Last month, when I assembled my list of the Top D&O Stories of 2024, I not only designated the November 2024 election of Donald Trump to a second Presidential term as last year’s top story but I also suggested that the advent of his second administration would likely be the top story of 2025 as well. We are now just four weeks into the Trump’s second term, and it is clear that my prognostication about the impact of the new Trump administration is truer than I ever imagined and in ways that I never foresaw.

The purpose of this post is to try to compile in one place a list of the ways in which – at least so far and at least as far as we know – the early actions of the new Trump administration has already impacted or will impact the world of D&O liability and insurance.

I note at the outset that this list is almost certainly incomplete, because there have been so many changes and because the possible impacts from the changes are potentially so far reaching, it might not be possible to assemble a complete list in one place, at least given the constraints of the blogging format.

I also note at the outset that one challenge in trying to assemble this list is the problem of organization. Even arguably obvious ways to try to structure the various developments – such as, for example, in chronological order, or in order of importance – present their own difficulties. So rather than trying to impose order or structure that the circumstances may not support, I have tried to assemble the list in a way that makes sense to me.

DEI: Among President Trump’s first acts of his second presidency was his issuance of two Executive Orders (here and here) designed to restrict diversity, equity, and inclusion (DEI) initiatives, particularly with respect to federal agencies, programs, contracts, and hiring. The executive orders, by their own terms, aim to target “illegal DEI.” Among other things, the first of the two executive orders directs the Attorney General to compile a report within 120 days recommending actions to enforce “Federal civil-rights laws” and “encourage the private sector to end illegal discrimination and preferences, including DEI.” (The two Executive Orders, it should be noted, are the subject of a court challenge.)

The anti-DEI actions have not been limited just to the While House itself. Among the many new policy statements issued by new Attorney General Pam Bondi after taking office was a February 5, 2025 memoranda in which the AG directed the Department of Justice’s Civil Rights Division to” investigate, eliminate, or penalize companies in the private sector and educational institutions that receive federal funds” that maintain “illegal DEI preferences.”  (I think her use of the word “eliminate” was with reference to the supposed preference, not with respect to the companies themselves.) Other federal agencies have gotten into the act; indeed, the FCC has advised Comcast, the parent company of NBC News and Universal studios, that the agency is investigating DEI programs at the company. (The FCC has also broadly indicated that it intends to investigate DEI practices at other companies it regulates.)

Many companies appear to be acting in response to the administration’s messages on DEI. To be sure, a host of companies – including Ford, Harley Davidson, and Walmart – had already announced they were dialing back their DEI programs even before last November’s election. But now companies that had not previously acted are taking the initiative. Last week, Goldman Sachs announced it was dropping its DEI requirements for IPO company boards. Other firms that have recently announced a pullback on DEI initiatives include Disney and PBS.

The change in direction on DEI not only creates PR and political risks for companies. It also creates regulatory, investigative, and potential claims risks as well. The AG’s anti-DEI statements were not just intended to send a message; her statements were also clearly meant as a threat — she specifically said that the DOJ’s Civil Rights Division will “investigate” and “penalize” companies that maintain “illegal” DEI preferences. Private litigants undoubtedly will not be far behind; even in advance of the new Trump administration, activists had been bringing anti-DEI lawsuits, as discussed, for example, here. In light of the new climate under the Trump administration, these activists are likely to be further emboldened.

As detailed in the February 10, 2025, New York Times article entitled “Alarmed, Companies Ask: What is ‘Illegal DEI?’” (here), these developments create uncertainty and risk. Companies, worried that their hiring, training, and advancement policies might be characterized as “illegal DEI” and attract regulatory actions or lawsuits, are resorting to “rainbow hushing” – that is, quietly dropping or rebranding their prior workplace efforts. One lawyer who counsels companies on employment issues is quoted in the article as saying “People are freaking out.” Among other concerns, companies and their advisors are concerned that if companies pull back too far, it could look bad if the company is later sued for discrimination by protected minorities.

The bottom line is that the issues surrounding DEI have become perilous and uncertain. It seems probable that there will be regulatory and enforcement activity, and further litigation as well.

The SEC: Even before Trump took his oath of office for his second administration, it was apparent that there would be changes coming at the SEC. As I noted in my year-end roundup of D&O stories, Trump’s designee as SEC Chair, Paul Atkins, is seen as likely to change many of the policies under of the agency’s immediate past Chair, Gary Gensler. Indeed, Atkins has been called the “Anti-Gensler.”

But even though Atkins’s nomination has not yet been confirmed, changes are already afoot at the SEC. It is relevant that among President Trump’s actions upon taking office for the second time was the issuance of yet another Executive Order (here), aimed at promoting the growth of cryptocurrencies and “eliminating regulatory overreach.”

Consistent with the approach outlined in the Executive Order, the SEC has scaled back its Cryptocurrency Enforcement Unit, which had been staffed by 50 lawyers and other personnel. The agency has also formed a new Crypto Task Force, to be chaired by Commissioner Hester Pierce, to develop a crypto regulatory structure. Pierce’s February 4, 2025 position paper on crypto (here) makes for interesting reading.

