On October 1, in a memorandum that law firms from Skadden to Gibson Dunn to Jones Day scrambled to analyze within hours of its release, Assistant Attorney General Colin McDonald of the Department of Justice’s newly created National Fraud Enforcement Division issued Directive 26-12: “Corporate Enforcement in the Fight Against Fraud.” The memo was the most substantive signal yet of how this administration intends to prosecute corporate misconduct — and it landed with the force of a compliance earthquake.
The directive identifies four corporate fraud enforcement priorities: healthcare fraud, including controlled substance distribution and Federal Food, Drug, and Cosmetic Act violations; fraud involving the public trust — government contracts, procurement fraud, and offenses implicating national security and immigration; significant tax evasion; and, notably elevated for the first time to stand alongside the other three, tariff evasion, import fraud, and forced labor supply chain violations. Prosecutors in the National Fraud Enforcement Division are directed to take “an aggressive, all-tools approach” to these categories — while simultaneously being instructed to “firmly guard against overbroad corporate enforcement” and avoid interference with legitimate business operations.
That paired commitment — aggressive on the four priorities, restrained everywhere else — is the operative tension every general counsel in America will stress-test against their compliance infrastructure this month. And if Directive 26-12 alone was not enough to hold the attention of corporate legal departments, the week that followed produced two additional developments that together form the most consequential cluster of corporate law news in 2026: the Supreme Court’s decision to decline hearing challenges to the Corporate Transparency Act’s beneficial ownership registry, and a shareholder derivative suit against Super Micro Computer’s board for allegedly enabling AI chip exports to China in violation of federal export controls.
These three stories are not independent. They map, with unusual precision, onto the enforcement priorities that Directive 26-12 has now formally named.
Further Reading: The AI Inflection Point: How August 2026 Changed the Entire Industry’s Trajectory
Directive 26-12 and What It Actually Changes
The DOJ’s National Fraud Enforcement Division was created in August 2026, consolidating fraud enforcement functions previously distributed across multiple DOJ components. The August memo establishing the Division identified five overall priorities; the October 1 directive drills down specifically on corporate enforcement within those priorities and introduces structural changes that compliance professionals need to understand immediately.
The most significant structural innovation is the Corporate Enforcement Section, which under Directive 26-12 now assumes centralized authority over all Fraud Division investigations and prosecutions involving corporate entities. Division prosecutors opening a corporate investigation must report to the Corporate Enforcement Section chief. The CES is also responsible for evaluating companies’ compliance with the terms of any corporate criminal resolution — deferred prosecution agreements, non-prosecution agreements, and guilty pleas — after a matter is resolved. That ongoing oversight function is new and consequential: it means that companies that enter resolutions are not simply completing a transaction and moving on, but are operating under sustained scrutiny from a centralized unit with both the authority and the institutional incentive to document non-compliance.
The ten “must weigh” charging factors that Division prosecutors must apply when deciding whether to charge or resolve a corporate fraud case include: management’s knowledge of or involvement in the fraud; the pervasiveness of the misconduct; the company’s history; the company’s willingness to cooperate; the adequacy of its compliance program at the time of the misconduct; its remediation efforts; collateral consequences to innocent third parties; the adequacy of civil or regulatory alternatives; the interests of any individual victims; and the societal deterrence value of a prosecution. The list is not new in kind — these factors have appeared in various forms in DOJ guidance since the Holder Memo in 1999. What is new is their formalization within a dedicated corporate enforcement structure that, according to Gibson Dunn’s analysis, “continues to carve out a wider lane” for corporate accountability enforcement than any previous administration’s fraud division.
The follow-on Directive 26-13, issued October 8, goes further still, directing an “all angles” approach to fraud enforcement — early asset seizure, tax charges layered onto fraud counts, and general-deterrence-focused sentencing advocacy — with the Corporate Enforcement Section explicitly tasked to lead this charge. The two directives together constitute the most detailed public blueprint for corporate fraud prosecution strategy that the DOJ has issued in the modern era.
The Trade Fraud Escalation
The elevation of tariff evasion, import fraud, and forced labor supply chain violations to co-equal status with healthcare and government fraud is the single most commercially significant element of Directive 26-12 for companies engaged in global trade.
Before this directive, trade fraud was treated as a serious but secondary enforcement concern — pursued vigorously by Customs and Border Protection and the Commerce Department, but less prominently featured in DOJ corporate fraud practice. That status has changed. Husch Blackwell’s analysis, published October 11, notes that the DOJ’s Trade Fraud Task Force has recovered over $1 billion in the past year alone — and that the October memo formally signals that corporations engaged in importing, customs brokerage, or downstream distribution of imported goods are now operating in a priority enforcement environment comparable to pharmaceutical companies and government contractors.
The forced labor component deserves particular attention from multinational companies with complex supply chains. The Uyghur Forced Labor Prevention Act established a rebuttable presumption that goods manufactured in Xinjiang involve forced labor, shifting the burden to importers to prove otherwise. Combined with Directive 26-12’s explicit naming of forced labor as a prosecution priority, the compliance implication is direct: companies that have been managing Xinjiang supply chain exposure primarily as customs and trade risk now need to treat it as a potential criminal prosecution risk. The standard for what constitutes adequate supply chain diligence has, as of October 1, been raised by the seriousness of the consequences for getting it wrong.
The Corporate Transparency Act Survives Its Supreme Court Challenge
On October 5, the United States Supreme Court declined to hear two cases challenging the Corporate Transparency Act — the law requiring millions of small businesses and closely held entities to register their beneficial owners in a national database maintained by the Treasury Department’s Financial Crimes Enforcement Network.
