Month: January 2026

(Reuters) – Legal technology firm Alexi is mounting a counterattack against Fastcase and its parent company Clio, accusing them of trying to use an “objectively baseless” trade secrets lawsuit to eliminate the company as a rival in artificial intelligence-backed research.

In counterclaims filed Friday in Washington, D.C., federal court, Alexi said that since acquiring Fastcase three years ago, Clio has orchestrated a bad-faith campaign to destroy Alexi as an AI-research competitor by dominating the market and breaching a contract that gives any future acquirer of Alexi the right to buy Fastcase’s vast legal research library without restrictions.

Alexi said customers have canceled or not renewed their subscriptions after Fastcase sued it in November. Investors and potential acquirers of Alexi have also been scared off due to Clio’s lawsuit, and Alexi has had to lay off two-thirds of its staff, the countersuit said.

Clio’s abusive tactics, from pressuring Alexi to give up its contractual rights, to filing baseless claims, to cutting off critical updates and sowing fear among customers and potential acquirers, reflect a deliberate plan to neutralize Alexi as a competitor.

Alexi said in its lawsuit. A Clio spokesperson said Fastcase “categorically denies” Alexi’s allegations and called them baseless. The spokesperson said Alexi sought to shift attention from its misuse of Fastcase’s data and “challenges Fastcase for enforcing its contractual rights and protecting intellectual property it has built over many years.”

The case stems from a licensing deal Alexi signed with Fastcase in 2021, before Fastcase merged with vLex in 2023. As part of that deal, Alexi said it retained access to Fastcase’s online law library even if Alexi is bought by another company. After Clio acquired Fastcase when it bought vLex for $1 billion last year, Alexi alleged Clio tried to pressure it into giving up that contractual right without getting anything in return.

Fastcase alleged in its lawsuit that Alexi was barred from publishing or distributing any part of the Fastcase database. Fastcase said that Alexi not only trained its generative AI models on Fastcase data but also displayed Fastcase-sourced case law to users and used Fastcase’s trademarks in its interface, creating a false impression of affiliation. Alexi denied wrongdoing and said in its counterclaims that Fastcase has known about and supported its AI service for years.

Alexi is seeking an unspecified amount of damages, as well as a court order requiring Clio to “license the Fastcase database to rival AI legal analysis service providers on non-discriminatory terms.”

In addition to counterclaims of breach of contract and tortious interference, Alexi also alleged that Clio’s acquisition of vLex and Fastcase violated federal antitrust law, as it “may substantially lessen competition in the market for AI legal analysis services that rely on access to comprehensive primary-caselaw data.”

(Reuters) – The U.S. Federal Trade Commission is seeking to revive its case accusing Facebook parent company Meta Platforms of bolstering an illegal monopoly by acquiring Instagram and WhatsApp, the FTC’s spokesperson said on Tuesday.

The case is part of a crackdown on Big Tech that President Donald Trump started during his first term. Despite a ruling last year dismissing the case, “our position has not changed,” FTC spokesperson Joe Simonson said.

Meta violated our antitrust laws when it acquired Instagram and WhatsApp. Consequently, American consumers have suffered from Meta’s monopoly.

Simonson said. Facebook bought Instagram in 2012 and WhatsApp in 2014. The FTC did not seek to block the deals at the time, but sued in 2020 alleging that Meta, then known as Facebook, held a monopoly on U.S. platforms used to share content with friends and family.

The agency sought to force Meta to restructure or sell Instagram and WhatsApp to restore competition, saying the company spent billions of dollars on the acquisitions to eliminate nascent competitors.

U.S. District Judge James Boasberg in Washington ruled in November that the company does not hold a monopoly now because it faces competition from TikTok.

The District Court’s decision to reject the FTC’s arguments in this matter is correct – and it recognizes the fierce competition we face. Meta will remain focused on innovating and investing in America.

Meta spokesperson Andy Stone said in a post on social media site X on Tuesday.

Bill Hwang, the founder of Archegos Capital Management, has sought a presidential pardon for his conviction in the collapse of his fund that cost Wall Street banks more than $10 billion.

