China’s New Supply Chain Security Regulations: Key Takeaways for Companies With China Operations or China-Linked Supply Chains

China’s new Regulations on Industrial and Supply Chain Security, which took effect on April 7, 2026, add another significant layer to the country’s expanding countermeasures framework. The regulations give Chinese authorities broad powers to monitor activities that could be viewed as threatening China’s industrial or supply chain security, creating new compliance challenges for companies with China operations or China-linked supply chains.

From increased scrutiny of key sectors and supply chain due diligence to heightened risks around supplier transitions, customer terminations, and sanctions-driven business decisions, the regulations underscore a growing reality: actions taken to comply with foreign trade restrictions may carry legal consequences in China.

In this blog post, we examine the regulations’ key provisions, identify four principal risk areas for multinational companies, and discuss practical steps companies should consider as conflict-of-laws risks become increasingly difficult to avoid.

Challenging Executive Order on DEI, States Say It Gets FCA Materiality Wrong

On June 10, 2026, nineteen states and the District of Columbia filed suit challenging President Trump’s Executive Order No. 14398, which seeks to eliminate diversity, equity, and inclusion (DEI) initiatives among federal contractors and expressly links DEI-related conduct to potential False Claims Act (FCA) liability. The lawsuit, brought under the Administrative Procedure Act, targets the Order’s anti-DEI contracting provisions and the federal government’s efforts to implement them.

The states argue that the Executive Order’s attempt to designate compliance with its anti-DEI requirements as “material” to government payment decisions conflicts with the Supreme Court’s FCA materiality standard articulated in Universal Health Services v. Escobar. The complaint also challenges the Order on broader administrative law grounds, arguing that key terms are impermissibly vague and that agencies have failed to justify the Order’s underlying policy assumptions.

Read the full post for a closer look at the states’ materiality arguments and the potential implications for federal contractors facing increased FCA scrutiny of DEI-related practices.

Cracking Open the Grand Jury Black Box: Recent Cases Show Prosecutorial Misconduct Can Lead to Dismissal of Charges

Recent federal cases in Wyoming and Illinois involving judicial findings of prosecutorial misconduct before the grand jury have resulted in dismissed indictments. In Wyoming, three federal judges dismissed nine felony indictments after concluding that the interim U.S. Attorney made inflammatory and prejudicial remarks to grand jurors that compromised the integrity of the proceedings. In Illinois, the prosecution of the so-called “Broadview Six” collapsed after a federal judge authorized disclosure and review of grand jury materials amid allegations of serious misconduct during the charging process, leading the government to dismiss the remaining charges with prejudice.

These outcomes are remarkable because courts rarely agree to scrutinize what occurs before the grand jury. Grand jury proceedings are cloaked in secrecy, and courts generally presume that prosecutors properly present evidence and accurately instruct grand jurors on the law. As a result, efforts to challenge indictments based on misconduct in the charging process face a steep uphill battle. The Wyoming and Illinois cases nevertheless demonstrate that, where defense counsel can identify objective facts raising legitimate concerns about the integrity of the grand jury process, courts may be willing to look behind the curtain, authorize disclosure or review of grand jury materials, and, in extraordinary circumstances, dismiss indictments altogether. This blog post examines those cases, the legal framework governing grand jury secrecy, and the practical lessons they offer for defense counsel seeking to investigate and litigate potential grand jury misconduct.

Sidley Secures Unanimous Supreme Court Victory Reinforcing Constitutional Venue Protections

Sidley secured a significant victory in the U.S. Supreme Court for Ahmad Abouammo in a case addressing the constitutional limits on where federal criminal prosecutions may be brought. In a unanimous opinion, the Supreme Court held that Mr. Abouammo should not have been charged and tried in the Northern District of California for crimes which occurred elsewhere. The case is one of the most important recent decisions regarding venue: the Court’s ruling reinforces the Constitution’s venue protections and limits the government’s ability to prosecute defendants in forums disconnected from their alleged conduct.

Prediction Market “Insider Trading” Revisited: Technology Employee Charged With Using Confidential Corporate Information to Profit from Event Contracts

On May 27, 2026, the U.S. Attorney’s Office for the Southern District of New York (“SDNY”) and the Commodity Futures Trading Commission(“CFTC”) charged a Google software engineer with allegedly using confidential internal search data to profit from prediction market contracts on Polymarket. The case is the latest example of regulators applying insider trading-style theories outside traditional securities markets and raises important questions regarding confidential business information, prediction markets, and the scope of the CFTC’s enforcement authority.

For companies, the matter underscores increasing scrutiny of trading activity involving confidential corporate information and the need to assess whether existing insider trading and confidentiality policies adequately address emerging trading platforms.

Read the full blog post for an analysis of the allegations, the implications of United States v. Chastain, and key compliance considerations for companies navigating the rapidly evolving prediction market landscape.

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.

DOJ’s Civil Rights Fraud Initiative Raises False Claims Act Risks for Healthcare and Life Sciences Companies

In a Reuters article, Sidley partners Jaime Jones, Kristin Graham Koehler and Boyd Greene examine how the U.S. Department of Justice’s Civil Rights Fraud Initiative could create new False Claims Act (FCA) exposure for healthcare and life sciences companies that receive federal funding or contract with the federal government. The initiative seeks to use the FCA to pursue organizations that allegedly violate federal civil rights laws while certifying compliance with contractual, grant or funding requirements.

