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Key wealth management legal cases to watch in 2025

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2 years ago

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This year may not bring as many consequential Supreme Court decisions as the last one for financial advisors, but there are several pending lawsuits with big potential industry implications.

Ongoing uncertainty around the reporting of “beneficial ownership information” under the Corporate Transparency Act, a Supreme Court case testing the power of the IRS to collect pre-bankruptcy tax payments and possible new challenges to the agency’s rules after the demise last year of the so-called Chevron doctrine could each affect advisors and their clients, according to Leila Carney, a member in the Tax Disputes & Tax Litigation Group at the Washington, D.C., office of Caplin & Drysdale. In addition, the Securities and Exchange Commission and FINRA are facing their own legal confrontations over enforcement capabilities.

“What we’ve seen is, 2024 cases have chipped away at agency power, lending momentum to private litigants,” Carney said in an interview last month shortly after the high court heard arguments in the case involving creditors’ ability to claw back tax payments prior to bankruptcy, U.S. v. Miller. “This case will, I think, be a weather balloon to see whether we can expect continued weakening of agencies.”

READ MORE: What the Supreme Court’s eventful term means for financial advisors

In the wake of one of the Supreme Court rulings last year that gave every SEC defendant the right to a jury trial rather than an administrative law judge, the agency is contending with cases scrutinizing its authority to attach “follow-on” industry bans and FINRA’s process for expelling brokerages from its membership. 

The victories by President-elect Donald Trump and his Republican allies in Congress also likely delivered the knockout blow to the Labor Department’s new retirement advice rule that was already in a stay blocking its implementation during an industry lawsuit. The Trump administration could drop Labor’s appeal of the stay or simply abide by any possible court decisions vacating the new rule.

The path ahead for another new law requiring companies to disclose their ownership to the Treasury Department’s Financial Crimes Enforcement Network looks much more murky. Federal judges have halted the Corporate Transparency Act under multiple lawsuits criticizing the law as overly broad under the Constitution, but the Justice Department has asked the Supreme Court to lift the injunction. For the moment, the law has yet to go into effect.

“The Corporate Transparency Act (CTA) plays a vital role in protecting the U.S. and international financial systems, as well as people across the country, from illicit finance threats like terrorist financing, drug trafficking and money laundering. The CTA levels the playing field for tens of millions of law-abiding small businesses across the United States and makes it harder for bad actors to exploit loopholes in order to gain an unfair advantage,” according to a website maintained by the agency with the latest updates on the status of the law. 

“The government continues to believe — consistent with the orders issued by the U.S. District Courts for the District of Oregon and the Eastern District of Virginia — that the CTA is constitutional and will continue defending the law as necessary,” the agency said.

But the constitutional questions about whether the law extends beyond the federal government’s legally mandated oversight of interstate commerce could one day reach the high court, according to Carney.

“Most Americans are hesitant to share information that they would otherwise expect to keep private, just as a matter of good security practices,” she said. “The constitutional argument is that, because it’s requiring a report of entity formation, it’s not within the scope of regulating business because an entity may be formed and may not be doing any business.”

READ MORE: Lawsuit contests SEC’s ability to slap advisors with industry bans

Another unit of the Treasury, the IRS, is fighting a legal case filed by 3M disputing an agency rule about companies’ allocations of corporate income. The U.S. Court of Appeals for the Eighth Circuit heard arguments in the case this past fall. 

It and another case before the Tax Court filed by Abbott Laboratories represent the next struggles over a substitute framework for the Chevron deference taken away from agency rulemaking as part of last year’s decision in the Loper Bright Enterprises v. Raimondo case, tax lawyers Lauren Ann Ross and Adam Spiegel of Covington & Burling wrote in Bloomberg Law. Each of the cases are seeking to overturn earlier decisions that revolved around the Chevron deference.

“Two lines of inquiry are likely to emerge: First, does the regulation embody a policy choice or factual determination? If so, courts also are likely to defer to the agency’s regulation as long as it reflects reasoned decision-making,” Ross and Spiegel wrote. “Otherwise, if the regulation is interpreting the statute, courts may move to a second question: Does the Treasury have discretionary authority to interpret the statute through regulations? If so, the agency’s interpretation may still be entitled to deference. If not, the court would interpret the statute without deference to the regulation and could hold the regulation invalid.”

In light of Chevron’s demise, Congress could “easily fill the gap with legislation” that addresses the possible level of deference for agency rulemaking, Carney said. The incoming Trump administration may single out certain rules for non-enforcement as well, by “targeting regulations that are likely to be challenged” after the Loper Bright case, she said.

