SDNY Signals Increased Scrutiny of Private Market Valuations
In remarks delivered at the Bloomberg Global Credit Forum on June 3, 2026, Jay Clayton, the U.S. Attorney for the Southern District of New York (“SDNY”), signaled increased scrutiny of private-market valuations. While emphasizing the importance of private credit to the U.S. economy, Clayton identified inconsistent asset valuations as a key area of concern and called for greater transparency around firms’ valuation practices. He specifically noted that significant discrepancies in the valuation of the same assets may raise concerns, particularly where valuations affect fee generation.
Clayton further stated that he has directed SDNY prosecutors to examine valuation discrepancies and outlier marks when assessing cases. This focus may represent a shift from the private-credit cases currently pursued by SDNY, which have largely centered on borrower-side fraud, and suggests increased attention on the conduct of lenders, asset managers, and investors.
Our blog post examines what Clayton’s comments may signal about future enforcement priorities, the types of valuation-related conduct likely to draw scrutiny, and practical steps firms can take to strengthen their valuation frameworks.
CFTC Division of Enforcement Issues New Cooperation Policy
The CFTC’s Division of Enforcement has issued a significant new policy on cooperation that reshapes how self-reporting, cooperation, and remediation will affect enforcement outcomes. The May 19, 2026 Staff Advisory replaces prior guidance and, for the first time, creates a defined framework for when the Division may decline to recommend an enforcement action altogether.
The policy establishes detailed criteria for declinations, including prompt voluntary self-reporting, full cooperation, timely remediation, and restitution or disgorgement, while also introducing structured penalty reduction tiers of up to 75% for parties that cooperate even if they do not qualify for a declination. At the same time, the guidance raises the stakes on timing, requiring parties to report misconduct “at the earliest possible opportunity.”
The new internal guidance provides important insight into how the Division intends to exercise prosecutorial discretion and will have significant implications for firms evaluating potential misconduct, internal investigations, and disclosure decisions. Read the full Sidley post for a detailed analysis of the policy’s requirements, cooperation credit framework, and practical considerations for market participants. The CFTC press release can be found here.
English Privilege Ruling Carries Important Lessons for Internal Investigations
A recent English High Court decision could significantly affect how companies structure internal investigations and legal communications under English law. In Aabar Holdings v. Glencore, the court held that certain internal corporate communications created for the purpose of obtaining legal advice may be protected by legal advice privilege even where no lawyer is directly involved in the communication. The decision provides important clarification on the scope of English legal privilege, particularly for multinational companies navigating cross-border investigations and compliance reviews, while also underscoring the continued importance of carefully defining the corporate “client group” when seeking legal advice.
U.S. DOJ Issues Guidance on “Unlawful Discrimination” Related to DEI Programs for Recipients of Federal Funding
On July 30, 2025, the U.S. Department of Justice (DOJ) issued guidance on “unlawful discrimination” for recipients of federal funding and other entities subject to federal antidiscrimination laws, further underscoring Trump administration officials’ commitment to pursuing investigations and enforcement activity in this area.
U.S. DOJ Launches Initiative Leveraging False Claims Act to Target Diversity, Equity, and Inclusion Programs
In a May 19, 2025 memorandum, U.S. Department of Justice (DOJ) Deputy Attorney General Todd Blanche announced the Civil Rights Fraud Initiative, which aims to use the False Claims Act (FCA) to investigate and “pursue claims against any recipient of federal funds that knowingly violates federal civil rights laws” via “racist preferences, mandates, … and activities” — including diversity, equity, and inclusion (DEI) programs. (more…)
