As general interest and investment in AI has accelerated since the initial public launch of ChatGPT, so too has the U.S. federal government both increased its spending in the area[i] and the speed with which it adopted guidelines on the utilization of AI more generally.[ii] This tracks other actions outside the U.S.,[iii] and anticipates corresponding initiatives at the state and municipal levels.[iv]Continue Reading AI Considerations in Government Contract-Related M&A Transactions
Mergers and acquisitions activity is significantly influenced by economic conditions. Factors such as gross domestic product growth, interest rates and market volatility create an undeniable influence on deal volume. When economic circumstances are favorable, it can seem easy to close transactions. Conversely, when the economy faces headwinds, buyers are more cautious and often kick more tires before initiating closing wires.Continue Reading Pillars of Due Diligence
A recent enforcement action offers a glimpse of the Financial Industry Regulatory Authority’s (“FINRA”) expectations for firms conducting anti-money laundering (“AML”) due diligence and transaction monitoring. On July 27, 2020, FINRA settled with broker-dealer JKR & Company (“JKR”) over allegations that the firm failed to detect, investigate, and report suspicious activity in four customer accounts in violation of FINRA Rules 3310(a) and 2010. JKR agreed to a $50,000 fine and a censure to resolve the matter. The settlement is notable in that FINRA applied transaction monitoring and due diligence expectations common in the banking industry to a broker-dealer. It also serves as a reminder that FINRA expects member firms to not only establish written AML policies and procedures, but also to put their AML programs into practice in order to meet their regulatory obligations.
Continue Reading FINRA Settlement Highlights Importance of Anti-Money Laundering Due Diligence and Monitoring
The COVID-19 pandemic has caused severe disruption, distress and uncertainty for companies across almost every industry. While this initially resulted in a substantial slow-down in the M&A market, transactional activity is expected to accelerate in certain areas as the economy begins to recover; for example, we expect to see more carveouts by companies that seek to divest non-core assets, acquisitions of distressed companies, financings of independent companies that may have liquidity issues, and divestitures or joint ventures by private equity funds that seek to exit investments or bring in new partners. Prospective sellers and buyers alike should have an increased focus on specific considerations as they evaluate new opportunities during and post-COVID-19.
Continue Reading The Impact of COVID-19 on M&A Transactions — Part I: Due Diligence and Operational Issues