The former billionaire investor, who was sentenced to 18 years in prison in 2024, applied last year for a pardon after completion of sentence with the U.S. Justice Department, according to the agency’s website.

Archegos, a family office that once managed $36 billion, collapsed in 2021 when Hwang failed to meet margin calls on bank loans he had obtained to make large bets on media and technology stocks.

A jury in 2024 convicted Hwang on multiple criminal charges including wire fraud, securities fraud and market manipulation after prosecutors accused him of lying to banks about Archegos’ portfolio so he could borrow money aggressively.

The Justice Department’s Office of the Pardon Attorney makes recommendations to the President on pardon applications, which can take months or years to be processed, according to the agency.

A White House official did not comment on the clemency request but said the President is the final decider on all pardons or commutations.

The Justice Department did not immediately respond to Reuters’ request for a comment.

Since returning to office last year, President Donald Trump has granted a flurry of pardons, many of which were for white-collar criminals and political allies.

(Westlaw) Apple Inc. has persuaded a California federal judge to dismiss a proposed class action accusing the tech giant of illegally collecting user data from its mobile apps even after users disable data-sharing options.

In re Apple Data Privacy Litigation, No. 22-cv-7069, 2026 WL 146025 (N.D. Cal. Jan. 20, 2026).

U.S. District Judge Edward J. Davila of the Northern District of California on Jan. 20 dismissed the plaintiffs’ first amended complaint, ruling that they failed to state viable claims under the California Invasion of Privacy Act, Cal. Penal Code §§ 632 and 638.51, or the state’s constitution.

Judge Davila granted the plaintiffs one more opportunity to amend their complaint to cure the deficiencies identified in his order.

Analytics tracking allegations

The lawsuit, originally filed in 2022, centered on allegations that Apple continued to track and record user activity within its proprietary apps — including the App Store, Apple Music, Apple TV, Books and Stocks — even after users had disabled the “Share iPhone Analytics” setting on their devices.

The plaintiffs relied heavily on a report by software company Mysk, which said Apple’s analytics data included detailed information such as device identifiers, search terms and keyboard languages.

They asserted causes of action for eavesdropping and the use of illegal pen registers under CIPA, invasion of privacy under California’s constitution, and violation of the state’s unfair-competition law, Cal. Bus. & Prof. Code § 17200.

Apple moved to dismiss, saying the plaintiffs failed to state a claim because the company had sufficiently disclosed its data collection practices in its privacy policy and software license agreements. Apple also contended that users could not have a reasonable expectation of privacy regarding data that was necessary for the apps to function.

The plaintiffs opposed the motion, arguing that the data collected — such as specific search terms and referral URLs — revealed intimate details about their lives and constituted “confidential communications” protected by state law.

Pen register, eavesdropping theories rejected

Judge Davila rejected the plaintiffs’ argument that Apple’s apps functioned as illegal “pen registers” in violation of CIPA.

He agreed with Apple that the apps themselves could not be pen registers because they were the source of the communications, not a separate recording device.

Apple’s first-party apps and their underlying processes are a part of the source of the transmitted communications, which is enough to disqualify them from being pen registers.

Judge Davila wrote. The judge also dismissed the eavesdropping claims under CIPA, saying internet communications are recorded “by their very nature” and thus not confidential.

He further determined that data points like device resolution and how long an app was viewed do not qualify as communications involving the exchange of ideas. While the judge noted that one plaintiff’s search terms — such as “roommate” and “used cars” — could constitute communications, the claim still failed because the data was not confidential.

Judge Davila dismissed the claims under California’s constitution because the plaintiffs did not have a reasonable expectation of privacy in the data Apple collected to process their transactions.

Finally, the judge dismissed the unfair-competition law claims for lack of standing.

Attorneys from Bursor & Fisher PA and Lynch Carpenter LLP represent the plaintiffs. Attorneys from Covington & Burling LLP represent Apple.

(Reuters) Paramount Skydance on Monday sued Warner Bros Discovery for more information on a rival $82.7 billion deal with Netflix, escalating a battle to take control of one of the most storied Hollywood studios.

