News

21 Oct, 2026

ICE Warrantless Arrests Challenged in Federal Appeals Court

California, the District of Columbia and Colorado led twenty-one states in an amicus brief filed October 19, 2026 in the D.C. Circuit, supporting the challenge in Escobar-Molina v. DHS to warrantless civil immigration arrests. The district court granted a preliminary injunction in part on December 2, 2025. The provision at issue is 8 U.S.C. § 1357(a)(2), which permits a warrantless arrest only where the officer has reason to believe the person is in the United States unlawfully and is likely to escape before a warrant can be obtained. The states argue that the second condition has not been applied as a separate determination, so the arrest proceeds on the first alone. Why States Are Challenging ICE's Warrantless Arrest Practices California joined a multistate coalition in filing an amicus brief with the U.S. Court of Appeals for the D.C. Circuit. The coalition supports a legal challenge to DHS practices involving civil immigration arrests without warrants. The states argue that federal officers have conducted arrests without making the individualized determinations required under immigration law. When Can ICE Make an Arrest Without a Warrant? Under 8 U.S.C. § 1357(a)(2), federal immigration officers may make certain warrantless civil arrests when they have reason to believe an individual is in the United States in violation of immigration law and is likely to escape before a warrant can be obtained. Courts have interpreted the reason-to-believe requirement as a probable cause standard. The litigation concerns whether DHS's arrest practices satisfy these statutory conditions. Why the Likelihood of Escape Matters The statutory requirement concerning the likelihood of escape is separate from the determination regarding immigration status. The plaintiffs and supporting states argue that officers must evaluate both conditions before conducting a warrantless civil immigration arrest. What Happened in Escobar-Molina v. DHS? The case challenges warrantless civil immigration arrest practices in the District of Columbia. On December 2, 2025, the U.S. District Court for the District of Columbia granted part of a motion for a preliminary injunction. The case subsequently proceeded to the D.C. Circuit, where the multistate coalition submitted its October 2026 amicus brief. A preliminary injunction is not a final determination of every issue in the litigation. What the Appeal Could Mean for Immigration Enforcement The appeal concerns how statutory requirements apply to warrantless civil immigration arrests and the extent to which officers must establish an individualized likelihood of escape. The states also describe effects on schools, workplaces, healthcare access, and local communities. The appellate court's decision will determine the issues before it, and any broader implications will depend on the scope of its ruling. How SJKP Can Help SJKP can assist individuals and businesses with immigration-related legal matters, administrative proceedings, and federal litigation. Individuals facing immigration enforcement actions can consult qualified counsel to understand their rights, available legal remedies, and the procedures applicable to their circumstances.

21 Oct, 2026

SEC and French AMF Agreement Resumes U.S. Investment Adviser Registration Processing

The SEC and France’s Autorité des Marchés Financiers announced a supervisory memorandum of understanding on October 20, 2026 (Press Release 2026-108), providing for consultation and the exchange of supervisory information on advisers and funds operating in both markets. The operative part is the registration path. The SEC said it will process new and pending applications from AMF-supervised asset management companies seeking to do business in the United States as investment advisers. An MOU of this kind is what allows the Commission to rely on the home regulator for information it cannot obtain directly, which is the condition for examining a firm whose books and records sit abroad. For a French manager this makes Advisers Act registration a practical option rather than a theoretical one, with the ongoing obligations that follow: Form ADV, the compliance rule under Rule 206(4)-7, the custody rule where applicable, and examination by the Division of Examinations. What the SEC and AMF Agreement Covers The SEC and France's financial markets regulator, the AMF, entered into a memorandum of understanding to support consultation, cooperation, and information sharing. The agreement concerns certain investment advisers and investment companies regulated by the SEC and investment service providers supervised by the AMF that operate in the United States and France. SEC to Resume Processing French Investment Adviser Applications A central development is the SEC's announcement that it will process new and pending registration applications from AMF-supervised asset management companies seeking to conduct business in the United States as investment advisers. The arrangement is intended to facilitate registration and ongoing supervision through cooperation between the two regulators. Registration remains subject to applicable U.S. requirements. How Cross-Border Regulatory Cooperation Will Work The MOU establishes a framework through which the SEC and AMF can consult and exchange supervisory information about covered financial firms. This cooperation is intended to support regulatory oversight of investment businesses operating across both jurisdictions. Information Sharing Between U.S. and French Regulators The agreement provides a channel for the regulators to share relevant supervisory information. The announcement does not specify new reporting deadlines or additional compliance obligations for individual firms. What French Asset Managers Should Consider AMF-supervised asset managers considering U.S. investment advisory activities should evaluate whether SEC registration is required, review applicable U.S. regulatory obligations, and prepare the documentation needed for the registration process. Firms already operating across both markets should also consider how coordinated regulatory supervision may affect their compliance procedures. How SJKP Can Help SJKP can assist investment advisers, asset managers, and financial services companies with U.S. securities regulations, investment management compliance, and cross-border business matters. Foreign financial firms considering entry into the U.S. market can work with counsel to evaluate applicable registration requirements and regulatory obligations.