In addition, the agency’s  Republican commissioners have told lawyers at the agency that they need to seek permission from the politically appointed leadership before formally launching probes. Under the prior administration, the authority to launch formal investigations had been delegated to lower-level staff. The Commission had the right of refusal — something that it didn’t always exercise.

There are a host of areas in which commentators have suggested that the SEC under the new administration will take a more restrained approach, as discussed in detail, for example, here. Many of these developments, to the extent likely to happen and all, seem likely to await Atkins’s confirmation as the SEC’s Chair.

But in the meantime, there have already been other developments in other contexts that also seem likely to affect the SEC’s regulatory and enforcement approach, as discussed below.

Climate Change: Among other changes that commentators had predicted that the SEC might take under the new administration would be that it would either withdraw or non-enforce the SEC’s new climate change disclosure guidelines, which were finalized in March 2024. The new guidelines are the subject of a court challenge in the Eighth Circuit. The SEC had previously stayed the effectiveness of the rules pending the outcome of the challenge.

Now, as discussed here, the SEC’s litigation team has asked the Eighth Circuit to hold off scheduling oral argument in the court challenge. The SEC’s action in the case comes in the wake of a February 11, 2025 directive from Acting Chair Mark Uyeda. Uyeda’s statement summarized the objections to the guidelines that he and Commissioner Pierce had previously stated in their dissents to the adoption of the guidelines. Among other things, Uyeda stated that he believes the guidelines are “deeply flawed and could inflict significant harm on the capital markets and our economy.” 

In his February 11 directive, Uyeda went on to state that in light of changes in the composition of the commission, as well as the new administration’s action on regulations, the agency was requesting that the Eighth Circuit not schedule oral argument in the case, until such time as the agency can advise the court of its determination about its position in the litigation. (The sole remaining Democratic Commissioner, Caroline Crenshaw, dissented from this action.)

While it remains to be seen what will happen next, it seems likely that Uyeda’s interim action foretells the death knell for the SEC’s climate change disclosure guidelines. Many companies may welcome this development, as the guidelines were seen in many quarters as burdensome and as expensive to comply with.

However, the end of the SEC guidelines will not necessarily mean that companies will be entirely free of climate change disclosure obligations. Companies doing sufficient levels of business in the EU will be subject to the EU’s sustainability disclosure guidelines, and company’s subject to California’s disclosure requirements will also have to comply with the California disclosure guidelines. Not uncoincidentally, and as discussed in detail here, a federal district court recently dismissed two of the claims challenging California’s climate change disclosure requirements. 

The Foreign Corrupt Practices Act: In yet another Executive Order issued on February 10, 2025 (here), President Trump has announced that, in order to “advance American economic and national security by eliminating excessive barriers to American commerce abroad,” his administration is “pausing” the enforcement of the Foreign Corrupt Practices Act (FCPA).

The Executive Order directs that during the 180 days following the order, the Attorney General is to cease any new FCPA enforcement actions, as well as to review existing actions in order to take “appropriate actions,” while at the same time the AG is to be reviewing policies governing investigations and enforcement of the Act. Future FCPA enforcement actions are to be governed by guidelines to be established by the AG after the 180-day period.

There are several things that are worth thinking about in connection with the administration’s action to pause the enforcement of the Act. The first, from the perspective of potentially targeted companies, FCPA enforcement actions are enormously costly to defend and can be expensive to settle. The second is that in recent years, FCPA actions have frequently targeted companies domiciled outside the U.S. but otherwise subject to jurisdiction in the U.S. On this latter point, the administration’s action could potentially be as beneficial to non-U.S. companies – if not more so – than to U.S. companies. Another point that should not overlooked in this context is that FCPA actions frequently trigger follow-on civil litigation, which can also be expensive to defend and settle.

All of that said, it should also not be overlooked, as pointed out in a post by Liz Dunshee on TheCorporateCounel.net blog (here), that the Department of Justice is not the only agency with authority to bring enforcement actions under the FCPA. The SEC still has power to bring civil enforcement actions under the FCPA. In particular, the SEC enforces the books and records provisions of the FCPA, which are codified in the Securities and Exchange Act. It remains to be seen how the SEC’s policies will align with those of the DOJ, particularly of the SEC’s obligation to protect the interests of investors and markets.

For now, it is uncertain what will happen at the end of the 180-day period. The outcome of the pause is unlikely to be a return to the approach to FCPA enforcement in place prior to the current Trump administration. The approach the administration adopts at the end of the 180-day period could have significant impact on an important area of corporate risk and exposure.

The Department of Justice: As noted above, shortly after taking office, the new AG Pam Bondi issued a slew of statements in which she established a number of policy directives. Among other things, she set up a task force to investigate the “weaponization” of the Department of Justice. A complete list of Bondi’s statements can be found here.

