SEC/FDA/FTC Regulatory Watch — Week of May 28–June 1, 2026
The SEC proposes scrapping its 2024 climate-disclosure mandate and charges a Texas man in a $12.3M AI-bot fraud; the FDA issues landmark guidance to reduce animal testing for cancer drugs and approves durvalumab + BCG for bladder cancer; the FTC opens a formal antitrust investigation into fertilizer pricing targeting CF Industries, Nutrien, and Mosaic.
The week's biggest move came from the SEC, which proposed scrapping its 2024 climate disclosure mandate in its entirety — a formal reversal nearly two years in the making. The FDA issued its most consequential drug-development guidance in years, targeting the animal-testing requirements that extend cancer drug timelines by a decade or more. And the FTC opened an antitrust probe into the fertilizer market, pressing CF Industries, Nutrien, and Mosaic on pricing after urea prices surged 55% since the Strait of Hormuz closed.
SEC: Climate rules on the way out, crypto fraud charged, Reg BI settlement
SEC proposes full rescission of climate disclosure rules
On May 29, the Commission voted to propose rescinding the 2024 climate-related disclosure rules in their entirety, formally abandoning the rule that required most public companies to report greenhouse gas emissions, climate-related risk management, and the financial effects of severe weather.1
The proposal cites four grounds: the rules exceed statutory authority; they are inconsistent with a materiality-based approach to disclosure; they impose costs not justified by investor benefit; and they work against the agency's capital-formation mandate.1 Chairman Atkins, in his statement accompanying the proposal, framed it as a return to the SEC's "core mandate."
The procedural history is worth tracking. The original rules were approved in March 2024, stayed in April 2024 pending litigation in the Eighth Circuit, and the Commission voted in March 2025 to stop defending them in court. The Eighth Circuit then held the consolidated petitions in abeyance, explicitly conditioning further review on whether the Commission would reconsider through notice-and-comment rulemaking. This proposal satisfies that condition and starts a 60-day public comment period following Federal Register publication.
What to watch: Comment period close date (expected late July 2026 if published imminently). The Eighth Circuit abeyance order remains in place pending further action. Any judicial challenge to the rescission itself would likely restart in the same circuit.
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SEC charges Texas man in $12.3M AI trading-bot fraud
The SEC filed a civil complaint on May 28 against Nathan Fuller of Cypress, Texas, alleging he raised approximately $12.3 million from about 150 investors through his company Privvy Investments, LLC, by falsely promising returns of 40–100%+ using proprietary AI-based high-frequency arbitrage bots.2
According to the complaint, the bots did not function as described. Fuller allegedly misappropriated at least $6.2 million for personal expenses and used another $5.5 million to make Ponzi-like payments to earlier investors, while sending fabricated account statements and fake correspondence from invented entities. The SEC also alleges Fuller falsely told investors their funds were secured by a surety bond, insured by the FDIC, and protected by professional-liability insurance — none of which was true.
Charges include Securities Act §§5(a), 5(c), and 17(a), Exchange Act §10(b), and Rule 10b-5. The case is pending in the Southern District of Texas (No. 4:26-cv-04237). The SEC's Cyber and Emerging Technologies Unit assisted.
David Lerner Associates settles Reg BI charges: $201K in penalties
The SEC settled administrative charges against David Lerner Associates, Inc. (DLA), a New York-based registered broker-dealer, for two sets of Regulation Best Interest violations spanning June 2020 through at least early 2026.3
- Mutual fund switching: DLA representatives recommended at least 253 Class A mutual fund switches — selling one fund family and buying another within a year — generating approximately $230,000 in new upfront sales charges without adequately considering the cost of staying within the same fund family.
- Customized Investment Plans: From June 2020 through April 2026, DLA lacked written policies reasonably designed to ensure its "Customized Investment Plans" were presented in compliance with Reg BI.
Without admitting the findings, DLA agreed to a cease-and-desist order, a censure, and to pay disgorgement of $126,548, prejudgment interest of $15,133, and a civil penalty of $60,000. A Fair Fund will distribute the ordered relief to harmed investors.
FDA: Cancer drug guidance overhaul, three approvals
Draft guidance: cut animal testing for cancer drugs
The FDA issued a draft guidance on May 29 titled Oncology Pharmaceuticals: Streamlined Nonclinical Safety Studies for Biologics and Conjugated Products, proposing significant changes to the animal-testing requirements for cancer biologics and conjugated products.4
The core recommendations:
- Eliminate animal testing entirely when there is no binding or pharmacologic activity.
- Use rodent-only studies instead of two species where a second species adds no predictive value.