19 Oct, 2026

California Sues ICE Over Immigration Arrests at State Courthouses

California Attorney General Rob Bonta filed a federal lawsuit on October 15, 2026, challenging ICE's policy and practice of conducting civil immigration arrests at state courthouses. The complaint alleges violations of the Administrative Procedure Act and the Tenth Amendment, raising questions about federal immigration enforcement authority and access to state judicial proceedings. Why California Filed the Lawsuit California Attorney General Rob Bonta filed suit against the Department of Homeland Security and ICE in the Central District of California on October 15, 2026, challenging civil immigration arrests at state courthouses.The complaint pleads three Administrative Procedure Act claims and a Tenth Amendment claim. The statutory claim is the one to watch: that the Immigration and Nationality Act incorporated the common-law privilege against civil arrest at courthouses, so immigration officers were never granted that authority in the first place. What Legal Arguments Is California Making? California challenges the courthouse enforcement policy under the Administrative Procedure Act, arguing that ICE failed to adequately consider its effects on state courts and exceeded its statutory authority. The state also alleges that the policy interferes with powers reserved to states under the Tenth Amendment. The Historical Protection Against Civil Arrests The complaint relies partly on a longstanding common law privilege against certain civil arrests at courthouses. California argues that Congress did not eliminate this protection when authorizing federal civil immigration enforcement. Whether that protection limits the challenged ICE practices is a disputed legal question. How Courthouse Enforcement Has Changed According to California's complaint, civil immigration arrests near state courthouses increased substantially after ICE changed its enforcement policy in May 2025. The Attorney General reports that a previous directive was vacated in June 2026, but courthouse enforcement continued. California cites 28 reported incidents resulting in 28 civil arrests during July 2026. What Happens Next in the Federal Lawsuit? California seeks declaratory and injunctive relief to prevent the challenged courthouse enforcement practices from continuing. The federal court will need to consider the state's statutory and constitutional claims, along with the federal government's defenses. Filing the lawsuit does not itself prohibit ICE from conducting courthouse arrests or establish that the challenged policy violates federal law. How SJKP Can Help SJKP can assist individuals and businesses with immigration-related legal matters, federal litigation, and questions involving administrative agency actions. Individuals concerned about immigration enforcement in connection with court proceedings should seek legal guidance tailored to their circumstances and the applicable jurisdiction.