The David Ellison-led company also said it planned to nominate directors to Warner Bros’ board, in one of its most aggressive steps to convince investors that its $108.7 billion all-cash bid is superior to Netflix’s cash-and-stock deal.

Paramount and Netflix have been in a heated battle for Warner Bros, its prized film and television studios and its extensive content library, which includes "Harry Potter" and the DC Comics universe.

Warner Bros last week rejected Paramount’s latest offer, advising shareholders to vote in favor of the Netflix deal.

In a letter to shareholders, Paramount also said it would propose an amendment to Warner Bros’ bylaws that would require shareholder approval for any separation of the media giant’s cable TV business, which is key to the Netflix deal.

Paramount’s argument is that its all-cash bid of $30 per share for the whole of Warner Bros is superior to Netflix’s cash-and-stock offer of $27.75 per share for the studios and streaming assets and will more easily clear regulatory hurdles.

Paramount filed the lawsuit in the Delaware Court of Chancery, seeking to force disclosure of the financial analysis behind the Warner Bros board’s support for the Netflix merger.

‘RAISE THE BID. MONEY TALKS’

The CBS parent said last week the value of Warner Bros’ cable spinoff was virtually worthless and reiterated its amended bid after another rejection from Warner Bros’ board. With Monday’s lawsuit, Paramount has escalated its actions, but it has not yet increased the price it is willing to pay.

I don’t think the lawsuit matters much. It would take ages to get through the court system if they full-on go that route. If they want Warner Bros bad enough, raise the bid. Money talks.

Craig Huber, analyst at Huber Research Partners, said.

Warner Bros has also said it will owe Netflix a $2.8 billion termination fee if it walks away from the agreement, part of $4.7 billion in extra costs to end the deal.

The amended proposal had included $40 billion in equity personally guaranteed by Oracle’s co-founder Larry Ellison, the father of Paramount CEO David Ellison, and $54 billion in debt.

WBD has provided increasingly novel reasons for avoiding a transaction with Paramount, but what it has never said, because it cannot, is that the Netflix transaction is financially superior to our actual offer.

Paramount wrote in the investor letter.

Unless the WBD board of directors decides to exercise its right to engage with us under the Netflix merger agreement, this will likely come down to your vote at a shareholder meeting.

it added.

Paramount argued that the disclosure of Warner Bros’ financial analysis is crucial for investors weighing whether to tender their shares to Paramount before the offer – which can be extended – expires on Jan. 21.

Time is of the essence. Any decision concerning an extension will depend, in part, on the number of shares tendered.

Paramount said in the lawsuit against Warner Bros, CEO David Zaslav and key investor John Malone, among others.

Warner Bros said in a statement that the lawsuit was "meritless", adding that Paramount had yet to "raise the price or address the numerous and obvious deficiencies of its offer".

Netflix did not immediately respond to a request for comment.

Shares of Warner Bros were down 1.6% on Monday, while Netflix was flat and Paramount up 0.4%.

(Westlaw) A California federal judge has paved the way for a jury trial in Elon Musk’s lawsuit against OpenAI, while a federal appeals court considers whether to allow social media addiction lawsuits against Meta and other platforms.

Here’s a roundup of recent events in the world of Big Tech.

Artificial intelligence

A California federal judge has ruled that billionaire Elon Musk’s lawsuit alleging ChatGPT maker OpenAI violated its founding mission by restructuring into a for-profit entity can proceed to a jury trial. U.S. District Judge Yvonne Gonzalez Rogers of the Northern District of California said Jan. 7 that there was ” plenty of evidence” suggesting OpenAI’s leaders had made assurances that its original nonprofit structure would be maintained, according to Reuters. Musk v. Altman et al., No. 24-cv-4722, hearing held (N.D. Cal. Jan. 7, 2026).

The European Commission has ordered Musk’s X to retain all documents relating to its AI chatbot, Grok, until the end of 2026, according to Reuters. The commission extended the order to ensure compliance with the EU’s Digital Services Act after the bloc condemned Grok for producing sexualized images, including of Sweden’s deputy prime minister.

