshi actively promoted its sports products via TV and social media in the Commonwealth while allowing trades through third-party apps like Robinhood. Because Kalshi asserts that its event contract business does not constitute gaming, Kalshi never obtained a license from the Massachusetts Gaming Commission to engage in gaming-related activities.