19 Oct, 2026

Fidelity Crypto Settlement: California's 28-Day Withdrawal Rule Explained

California announced a $500,000 settlement with Fidelity Digital Asset Services on October 16, 2026, resolving allegations that its former withdrawal restrictions violated the California Commodity Law. The company did not admit liability and disputes that it violated California law. The statute prohibits a commodity contract entered into primarily for speculation or investment unless the dealer delivers the commodity within 28 days of payment, and the Attorney General treats delivery of a digital asset as occurring only once the customer can move it off the platform. That reading reaches any platform that sells digital assets it does not allow customers to withdraw. Why California Investigated Fidelity's Crypto Platform California's Department of Justice investigated Fidelity Digital Asset Services after identifying restrictions on customers' ability to transfer cryptocurrency off its platform. From November 2022 through April 2025, California retail customers could buy and sell cryptocurrency but could not transfer those assets directly to external wallets. Fidelity explained that the functionality required approval from the New York Department of Financial Services. Fidelity Agreed to a $500,000 Settlement Under the agreement, Fidelity Digital Assets, National Association, as successor to Fidelity Digital Asset Services, agreed to pay $500,000 to resolve the California Attorney General's specified potential claims. The company denied wrongdoing and entered into the agreement without admitting any violation of law. How California's 28-Day Delivery Rule Applies to Crypto California's Commodity Law generally prohibits certain commodity contracts entered into primarily for investment or speculation unless physical delivery occurs within 28 days of payment. For covered cryptocurrency transactions, California regulators consider the customer's ability to withdraw purchased assets from the dealer's platform an important part of physical delivery. The rule does not establish a universal 28-day withdrawal deadline for every cryptocurrency transaction. What the Settlement Requires Fidelity's successor confirms that California customers can transfer eligible cryptocurrency to external wallets, subject to applicable laws and security restrictions. The agreement also addresses notice if retail transfer functionality is discontinued. It expressly recognizes exceptions involving certain tax-advantaged accounts, including crypto IRAs subject to applicable federal requirements. What Crypto Platforms Should Review Cryptocurrency platforms serving California customers should evaluate whether their products fall within the state's commodity contract requirements, how digital assets are delivered, and whether customers can transfer eligible assets outside the platform. Businesses should also review customer agreements, withdrawal disclosures, licensing requirements, and the interaction between state regulatory approvals and California commodity law. State Regulatory Approval Does Not Resolve Every Compliance Question The Fidelity investigation illustrates how restrictions connected to one state's regulatory approval process may create separate legal questions in another jurisdiction. Crypto businesses operating across state lines should evaluate applicable requirements in each market. How SJKP Can Help SJKP can assist cryptocurrency platforms, digital asset businesses, and financial services companies with regulatory compliance, securities and commodities matters, and state-level enforcement risks. Businesses reviewing custody arrangements, customer withdrawal policies, or digital asset operations can work with counsel to evaluate applicable legal requirements.

16 Oct, 2026

Character.AI Bankruptcy Raises Questions About Consumer Data and AI Privacy

On October 14, thirty-seven states and the District of Columbia filed a notice in the Chapter 11 case of Character Technologies, Inc., reserving their right to object to any sale of the company’s assets.The concern is the chat logs. Section 363(b)(1) of the Bankruptcy Code bars a sale of personally identifiable information that conflicts with the privacy policy in force when it was collected, unless the court appoints a consumer privacy ombudsman under § 332 and finds the sale consistent with factors that section sets out. The states also note that the restrictions on minors’ access the company adopted this year were voluntary, and that a buyer could reverse them.For anyone looking at distressed AI assets, that is the point worth taking. A user database is not a clean asset where the privacy policy promised something the buyer does not intend to keep, and the states have said they will be in court on it. Why States Are Intervening in Character.AI's Bankruptcy A coalition of state attorneys general filed a notice in Character Technologies' bankruptcy proceedings, raising concerns about consumer privacy and chatbot safety. The filing follows investigations into potential consumer protection violations and allegations involving harmful interactions between AI chatbots and minors. Sensitive Chatbot Conversations Are a Central Concern Character.AI has collected private conversations involving users' mental health, relationships, and personal experiences. State regulators are concerned about how this information could be protected if the company's business or assets are sold. What Happens to Consumer Data During Bankruptcy? When a technology company enters bankruptcy, its data holdings may raise significant legal questions during asset sales. Privacy policies, applicable consumer protection laws, and bankruptcy requirements can affect whether and how personal information may be transferred. The states are seeking safeguards for Character.AI users before any transaction involving sensitive information proceeds. AI Companies Face Growing Privacy and Safety Scrutiny The Character.AI proceedings highlight regulatory concerns involving AI chatbots that interact with minors and collect sensitive personal information. California's recently enacted Adam's Law, SB 1119, is scheduled to take effect in 2027 and will establish additional requirements addressing AI chatbots and child safety. Voluntary Safety Measures May Not Resolve Regulatory Concerns Although Character.AI has voluntarily restricted minors' access to certain chatbot features, state attorneys general argue that these protections may be incomplete or subject to reversal by a future purchaser. What AI Businesses and Potential Buyers Should Consider Companies acquiring AI platforms or other data-intensive businesses should evaluate privacy obligations, data retention practices, user consent, children's safety measures, and regulatory investigations before completing a transaction. Existing legal obligations and commitments concerning personal information may affect how acquired data can be used or transferred. How SJKP Can Help SJKP can assist technology companies, investors, and businesses with corporate transactions, data privacy considerations, regulatory compliance, and legal risks involving AI technologies. Companies evaluating acquisitions or restructuring transactions involving sensitive consumer information can work with counsel to assess applicable privacy obligations and potential regulatory exposure.