Online harm

A 9th U.S. Circuit Court of Appeals panel on Jan. 6 appeared skeptical of arguments from Meta Platforms Inc. and other social media companies seeking immunity from more than 2,200 lawsuits alleging the platforms are designed to be addictive for young users. The platforms, which include Snapchat, YouTube and TikTok, argue that Section 230 of the Communications Decency Act, 47 U.S.C.A. § 230, shields them from liability. The panel questioned whether the statute provided such broad immunity, according to Reuters. People of the State of California v. Meta Platforms Inc., No. 24-7032, oral argument held (9th Cir. Jan. 6, 2026).

Alphabet’s Google and AI startup Character.AI have agreed to settle a lawsuit brought by a Florida mother who alleged the startup’s chatbot led to the suicide of her 14-year-old son. A Jan. 7 court filing said the companies agreed to settle Megan Garcia’s allegations that her son killed himself after being encouraged by a Character.AI chatbot. The lawsuit was one of the first in the U.S. to target an AI firm over alleged psychological harm, according to Reuters. Garcia et al. v. Character Technologies Inc. et al., No. 24-cv-1903, notice of resolution filed (M.D. Fla. Jan. 7, 2026).

Cybersecurity and data privacy

Block Inc. must face a proposed class action claiming it concealed poor security measures that allowed users of its Cash App to create bogus accounts, leading to nearly $300 million in fines. U.S. District Judge Noël Wise of the Northern District of California on Jan. 6 denied Block’s motion to dismiss, saying the suit adequately pleads that company statements touting its regulatory commitment hid an underinvestment in customer verification protocols. Gonsalves v. Block Inc. et al., No. 25-cv-642, 2026 WL 42657 (N.D. Cal. Jan. 6, 2026). Read more: 2026 SECDBRF 0087

Law firm Norton Rose Fulbright will receive more than $156 million in legal fees for representing Texas in consumer privacy litigation against Google that led to a $1.375 billion settlement, according to contract records obtained by Reuters. The settlement resolved claims that Google tracked users’ locations despite disabled settings and misled users about incognito mode privacy.

(JD Supra) The SEC staff issued a no-action letter on December 11, 2025 to the Depository Trust Company (DTC), a subsidiary of the Depository Trust & Clearing Corporation (DTCC) granting relief under certain provisions of the federal securities laws for a three-year period to permit DTC to offer a tokenization service with respect to certain DTC custodied assets (DTCC Tokenization Services). Given the scope of DTC in the US securities market, the no-action letter represents a notable development in the path to the tokenization of securities within the US markets.

DTC is a registered clearing agency under Section 17A of the Securities Exchange Act of 1934, as amended (Exchange Act), a central securities depository, and a systematically important financial market utility. In its request for no-action relief, DTCC, on behalf of DTC, sought assurance that the US Securities and Exchange Commission (SEC) staff in the Division of Trading and Markets (the Staff) would not recommend enforcement action if DTC were to develop and operate the DTCC Tokenization Services, beginning with a limited pilot version (the Preliminary Base Version). The Preliminary Base Version allows DTC Participants to elect to have their security entitlements to DTC-held securities recorded and transferred using distributed ledger technology, rather than exclusively through DTC’s traditional centralized book-entry ledger.

The proposal does not alter the existing indirect holding model or the legal characterization of securities interests under Article 8 of the Uniform Commercial Code (UCC). Securities would remain registered in the name of Cede & Co., and DTC Participants would continue to hold security entitlements against DTC as securities intermediary. The tokens themselves are not the securities and are not security entitlements. Rather, the tokens serve as an alternative method for instructing DTC to record and transfer the security entitlements on DTC’s official books and records.

