On April 7, the Federal Reserve chair and U.S. Treasury secretary called an emergency meeting with America’s top bank CEOs. The reason: an AI model capable of autonomously hacking major corporations, finding thousands of software vulnerabilities no human ever caught, and breaking out of its own testing environment. The model sent an unsolicited email to
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Sullivan & Cromwell Discusses Warnings to Bank CEOs About Cybersecurity Risks of Anthropic’s New AI Model
On April 7, 2026, Treasury Secretary Scott Bessent and Federal Reserve Chair Jerome Powell convened an urgent, closed-door meeting with the CEOs of some of the nation’s largest banks to discuss the cybersecurity risks posed by Anthropic’s newly announced AI model, Claude Mythos Preview (“Mythos”).[1] According to news reports, the meeting was held to…
Intellectual Property Collateral and the Governance of Innovation Finance
Over the past several decades, the idea of what counts as corporate value has changed dramatically. Firms across technology, healthcare, and life sciences increasingly derive competitive advantage from intangible assets rather than physical capital. These assets include patents, software, proprietary data, and algorithms. As a result, lenders and private credit providers now finance companies whose
…
Rethinking Materiality in the Debate Over ESG
For nearly a decade, debates over ESG – environmental, social, and governance – disclosures have dominated corporate law and securities regulation. Should companies be required to disclose information about climate risk, workforce diversity, or governance practices? At first glance, this appears to be a policy question. In reality, it is a doctrinal one. The ESG…
SEC Announces Enforcement Results for Fiscal Year 2025
Central to an effective enforcement program is determining which cases to bring and responsibly stewarding Commission resources. Regrettably, such resources have been misapplied in prior years to pursue media headlines and run up numbers, and in turn, led to misguided expectations on what constitutes effective enforcement.
Fiscal Year 2025 Results & Supporting Context
During fiscal…
People and Persons: A Necessary Distinction When Thinking about Firms, Ecology, and Artificial Intelligence
By Eric W. Orts
In two forthcoming book chapters, I argue for maintaining conceptual clarity about the difference between people – that is, the natural kind of the human species – and persons created as artificial entities with rights (and often but not always duties).[1] This distinction has long been recognized by philosophers and legal theorists, with one…
Cleary Discusses Managing AI Risks: Legal and Governance Imperatives for Boards
AI adoption is now mainstream: 88% of businesses use AI in at least one function, with global spending expected to exceed $1.5 trillion in 2025 and approach $2 trillion in 2026. As organizations race to scale AI, many have relied upon traditional vendor risk management policies to vet third-party AI vendors and tools; however, implementation…
Debevoise Discusses Judge Rakoff’s Written Opinion on AI-Generated Documents
We wrote recently about a decision in which Judge Rakoff of the Southern District of New York denied the claim of defendant Bradley Heppner that documents prepared by Heppner using the consumer version of the AI model Claude for legal research were privileged. On February 17, 2026, Judge Rakoff issued a written opinion explaining the…
New Survey Informs Board Oversight of Chief Legal Officers
The 2026 edition of the annual Chief Legal Officers Survey (“Survey”) from the Association of Corporate Counsel validates the continuing evolution of senior in-house corporate counsel from strictly technical experts to also wise counselors and business partners to management. In addition, the Survey identifies a series of administrative and operational challenges confronting senior in-house counsel.…
Who Bears the Risk of AI Use in Mergers & Acquisitions?
Artificial intelligence (AI) is increasingly being integrated into mergers and acquisitions (M&A), supporting negotiations, determining the value of the target, drafting relevant contracts – and, most important, helping perform due diligence. Yet, its role in this context raises questions about liability, fiduciary duties, and the validity of corporate transactions. In a new paper, we offer…