As the D&O Diary reported earlier this year, the Trump Administration has increasingly turned to the False Claims Act to support policy priorities, including anti-DEI and tariff-related initiatives. The President’s March 16, 2026, Executive Order (EO) may signal that FCA enforcement activity will only continue to accelerate. In particular, the President’s EO establishes a multi-agency “Task Force to Eliminate Fraud,” directing the federal government to “use all available resources” to combat fraud, enhance coordination, and strengthen enforcement across federally funded programs.  

White collar defense lawyers cited in a March 24, 2026, Law360 article indicated that the initiative will drive “an appreciable uptick in all kinds of investigations across the country,” particularly in FCA matters.  While the EO does not expand the substantive scope of the FCA, it underscores an intent to intensify coordination, prioritization, and resource allocation across agencies, factors that may correlate with increased investigative activity.

The following will discuss how the anticipated deployment of a fraud task force may have direct implications for corporate governance and D&O exposure.

EO Directives

By way of brief summary, the EO states that the newly established task force is meant to establish a coordinated federal strategy to address what policymakers view as systemic fraud across programs ranging from healthcare to housing and education. According to the EO, the federal government estimates annual fraud losses between $233 billion and $521 billion.  As a result, the EO specifically emphasizes that inter-agency coordination, data sharing, and the development of uniform anti-fraud standards will help identify patterns of fraud and pursue enforcement more efficiently across jurisdictions. 

In addition, the EO states that it will promote whistleblower activity by, in part, mandating the DOJ promote meritorious pursuit of FCA qui tam actions and require Attorney General to ensure prompt review of whistleblower actions. As noted in the March 24 Law360 article, this emphasis could lead to a “marked increase” in FCA filings, including cases involving smaller damages that might previously have been overlooked.   

Discussion

By setting clear priorities for the fraud task force and concentrating enforcement efforts, the EO may contribute to an increase in both the frequency and diversity of FCA claims, which may, in turn, impact corporate governance and D&O policies providing investigation coverage.

First, as I have previously noted, the expansion of FCA enforcement into areas such as tariff compliance underscores how operational and regulatory risks can quickly escalate into enterprise-level liability events. Tariff-related FCA cases may demonstrate how a company’s alleged inaccuracies in import classifications or country-of-origin disclosures can be reframed as fraud against the government.  With the EO’s new federal coordination and strategy, what might once have been treated as a customs issue could quickly escalate into a federal investigation and enforcement, resulting in D&O investigation coverage exposure.

In addition, the EO’s emphasis on aggressive enforcement and whistleblower engagement could increase the likelihood that companies will face investigations not only for clear instances of misconduct but also for more ambiguous or technical compliance issues. This raises the risk of what Law360 describes as potentially “overzealous” enforcement prosecutions. Even where allegations ultimately prove unfounded, defense costs associated with responding to subpoenas, investigations, and defending parallel proceedings may be significant.

From a governance perspective, the EO directives may highlight the importance of board-level oversight. At this point in time, FCA exposure is no longer niche and may become a core enterprise risk stemming from failing to monitor the current Administration’s policies, which include anti-DEI and tariff-related directives. Directors’ fiduciary duties, particularly oversight obligations, generally require that boards implement and monitor systems reasonably designed to identify and address material compliance risks. A fraud task force investigation may not only result in regulatory exposure but potential shareholder scrutiny and derivative litigation alleging breaches of fiduciary duty.

And, because FCA investigations can serve as the catalyst for follow-on litigation, including securities class actions and derivative suits, investigations by the newly established task may have an immediate impact on D&O carriers. For example, a company facing an FCA investigation related to tariff practices may subsequently be accused of failing to disclose material compliance risks or misrepresenting its regulatory posture to investors. These follow-on claims fall squarely within the traditional scope of D&O exposure.

Finally, the task force’s coordinated approach, combined with the expansion of FCA theories into new areas, suggests that companies may face more complex, multi-front enforcement scenarios. A single underlying issue, such as alleged tariff misclassification, could trigger parallel FCA claims, regulatory investigations, and shareholder litigation, all of which place significant demands on corporate leadership and risk management frameworks.

If FCA activity increases because of the task force’s initiatives, near‑term D&O exposure may increase as well. Thus, D&O underwriters may want to consider whether certain risks have strong governance controls and are tracking Administration priorities.