SCOPE OF THE NO-ACTION RELIEF

The Staff agreed not to recommend enforcement action against DTC for violations of the following provisions of the Exchange Act, solely in connection with the operation of the Preliminary Base Version of the DTCC Tokenization Services:

• Regulation Systems Compliance and Integrity
• Section 19(b) of the Exchange Act and Rule 19b-4 thereunder
• Exchange Act Rules 17Ad-22(e) and 17Ad-25(i) and (j)

The relief is limited to DTC, applies only to the Preliminary Base Version of the DTCC Tokenization Services, and extends for a three-year period from the date DTC launches operation of the Preliminary Base Version. The Staff’s position is further conditioned upon DTC’s continued compliance with the representations, limitations, and controls described in its request letter.

KEY FEATURES OF THE TOKENIZATION SERVICES

Under the Preliminary Base Version of the DTCC Tokenization Services:

• Eligible securities are limited to highly liquid assets, including securities in the Russell 1000 Index, certain exchange-traded funds tracking major security indices, and US Treasury bills, notes, and bonds (the Subject Securities).
• Participation is voluntary and limited to DTC Participants.
• A participating DTC Participant must register one or more wallet addresses for an approved blockchain wallet (each, a Registered Wallet) with DTC for the purpose of holding tokens associated with the security entitlements.
• Tokenization occurs after DTC debits the Subject Securities from a DTC Participant’s book-entry account at DTC and credits them to a Digital Omnibus Account, a single omnibus account maintained by DTC on its centralized ledger that reflects the sum of all tokens held in all Registered Wallets.
• Tokens are associated with a DTC Participant’s security entitlements to the Subject Securities that have been moved from the DTC Participant’s book-entry account at DTC to the Digital Omnibus Account. While securities themselves are credited to the Digital Omnibus Account, the corresponding tokens may be transferred between Registered Wallets without further instruction to DTC. A DTC Participant may move securities back to its book-entry account by instructing DTC to de-tokenize the position, at which point the token is burned and the securities are re-credited to the DTC Participant’s book-entry account.
• Transfers of tokens between Registered Wallets may occur 24/7, and DTC will monitor and record such transfers through LedgerScan, an off-chain system that scans approved blockchains and records token movements and Registered Wallet holdings in near real time. After taking into account the recording of the tokens or their transfer, LedgerScan constitutes DTC’s official books and records.
• Tokens do not receive any collateral or settlement value for DTC risk management purposes.
• DTC retains administrative control over the tokens, including the ability to mint, burn, or forcibly transfer tokens in limited circumstances to address erroneous entries, lost tokens, or malfeasance.
• DTC Participants remain subject to applicable anti-money laundering and Know Your Customer compliance obligations, and DTC will independently perform Office of Foreign Assets Control (OFAC) sanctions screening on each Registered Wallet before permitting its use in the DTCC Tokenization Services.

REGULATORY AND OPERATIONAL SAFEGUARDS

The Staff’s no-action position relies on a series of safeguards designed to limit systemic risk and protect investors, including the following:

• Strict eligibility criteria for securities, participants, supported blockchains, and tokenization protocols
• Separation of tokenization systems (i.e., LedgerScan and Factory) from DTC’s core clearance and settlement systems
• Ongoing anti-money laundering/Know Your Customer requirements for DTC Participants and OFAC screening of Registered Wallets
• Detailed quarterly reporting obligations to the Staff regarding participation levels, asset volumes, systems performance, and governance matters
• Transparency commitments, including public disclosure of supported blockchains, prescribed technology standards, and fees

TAKEAWAYS

The no-action letter represents a notable, but carefully circumscribed, development in the regulatory treatment of securities tokenization in the United States. The relief provides a defined and supervised framework for DTC to evaluate the use of blockchain-based recordkeeping for traditional securities within the existing clearing agency infrastructure, while preserving established legal constructs under the federal securities laws and Article 8 of the UCC.

At the same time, the no-action letter should be viewed as narrow and highly fact-specific. The relief applies only to DTC, the Preliminary Base Version of the DTCC Tokenization Services, and for a limited three-year period, and it is expressly conditioned on DTC’s continued adherence to the representations, limitations, and controls described in its request. The no-action letter does not establish a general regulatory framework for tokenized securities, nor does it provide relief to other market participants seeking to implement similar services.

