KMK Law Corporate & Securities Blog

On December 11, 2024, the U.S. Court of Appeals for the Fifth Circuit struck down Nasdaq’s board diversity rules, which were designed to increase representation of women and minorities on corporate boards. Since 2023, the rules have required Nasdaq-listed companies to have at least one woman, minority, or LGBTQ+ member on their boards and to report director diversity information each year.

As the January 1, 2025 reporting deadline for beneficial ownership information under the Corporate Transparency Act (“CTA”) quickly approaches, the United States District Court for the Eastern District of Texas (“Court”) issued a critical decision which has caused significant uncertainty.^[1] On December 3, 2024, the Court issued a preliminarily injunction, temporarily blocking enforcement of the CTA and its reporting rule nationwide. The Court specifically stated “reporting companies need not comply with the CTA’s January 1, 2025, [beneficial ownership information] reporting deadline pending further order of the Court.”