FORT WORTH, January 10, 2022 - The Securities and Exchange Commission (SEC), under the Biden Administration, has prioritized enforcement of disclosures concerning Environmental, Social, and Governance Issues (ESG), creating an enforcement task force to examine misconduct related to these disclosures. 

Recently, the SEC’s Fort Worth regional office reportedly launched an investigation into ESG disclosures by underwriters relating to investments in the oil-and-gas and firearm industries. Many financial institutions have enacted policies limiting their participation in these industries. 

In response, recently enacted provisions of the Texas Government Code place restrictions on the ability of Texas governmental entities, such as state and local governmental bodies issuing securities, to invest with, or enter into contracts with, companies that “boycott” or “discriminate” against the oil-and-gas and firearm industries*.

“The new laws require financial institutions doing business with Texas governmental entities to certify they are not boycotting or discriminating against these types of companies,” said Toby Galloway, a Shareholder and is Chair of the firm’s, Securities Litigation & Enforcement group.

“The SEC is reportedly investigating whether financial institutions doing underwriting work in Texas are being consistent in what they disclose to investors and the State of Texas regarding these hot-button issues. It will be interesting to see if this emphasis on ESG disclosure will continue to grow,” added Mr. Galloway.

To book an interview with Mr. Galloway, please contact Stephen Hastings at Winstead.

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