The availability of the Preliminary Base Version of the DTCC Tokenization Services is limited to DTC Participants, which are primarily large financial institutions, such as US broker-dealers and banks, that hold securities at DTC to facilitate clearing, settlement and custody. Public companies that are the issuers of securities held at DTC are generally not DTC Participants and, therefore, will not be able to unilaterally request that entitlements to their securities be tokenized under the program. Moreover, the consent of issuers is not required for DTC Participants to issue tokens associated with security entitlements. As such, the Preliminary Base Version is not akin to direct registration, which allows shareholders to hold shares directly in their own name, rather than through a broker, and provides an issuer with increased transparency with respect to its investors.

From a shareholder perspective, the Preliminary Base Version is expected to provide increased optionality in how beneficial interests are held and transferred, including enhanced mobility of positions between eligible intermediaries, improved transparency into position movements, and the potential for future programmability of interests in securities. Importantly, these potential benefits are achieved without altering investors’ legal rights or the Article 8 security entitlement structure, and without displacing DTC’s role as central securities depository and securities intermediary.

Market participants considering tokenization or other distributed ledger technology-enabled securities initiatives should continue to assess carefully the interaction among the federal securities laws, clearing agency regulation, and state commercial law principles, including Article 8 of the UCC. As programs evolve beyond pilot phases or seek to expand functionality, additional SEC engagement, rulemaking, or exemptive relief may be required.

(Syndigate) Blockchain Regulation Senators Lummis and Wyden introduce a standalone bill protecting non-custodial DeFi developers as the Senate prepares to mark up broader crypto market structure legislation this week.

U.S. Senator Cynthia Lummis introduced a standalone bill aimed at protecting non-custodial blockchain developers from being classified as money transmitters, as the Senate prepares to unveil the long-awaited draft of its broader crypto market structure legislation ahead of a key markup this week.

The bipartisan proposal, co-sponsored by Senator Ron Wyden, revives the Blockchain Regulatory Certainty Act, clarifying that software developers, miners, validators, and infrastructure providers who do not control user funds or hold private keys should not fall under federal money transmission rules. The bill reinforces the principle that “code is not custody,” limiting regulatory liability to entities that actually control customer assets.

Standalone Bill Highlights Developer Protections

The move comes amid intense last-minute negotiations over the Senate’s comprehensive Digital Asset Market Clarity Act, expected to be finalized and made public as early as Tuesday, with a Senate Banking Committee markup scheduled for Thursday. While earlier drafts of the market structure bill included similar developer protections, that language has remained a point of contention during negotiations.

It’s time to stop treating software developers like banks simply because they write code.

Lummis said, emphasizing growing concern that recent enforcement actions risk criminalizing open-source software development.

Industry advocates note that the standalone bill is intended to demonstrate bipartisan support for protecting non-custodial developers, even as uncertainty remains over whether the provision will survive in the broader market structure package. The Blockchain Regulatory Certainty Act initially originated in the House before being incorporated into Senate discussions, and the new Senate version mirrors that earlier House language.

Stablecoin Yield Restrictions May Favor Banks

The latest leaked draft of the Clarity Act (page 189) includes provisions restricting companies from paying interest solely on stablecoin balances. Users may still earn rewards, but only by taking specific actions, such as trading, staking, providing liquidity or collateral, or participating in governance. Crypto journalist Eleanor Terrett noted that banks may have gained the upper hand in negotiations on stablecoin yields. Senators have 48 hours to submit amendments, leaving it unclear whether the rules will remain unchanged in Thursday’s markup.

The Senate Banking Committee is set to review the finalized draft Thursday, while the Senate Agriculture Committee has delayed its markup to the end of the month to allow more time for bipartisan compromise. The outcome could shape U.S. crypto regulation and the DeFi ecosystem for years to come.

Bitcoin traded flat near $92,000 following the developments, while broader crypto markets showed little immediate reaction. Analysts say the outcome of Thursday’s markup could have lasting implications for DeFi innovation and institutional participation in U.S. crypto markets.