The CTA has had a complicated procedural history. After a federal district court in Texas enjoined enforcement in late 2024, finding the statute exceeded congressional authority under the Commerce Clause, the Supreme Court stayed the injunction, and FinCEN resumed enforcement with a revised compliance deadline. The Court’s refusal to hear the challenges on the merits — reported by Law360 on October 5 — means the CTA remains in force, the beneficial ownership registry is operational, and the roughly 32 million entities that were initially estimated to be subject to reporting requirements need to comply or face civil and criminal penalties.
For corporate lawyers, the practical consequence of the Supreme Court’s refusal is finality — or something close to it. After nearly two years of uncertainty over whether the CTA would survive a constitutional challenge, the reporting obligation is now on solid legal ground. FinCEN’s enforcement posture has been building throughout 2026, and Directive 26-12’s public trust fraud priority explicitly encompasses government programs. Companies and their legal advisors that have been treating CTA compliance as a low-urgency matter pending the constitutional resolution should treat the October 5 Supreme Court action as the signal to complete their beneficial ownership filings without further delay.
Super Micro and the AI Export Controls Liability Frontier
The same week that Directive 26-12 was issued and the Supreme Court cleared the CTA’s path, a shareholder filed a derivative suit against Super Micro Computer’s board of directors and officers in California federal court, alleging that the board had enabled an alleged scheme to export AI chips and technology to Chinese entities in violation of federal export controls — while misleading investors about the company’s compliance posture.
The Super Micro derivative suit, reported by Law360 on October 16, is one of the clearest illustrations yet of how AI export control enforcement is migrating from a regulatory compliance matter into a corporate governance and securities law matter simultaneously. Under the derivative suit theory, it is not the government alleging that Super Micro violated export controls — it is the company’s own shareholders alleging that the board’s failure to prevent or disclose those violations damaged the company itself.
That framing matters for corporate governance across the AI sector. The BIS export control regime for advanced semiconductors, established through a series of Commerce Department rules since 2022 and significantly tightened in 2023 and 2025, requires companies to implement robust end-user verification processes, red flag screening, and internal compliance infrastructure. For companies at the center of the AI hardware supply chain — chip manufacturers, cloud infrastructure providers, and enterprise software companies with hardware partnerships — the Super Micro suit puts corporate directors on notice that inadequate oversight of export control compliance is not simply a regulatory risk. It is a board-level governance failure that can generate personal liability through derivative litigation even when the government has not yet pursued charges.
The alignment between this development and Directive 26-12’s national security priority area is not subtle. The directive explicitly names national security offenses as a factor prosecutors must weigh heavily in corporate charging decisions. AI chip exports to Chinese entities in violation of the BIS rules are, on their face, a national security matter. The combination of a civil derivative suit against the board and a DOJ fraud enforcement framework that treats national security violations as a priority category means that Super Micro, and every similarly situated company in the AI supply chain, is now navigating liability exposure from two directions simultaneously.
What General Counsels Need to Do Before Year-End
The three October developments — Directive 26-12, the CTA Supreme Court outcome, and the Super Micro derivative suit — collectively define a compliance agenda for the remainder of 2026 that is unusually specific.
On the DOJ directive, the immediate priority for companies operating in any of the four named priority areas — healthcare, government contracting, high-volume importing, or AI and advanced technology with export control implications — is a compliance program audit benchmarked against the directive’s ten charging factors. The directive itself functions as a roadmap: it tells you exactly what prosecutors will evaluate when deciding whether to charge your company, which means you can read it as a prioritized list of compliance program elements to strengthen.
On the CTA, any entity that has been deferring beneficial ownership reporting while awaiting Supreme Court resolution should file without further delay. FinCEN’s revised deadlines are running, civil penalties of $591 per day are accumulating for non-compliant entities, and criminal penalties for willful violations include fines and imprisonment.
On AI export controls, board-level governance needs to catch up to the compliance function. As the broader AI regulatory landscape continues to fragment across state, federal, and international jurisdictions, boards that have treated AI compliance as an engineering and operations matter rather than a governance one are accumulating exactly the kind of oversight gap that derivative suits exploit.
The October memo’s paired commitment — “zealously prosecute” and “firmly guard against overbroad enforcement” — is not a contradiction. It is a precision instrument. The administration is telling companies exactly where the targets are. Acting on that signal before a grand jury does is the most cost-effective compliance investment available this quarter.
Further Reading: The Bond Market Warning Nobody on Wall Street Wants to Hear
External Sources: Jones Day: DOJ Announces New Corporate Fraud Priorities and Whistleblower Incentive Programs (October 2026) | WSGR: DOJ Unveils New Corporate Fraud Enforcement Priorities and 10 “Must Weigh” Charging Factors | Gibson Dunn: DOJ Fraud Division Issues Corporate Enforcement Directive | Skadden: DOJ Fraud Division Rolls Out New Corporate Enforcement Framework (October 2026) | BakerLaw: DOJ Announces Corporate Fraud Enforcement Priorities — Companies Take Note | Husch Blackwell: DOJ Doubles Down on Trade Fraud Enforcement (October 2026) | Paul Weiss: DOJ’s NFED Announces New Guidance on Corporate Fraud Prosecutions | Forbes / Mag Law: DOJ Issues Corporate Enforcement Directive (October 16, 2026) | Government Enforcement Report: DOJ NFED Issues Corporate Enforcement Priorities Memo (October 14, 2026) | Mondaq: Justice Department Issues Memorandum Outlining Corporate Fraud Enforcement Priorities (October 14, 2026)