13 Oct, 2026

SEC Proposes Changes to Rule 17a-7: What Investment Funds Should Know

On October 9, the SEC proposed amendments to Rule 17a-7 that would restore cross trading for most fixed-income securities (Release No. IC-36358, 91 FR 65622). Comments are due December 14.The eligibility test is the change. The current rule reaches only securities with readily available market quotations, which in practice has meant listed equities. The proposal extends it to securities valued on observable inputs — Level 2 under GAAP — and leaves Level 3 out. The adviser would make a best-interest determination before each trade, and the CCO would review quarterly in place of the board’s current determination.First real opening for fixed-income managers since the 1980s. The question is whether adviser-reviewed Level 2 pricing holds without the board in that seat. What Is Cross Trading Under Rule 17a-7? Cross trading allows registered investment funds to buy or sell securities directly with certain affiliated parties under specified conditions. Rather than executing transactions through the open market, eligible funds can transfer securities between affiliated portfolios, potentially reducing transaction costs. Rule 17a-7 provides an exemption from certain restrictions on affiliated transactions under the Investment Company Act. What the SEC Is Proposing The SEC proposes expanding the securities eligible for cross trading, particularly fixed-income securities that became difficult to cross trade following the adoption of the fund valuation rule in 2020. The amendments would modernize Rule 17a-7 to reflect developments in securities pricing and trading practices. Fixed-Income Securities Could Become Eligible Again The proposal would restore the ability to cross trade most fixed-income securities, potentially allowing registered funds to execute more transactions between affiliated portfolios without incurring the costs associated with open-market trading. New Pricing, Oversight and Reporting Requirements The proposed amendments would update the conditions governing cross trades, including pricing and oversight requirements intended to protect fund investors. The SEC also proposes aggregated reporting of trading activity and cross trades by participating registered funds, providing additional transparency into how these transactions are conducted. What Fund Managers Should Consider Investment advisers and fund compliance teams should evaluate how expanded cross-trading eligibility could affect portfolio management, transaction costs, valuation practices, and existing compliance procedures. Firms may also need to assess their pricing methodologies, oversight processes, and reporting capabilities if the amendments are adopted. Existing Rule 17a-7 requirements remain applicable while the proposal is under consideration. Balancing Cost Savings With Investor Protection Although cross trading can reduce transaction expenses, transactions between affiliated funds require safeguards against conflicts of interest and unfair pricing. Fund managers should consider whether their existing controls adequately address these risks. How SJKP Can Help SJKP can assist investment advisers, registered funds, and financial institutions with investment management regulations, securities compliance, affiliated transactions, and fund governance. Firms evaluating the proposed Rule 17a-7 amendments can work with counsel to review cross-trading policies, assess regulatory risks, and prepare for potential changes to SEC requirements.