READ MORE: FINRA dealt blow by court in its power to expel brokerages

Trump’s administration and its allies in Congress are likely to pull back IRS enforcement funding that had previously ramped up the agency’s scrutiny of what it described as tax-dodging efforts by the wealthy. However, another area of enforcement called the “economic substance doctrine” that restricts tax benefits for transactions that do not present any legitimate business or economic purpose bears close watching by advisors and tax professionals too, according to Carney. A district court’s decision siding with the IRS in a case brought by a company called Liberty Global put tax attorneys on alert about the impact to basic strategies deployed by clients for savings. The case is currently awaiting a ruling in the 10th Circuit Court of Appeals.

“The IRS has been making it a priority to enforce the economic substance doctrine recently,” she said. “The litigation climate may make that harder.”

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Accounting

SEC’s Semiannual Reporting Proposal Faces Investor Pushback: What CFOs Need to Know

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1 day ago

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August 25, 2026

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U.S. Securities and Exchange Commission (SEC)

A proposal from the U.S. Securities and Exchange Commission to potentially shift some public companies away from quarterly financial reporting toward a semiannual model is drawing significant pushback from investors, even as it continues moving through the regulatory process. The debate has direct implications for corporate finance teams, auditors, and the broader transparency of U.S. capital markets.

What the SEC Proposed

According to a summary published by accounting advisory firm Cohen & Co., the SEC issued a proposed rule on May 19, 2026, aimed at simplifying financial reporting requirements for many U.S. public companies. The proposal would potentially reduce the frequency of certain mandatory disclosures from quarterly to semiannual, a structural change that has not been made to core U.S. reporting requirements in decades.

The proposal follows an extended debate within U.S. policy circles, with proponents arguing that reduced reporting frequency could lower compliance costs and free up management time for longer-term strategic planning rather than quarter-to-quarter results management.

Why Investors Are Pushing Back

Comment letters submitted in response to the proposal have been extensive, and according to Cohen & Co.’s review of the public record, investors “appear to be largely opposed” to the shift, viewing frequent interim reporting as a core benefit of U.S. capital markets relative to other jurisdictions.

Accounting and law firms have taken a more measured position, generally urging any changes to remain aligned with the Financial Accounting Standards Board (FASB), whose existing disclosure requirements and guidance are built around a quarterly reporting cadence. A shift to semiannual reporting without corresponding changes to FASB guidance could create friction between SEC filing requirements and GAAP-based disclosure expectations.

Lessons From the U.K. Experience

The debate is not without precedent. The United Kingdom moved away from mandatory quarterly reporting for listed companies in 2014, returning to a semiannual disclosure requirement. According to Cohen & Co.’s analysis, that experience offers a cautionary data point: there was no measurable increase in capital expenditure or R&D investment following the change, while analyst coverage of affected companies declined as reliable interim information became less available — a particular risk for smaller and newly public companies that rely on analyst coverage to maintain investor visibility.

Practical Implications for Finance Teams

Beyond the debate over disclosure philosophy, the proposal carries practical complications. Many companies have debt covenants and credit agreements structured around quarterly financial delivery; a shift to semiannual reporting could require renegotiating those terms. Reduced reporting frequency would also extend the “window of market silence” between disclosures, a factor that governance and investor-relations teams would need to manage carefully to avoid information asymmetry.

Separately, and unrelated to the reporting-frequency debate, the SEC and FASB have continued finalizing more routine updates this year. New Accounting Standards Updates are taking effect for December 31, 2026, fiscal year-ends covering income tax disclosures, credit loss measurement, induced debt conversions, and stock compensation, according to Eide Bailly’s review of 2026 ASU activity. Additional guidance on paid-in-kind dividends and environmental credits is also on the near-term horizon.

What to Watch Next

The semiannual reporting proposal remains in the comment and review phase, and no final rule has been adopted as of this writing. Finance leaders should monitor the SEC’s regulatory agenda for further movement, while treating the current quarterly reporting requirement as the operative standard until any final rule is issued and an effective date is set.

Given the extent of investor opposition documented in the comment file, a full shift to mandatory semiannual reporting appears more likely to result in either a scaled-back compromise or continued study rather than swift adoption — though the SEC’s ultimate direction remains uncertain.

 

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AI-Driven Automation and Continuous Accounting Frameworks

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2 weeks ago

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August 15, 2026

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The accounting profession is undergoing a fundamental structural transition as enterprise finance departments shift from periodic month-end closes toward automated continuous accounting models. By integrating specialized machine learning algorithms directly into enterprise resource planning (ERP) platforms, chief accounting officers are transforming financial reporting from a retrospective exercise into a real-time operational asset.