Perhaps more importantly for purposes of this blog post, the AG also redirected DOJ resources to further the President’s goals of attacking cartels and transnational criminal organizations by shifting the DOJ’s priorities away from corporate enforcement to illegal immigration; transnational organized crime; cartels and gangs; human trafficking and smuggling; and protecting law enforcement personnel.

This shift in priorities toward the investigation of cartel and transnational criminal activity likely signals a shift away from corporate investigations – among other things with respect to FCPA investigations and enforcement. While all of this has yet to play out, it does seem as if white collar crime and financial crimes (at least if unrelated to cartel or criminal organizations) will figure less in DOJ investigation and enforcement under the current AG.  

Other Regulatory and Administrative Changes: While the new guard at the SEC and at the DOJ has already signaled changes, with respect to some other federal agencies, the new administration has brought in the wrecking ball. Among other agencies that the Trump administration has moved to shut down the Consumer Finance Protection Bureau (CFPB), an agency that undoubtedly was unpopular with certain financial services companies, whether or not it was helpful in protecting the interests of consumers.

As detailed in a February 13, 2025 New York Times article (here), the administration has also moved to cut staff at the Equal Employment Opportunity Commission, the National Labor Relations Board, and the Small Business Administration, in ways that arguably may hobble these agencies ongoing and future activities. Other agencies that the administration has already signaled it may target include the Department of Education and the National Oceanic and Atmospheric Administration. Agencies that may be targeted next include the National Science Foundation, the Corporation for Public Broadcasting, the National Endowment for the Humanities, the National Endowment for the Arts, and the Federal Emergency Management Administration.

The Wall Street Journal has also reported last week that the new administration is considering consolidating the FDIC within the Department of Treasury and combining some of its regulatory functions with the Office of the Comptroller of the Currency.

While at this point some agencies that have been or may be targeted can be separately identified, the likelihood is that many if not most agencies will feel the impact of workforce reductions and other activities pursued the administration’s new Department of Government Efficiency led by Elon Musk. Among the agencies already affected by these workforce reductions include the Energy Department, the Environmental Protection Agency, and the Agriculture Department.

All of these developments will not only significantly affect the functioning of the executive branch of the federal government, but it will also have a significant impact on everyone that interacts with the government, including businesses and their executives. Many companies have significant operations or other business dealings that involve or even depend on the federal government. The ongoing and likely future changes across the federal government could have a huge impact on many companies’ business, operations, and financial results. To be sure, for many companies, these changes will be positive, as the changes could  mean reduced regulatory oversight or diminished regulatory burdens – that is certainly one of the administration’s aims. But for now at least the extent and impact of the change is uncertain. In this case, present change may represent both opportunity and risk.

Discussion

By any measure, there is a lot going on here. About the only thing that is certain is that there is more to come.

For companies trying to make sense of all of this, as well as everything else that is going on, these circumstances can be challenging – although, to be sure, there are a number of things here for companies to like. For example, the likely withdrawal of the SEC’s climate change disclosure guidelines is likely to be popular in the C-suites of many companies (even if it turns out not to be a complete reprieve, owing to the applicability of other climate change disclosure requirements). The FCPA enforcement pause will also be likely be welcome, as the threat of FCPA enforcement has long been criticized among company-oriented commentators.

The problem for many companies is that the various changes discussed above are only part of what is going on and perhaps even the least important part of the many changes that companies are having to deal with. For example, rapidly changing tariff and trade policies are creating a great deal of uncertainty for many companies, particularly those with significant multinational operations.

As the Wall Street Journal put it in a February 10, 2025 article discussing the impact on companies of the Trump administration’s moves (here), while businesses were optimistic at the very beginning of the new administration, events since that time have “dented that optimism.”  As one commentator noted in the article, “there is just so much turmoil.” In particular, tariffs (or the threat of tariffs) make it more difficult for some companies to operate and may be discouraging companies from making longer term investments.

I recognize that efforts to roll back regulation and free up businesses could have a positive impact on business and on the economy. That is certainly the intent. Anticipated tax cuts, which are yet to be announced, could have a further positive effect. We are after all only four weeks into the new administration and the full story has yet to emerge, much less to be told.

But whatever else you want to say, there is, at least for now, a lot of uncertainty. And with uncertainty comes risk. More importantly for purposes of this blog post, the kinds of macroeconomic factors involved can not only affect company’s operations and financial performance, but they can also lead directly to corporate and securities litigation. We saw during and in the aftermath of the pandemic that factors such as supply chain and labor supply disruption, changing interest rates, and inflation led to securities lawsuits against a number of companies. Many of these same factors are or could be in play now.

The one thing that is sure is that for the immediately foreseeable future, things are going to continue to change, and to do so rapidly. For professionals whose job it is to keep a handle on the liability exposures of companies and their executives, that means that we are all going to have to be checking in regularly and assessing what has changed. Buckle up, it is going to be quite a ride.