Fifth Circuit Grants Stay on CTA Injunction

On Dec. 9, 2024, we reported with an update following the issuance of FinCEN’s guidance on the injunction indicating it would comply so long as it is in force. Today, Dec. 23, 2024, the United States Court of Appeals for the Fifth Circuit has granted the government’s emergency motion seeking a temporary stay of the Eastern District of Texas Court’s order and injunction pending appeal, which means all deadlines which were applicable prior to the injunction are enforceable. The stay does not address the CTA’s constitutionality as applied to the First and Fourth Amendment claims. It has been further ordered by the Court of Appeals that the appeal is now expedited to the next available oral argument panel.

Furthermore, FinCEN has not issued guidance on whether a grace period will be in place for reporting companies with a January 1, 2025 deadline, or the 30- and 90-day post-formation deadlines, to file their beneficial ownership information report so reporting companies should act accordingly. We will continue to monitor the developments of this case. 

What this means for reporting companies? FinCEN has not yet issued a statement on the updated procedural requirements following the stay on the injunction, but we expect to see guidance on this soon. We recommend clients to prepare for beneficial ownership information report filings pending the issuance of formal guidance from FinCEN. 

Please reach out to the Brown Rudnick CTA Task Force with any questions.

Rod Moss, rmoss@brownrudnick.com, 202‐536‐1712

Morgan Jones, mjones@brownrudnick.com, 212‐209‐4813

Rachel Moroknek, rmoroknek@brownrudnick.com, 617‐856‐8339

Nicole Baek, nbaek@brownrudnick.com, 202‐536‐1759