- Replace three-month non-human primate studies with a weight-of-evidence risk assessment, potentially incorporating New Approach Methodologies (NAMs).
FDA's Oncology Center of Excellence Director Angelo de Claro described the guidance as advancing "a more efficient drug development process" while fulfilling the agency's commitment to reduce animal use. The FDA directly links the proposals to cutting the estimated 10–12 year timeline from discovery to patient access.4
The guidance builds on the FDA's analysis of COVID-era practices that reduced non-human primate use and supplements existing ICH guidance. Public comments are due by July 30, 2026.
Three new drug approvals
| Drug (brand) | Active ingredient | Approved | Indication |
|---|---|---|---|
| Imfinzi + BCG | Durvalumab + BCG | May 28 | BCG-naïve high-risk non-muscle invasive bladder cancer (NMIBC) |
| Xocova | Ensitrelvir | May 29 | Post-exposure prophylaxis for COVID-19 |
| Zaynich | Cefepime + zidebactam | May 29 | Complicated UTIs including pyelonephritis |
Durvalumab (Imfinzi) + BCG received full approval for adult patients with BCG-naïve, high-risk NMIBC — the first time an immune checkpoint inhibitor has been integrated into frontline bladder cancer therapy alongside BCG.5 The approval is based on the POTOMAC trial (NCT03528694), in which the durvalumab + BCG arm achieved a statistically significant improvement in disease-free survival versus BCG alone (HR 0.68; 95% CI: 0.50–0.93; p=0.0154). The drug is marketed by AstraZeneca.
Xocova (ensitrelvir), approved for post-exposure COVID-19 prophylaxis, marks the first approved oral antiviral for this indication in the US.6
Zaynich (cefepime + zidebactam) adds a new combination beta-lactam/beta-lactamase inhibitor for complicated UTIs caused by susceptible organisms.6
FTC: Fertilizer antitrust probe, payment processor contempt sanctions
FTC confirms fertilizer industry investigation
FTC Chairman Andrew Ferguson confirmed on May 28 that the agency has been running a formal, industry-wide antitrust investigation into fertilizer pricing using civil investigative demands — the agency's compulsory process for obtaining documents and testimony.7
The investigation targets pricing practices and market concentration among major nitrogen-based fertilizer producers. Companies named in related reporting as under scrutiny include CF Industries, Nutrien, Mosaic, Koch Industries, and Yara International.7 None of the three domestic producers — CF Industries, Mosaic, or Nutrien — issued immediate comment.
The proximate catalyst is a war-related supply shock: since the Strait of Hormuz closed in late February 2026, urea prices have risen 55% and another major nitrogen fertilizer 33%, according to testimony submitted to a Senate agriculture committee by the Kentucky Farm Bureau.7 Ferguson said the "single largest increase in input costs since 2020 has come from fertilizer" and that the situation "cannot continue to be ignored."
What to watch: Whether the FTC issues formal subpoenas or complaint against any named company; any enforcement action would require the Commission to show price increases reflect anticompetitive conduct rather than supply constraints.
Cardflex hit with $6.5M in contempt sanctions
On May 13, a federal judge in the District of Nevada ordered Cardflex, a payment processor, to pay $6.5 million in civil contempt sanctions for allegedly violating a 2015 court order requiring the company to stop processing transactions for fraudulent merchants.8
According to the court's findings, Cardflex continued to process hundreds of millions of dollars in transactions for merchants not on its approved list — including merchants on Mastercard's MATCH high-risk watchlist — and helped them evade detection by processing "friendly" transactions to mask chargeback rates, facilitating name changes, and transferring transactions from closed to active accounts. The company also failed to conduct the due diligence, collect required business information, and file reports mandated by the 2015 order.
The FTC said the ruling "sends a clear message" that the agency will enforce its court orders and keep fighting fraud in US payment systems.
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What to watch next
- SEC climate rescission comment period: 60 days from Federal Register publication. Major financial institutions and ESG-focused investors are expected to mobilize comments.
- Nathan Fuller (S.D. Tex.): SEC has sought permanent injunctions, disgorgement, and civil penalties. No trial date set.
- FDA oncology animal testing guidance: Comment deadline July 30, 2026. Final guidance will set binding expectations for IND submissions.
- FTC fertilizer investigation: No public timeline disclosed. Civil investigative demands indicate the agency is in a document-gathering phase.
- Adani consent judgments (EDNY): Court entry still pending as of this publication.
- Musk Trust Twitter judgment: Final court entry still pending; entry triggers personal dismissal of Musk from the case.
References
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- 5FDA Approves Durvalumab and BCG for High-Risk NMIBC
oncnursingnews.com
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