Entries by Holly J. Gregory

When the Meeting Minutes and the AI Transcript Don’t Match: Litigation Insights From Delaware Chancery

AI-generated meeting transcripts are creating a new category of evidence for litigators and enforcement authorities. A recent Delaware Court of Chancery decision illustrates the risk: the court had both official board minutes and AI-generated transcripts of the same meetings, and cited the transcripts when assessing the board’s motivations. Although the transcripts did not decide the case, they provided an alternate—and potentially more revealing—record of what occurred in the boardroom.

The implications extend well beyond board litigation. AI transcripts from management calls, internal investigations, privileged discussions, and other sensitive meetings may be discoverable in civil litigation or regulatory and criminal investigations—and may preserve informal comments, hypotheticals, or shorthand that look very different when read later by a regulator, prosecutor, judge, or jury. Organizations also face questions about privilege, preservation obligations, recording-consent laws, vendor access, and the reliability of AI-generated transcripts and translations.

In this post, our colleagues examine the Delaware decision and practical steps organizations can take to manage these risks, including adopting risk-based policies governing when AI transcription is permitted, establishing retention and review protocols, training directors and employees, and extending AI governance to vendors and cross-border use. As AI notetakers become increasingly commonplace, organizations should consider these issues before an AI-generated transcript becomes evidence in the next dispute or investigation.

Click here to read more.

Board Investigations of Potential Misconduct

When allegations of corporate misconduct surface, one of the first questions companies may face is who should oversee the response. In some circumstances, an investigation led by management or in-house counsel may be appropriate. But allegations involving senior executives or directors, mission-critical compliance risks, or questions about management’s independence may require the board — often through an independent committee — to take a more active role.

In a new article for Reuters Practical Law, Sidley partner Holly J. Gregory examines when a board-driven investigation may be warranted and how boards can structure those investigations to withstand scrutiny from regulators, prosecutors, shareholders, and courts. Click here to read the full post.

Prediction Markets and Insider Trading: Why Organizations Should Update Compliance Policies Now

As prediction markets expand to cover corporate, regulatory, and geopolitical events, organizations face new compliance risks when employees, directors, or other insiders possess nonpublic information that could affect the value of event contracts.

In this post, we examine the first insider trading case involving prediction markets, discuss the government’s position that existing insider trading and antifraud principles apply to these markets, and outline practical steps organizations can take to strengthen their governance frameworks. We also explore why existing insider trading, confidentiality, and code of conduct policies may be insufficient and provide recommendations for updating policies, training, and compliance controls to address this emerging risk area.

Read our analysis of the evolving regulatory landscape and the measures organizations should consider to mitigate legal, reputational, and compliance risks associated with prediction market activity.