The Shift from Periodic Close to Continuous Financial Reporting
Traditional accounting workflows heavily relied on manual data reconciliation, spreadsheet calculations, and multi-week closing cycles at the end of each fiscal period. In contrast, continuous accounting frameworks utilize automated software agents to process, validate, and post transactional data in real time as business activities occur.

Automated bank reconciliation tools cross-reference incoming bank feeds, invoice records, and purchase orders automatically. By resolving transactional variances instantly throughout the month, corporate accounting teams eliminate the traditional workload spikes associated with quarterly and annual closes.

Machine Learning in Audit Trails and Anomaly Detection
Advanced natural language processing (NLP) and machine learning tools are redefining internal audit and financial control environments. Automated systems analyze 100% of general ledger entries, identifying anomalous transactions, duplicate payments, and unauthorized journal entries in real time.

Rather than relying on random statistical sampling, corporate internal auditors can focus their attention on high-risk flags automatically surfaced by algorithmic monitoring platforms. This continuous risk assessment strengthens internal controls over financial reporting (ICFR) and significantly reduces fraud risk.

Evolving Roles for Accounting Professionals
As routine data entry and manual reconciliation tasks become fully automated, the skill set required for accounting professionals is shifting toward data analysis, system design, and strategic business advisory.
– Systems Governance: Accountants are increasingly responsible for monitoring algorithmic accuracy and managing data integration pipelines.
– Business Partnership: Finance professionals leverage real-time financial dashboards to advise operational leaders on margin management and working capital allocation.
– Regulatory Compliance Management: Accounting teams utilize automated platforms to ensure compliance with dynamic tax codes and international accounting standards.

Core Implementation Recommendations
1. Deploy Automated Reconciliation Tools: Integrate continuous transaction processing modules into existing enterprise ERP architectures.
2. Establish Algorithmic Governance Controls: Implement strict internal testing protocols to ensure automated accounting rules comply with GAAP/IFRS standards.
3. Reskill Accounting Teams: Invest in training finance staff on data analytics, workflow automation, and predictive financial modeling.

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Accounting

Global ESG Reporting Standards and Double Materiality Compliance

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2 weeks ago

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August 9, 2026

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Corporate accounting departments face expanding reporting expectations as international sustainability disclosure standards achieve regulatory enforcement across major global jurisdictions. Chief Accounting Officers (CAOs) and corporate controllers are establishing rigorous internal accounting controls to treat Environmental, Social, and Governance (ESG) metrics with the same data precision, auditability, and governance as traditional financial statements.

Regulatory Harmonization Under Global Sustainability Frameworks
The implementation of standardized sustainability reporting frameworks—notably rules established by international sustainability accounting boards—has created unified expectations for public and large private enterprises. Corporations must report standardized metrics covering greenhouse gas emissions (Scope 1, 2, and material Scope 3), energy utilization, workforce demographics, and supply chain governance.

In Europe and other participating international jurisdictions, double materiality principles are mandatory. Under double materiality, organizations must report both how external sustainability risks impact corporate financial performance, and how internal corporate operations affect surrounding environmental and social structures.

Integrating Sustainability Metrics into Core ERP Systems
To provide auditable non-financial data, enterprise organizations are integrating specialized carbon accounting and ESG management platforms directly into core ERP systems. Automated data collectors capture energy utility invoices, logistics fuel consumption metrics, and vendor compliance records in real time.

Establishing automated, traceable data pipelines ensures that non-financial reporting is supported by clear audit trails. This structured approach allows external financial auditors to provide reasonable assurance on sustainability disclosures during annual corporate reporting cycles.

Financial Impacts and Capital Market Disclosure
Accurate ESG reporting directly influences corporate cost of capital and institutional credit ratings. Commercial lenders and institutional asset managers systematically incorporate sustainability metrics into risk pricing models. Companies that demonstrate transparent, verifiable progress in operational energy efficiency and climate risk mitigation benefit from expanded access to green bond markets and lower debt pricing.

Action Steps for Accounting Leadership
1. Implement Double Materiality Frameworks: Conduct comprehensive assessments to identify material financial and operational sustainability metrics.
2. Build Auditable Non-Financial Data Pipelines: Automate ESG data collection within core accounting software to ensure data integrity.
3. Align Sustainability with Annual Financial Filings: Prepare non-financial disclosures concurrently with financial statements to satisfy regulatory audit expectations.

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