President Trump Issues Executive Order to Enhance Customs Enforcement

President Trump’s June 3, 2026 Executive Order on customs enforcement signals a significant expansion of the Administration’s America First Trade Policy beyond tariffs and trade remedies. The order directs the Department of Homeland Security and U.S. Customs and Border Protection (CBP) to undertake a broad range of reforms aimed at strengthening customs enforcement, including heightened importer vetting, increased bond requirements, expanded supply-chain disclosure obligations, and stricter penalties for noncompliance. The order also focuses on nonresident importers of record, imposing new restrictions that could affect foreign companies that have long relied on established import structures and procedures to access the U.S. market. Because many of the contemplated changes can be implemented through CBP rulemaking and guidance rather than legislation, importers should expect significant regulatory developments over the coming months. Companies that import goods into the United States should begin assessing the potential impact on their customs compliance programs, supply chains, and import operations.

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<a target=‘_blank’ href="https://www.sidley.com/en/people/a/axel-douglas-a">Douglas A. Axel</a>

Douglas A. Axel

Los Angeles
<a target=‘_blank’ href="https://www.sidley.com/en/people/l/loughnane-joan-m">Joan M. Loughnane</a>

Joan M. Loughnane

New York
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Kenneth A. Polite Jr.

Washington, D.C., New York
<a target=‘_blank’ href="https://www.sidley.com/en/people/t/tham-yuet-ming">Yuet Ming Tham</a>

Yuet Ming Tham

Singapore, Hong Kong
<a target=‘_blank’ href="https://www.sidley.com/en/people/a/anderson-dave">Dave Anderson</a>

Dave Anderson

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Sheila A.G. Armbrust

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<a target=‘_blank’ href="https://www.sidley.com/en/people/c/cooper-ellyce-r">Ellyce R. Cooper</a>

Ellyce R. Cooper

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<a target=‘_blank’ href="https://www.sidley.com/en/people/c/craig-daniel-c">Daniel C. Craig</a>

Daniel C. Craig

Chicago
<a target=‘_blank’ href="https://www.sidley.com/en/people/d/daugherty-alexandria">Alexandria Daugherty</a>

Alexandria Daugherty

Los Angeles
<a target=‘_blank’ href="https://www.sidley.com/en/people/d/dukin-craig-francis">Craig Francis Dukin</a>

Craig Francis Dukin

Washington, D.C.

<a target=‘_blank’ href="https://www.sidley.com/en/people/g/george-sara">Sara George</a>

Sara George

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<a target=‘_blank’ href="https://www.sidley.com/en/people/h/ho-shu-min">Shu Min Ho</a>

Shu Min Ho

Singapore
<a target=‘_blank’ href="https://www.sidley.com/en/people/i/igra-naomi-a">Naomi A. Igra</a>

Naomi A. Igra

San Francisco
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Kristin Graham Koehler

Washington, D.C.
<a target=‘_blank’ href="https://www.sidley.com/en/people/l/lassar-scott-r">Scott R. Lassar</a>

Scott R. Lassar

Chicago
<a target=‘_blank’ href="https://www.sidley.com/en/people/l/levy-michael-a">Michael A. Levy</a>

Michael A. Levy

New York
<a target=‘_blank’ href="https://www.sidley.com/en/people/m/malhotra-geeta">Geeta Malhotra</a>

Geeta Malhotra

Chicago
<a target=‘_blank’ href="https://www.sidley.com/en/people/m/mann-michael-d">Michael D. Mann</a>

Michael D. Mann

New York
<a target=‘_blank’ href="https://www.sidley.com/en/people/m/mcginley-ian">Ian McGinley</a>

Ian McGinley

New York
<a target=‘_blank’ href="https://www.sidley.com/en/people/m/miller-lisa-h">Lisa H. Miller</a>

Lisa H. Miller

Washington, D.C.
<a target=‘_blank’ href="https://www.sidley.com/en/people/m/mirabella-julia-g">Julia G. Mirabella</a>

Julia G. Mirabella

Washington, D.C.
<a target=‘_blank’ href="https://www.sidley.com/en/people/o/ono-takayuki">Takayuki Ono</a>

Takayuki Ono

Chicago, Tokyo
<a target=‘_blank’ href="https://www.sidley.com/en/people/p/poletto-alexa">Alexa Poletto</a>

Alexa Poletto

New York
<a target=‘_blank’ href="https://www.sidley.com/en/people/p/popp-karen-a">Karen A. Popp</a>

Karen A. Popp

Washington, D.C.
<a target=‘_blank’ href="https://www.sidley.com/en/people/p/pruitt-jacqueline">Jacqueline Pruitt</a>

Jacqueline Pruitt

Chicago
<a target=‘_blank’ href="https://www.sidley.com/en/people/r/rachal-doreen-m">Doreen M. Rachal</a>

Doreen M. Rachal

New York, Boston
<a target=‘_blank’ href="https://www.sidley.com/en/people/r/rubino-kevin-r">Kevin Rubino</a>

Kevin Rubino

San Francisco
<a target=‘_blank’ href="https://www.sidley.com/en/people/s/shubert-leslie-a">Leslie A. Shubert</a>

Leslie A. Shubert

Washington, D.C.
<a target=‘_blank’ href="https://www.sidley.com/en/people/s/silva-david-a">David A. Silva</a>

David A. Silva

Singapore
<a target=‘_blank’ href="https://www.sidley.com/en/people/t/tagliaferri-michele">Michele Tagliaferri</a>

Michele Tagliaferri

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<a target=‘_blank’ href="https://www.sidley.com/en/people/v/volpe-frank-r">Frank R. Volpe</a>

Frank R. Volpe

Washington, D.C.
<a target=‘_blank’ href="https://www.sidley.com/en/people/w/west-marisa-s">Marisa S. West</a>

Marisa S. West

Washington, D.C.
<a target=‘_blank’ href="https://www.sidley.com/en/people/x/xenakis-angela-m">Angela M. Xenakis</a>

Angela M. Xenakis

Washington, D.C.

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