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David Fagan

David Fagan co-chairs the firm’s top ranked practice on cross-border investment and national security matters, including reviews conducted by the Committee on Foreign Investment in the United States (CFIUS), and is a partner in the firm’s data privacy and cybersecurity practice.

David has been recognized by Chambers USA and Chambers Global for his leading expertise on bet-the-company CFIUS matters and has received multiple accolades for his work in this area, including being named The American Lawyer’s Dealmaker of the Year three times. His work includes successfully securing three of the four Presidential approvals in the history of CFIUS; securing the only Presidential order protecting a client against a proposed hostile takeover; and negotiating the only “golden share” the U.S. government has taken in a U.S. company. Clients laud him for “[seeing] far more matters than many other lawyers,” his “incredible insight,” and “know[ing] how to structure deals to facilitate regulatory reviews” (Chambers USA).

For more than two decades, David has handled transactions for clients across every sector subject to CFIUS review, including some of the most sensitive and complex matters that have set the template for CFIUS compliance and security agreements in their respective industries. He is also routinely called upon to rescue transactions that encounter challenges in CFIUS; provide strategic counsel to clients on navigating and addressing U.S. national security considerations in commercial transactions; and negotiate solutions with the U.S. government, including equity arrangements, that protect national security interests while preserving shareholder value and U.S. business interests.

In the enforcement area, David has represented clients in numerous enforcement actions pursued by CFIUS, including two of the three largest penalty cases resolved with CFIUS.

Reflecting his experience on complex U.S. national security matters intersecting with China, David is regularly engaged by the world’s leading multinational companies to advise on emerging legal issues, including outbound investment restrictions and regulations governing information and communications technologies and services (ICTS), as well as strategic legal projects related to the evolving U.S.-China competitive landscape. 

In addition, in the foreign investment and national security area, David routinely advises clients on matters requiring mitigation of foreign ownership, control, or influence (FOCI) under applicable national industrial security regulations. His work includes advising many of the world’s leading aerospace and defense companies and private equity firms, as well as telecommunications transactions subject to public safety, law enforcement, and national security review by Team Telecom.

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On January 29, 2024, the Department of Commerce (“Department”) published a proposed rule (“Proposed Rule”) to require providers and foreign resellers of U.S. Infrastructure-as-a-Service (“IaaS”) products to (i) verify the identity of their foreign customers and (ii) notify the Department when a foreign person transacts with that provider or reseller to train a large artificial intelligence (“AI”) model with potential capabilities that could be used in malicious cyber-enabled activity. The proposed rule also contemplates that the Department may impose special measures to be undertaken by U.S. IaaS providers to deter foreign malicious cyber actors’ use of U.S. IaaS products.  The accompanying request for comments has a deadline of April 29, 2024.

The Proposed Rule would effectuate many of the requirements laid out in the Executive Order on Taking Additional Steps to Address the National Emergency with Respect to Significant Malicious Cyber-Enabled Activities (“E.O. 13984”).  E.O. 13984, issued three years prior to the Proposed Rule, set in motion requirements for IaaS providers to enact certain customer identity verification procedures and take special measures to prevent their services from being used by foreign actors for malicious cyber-enabled activities.  The AI provisions of the Proposed Rule stem from the more recent Executive Order on Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence (“E.O. 14110″), issued on October 30, 2023, which directed the Department to propose regulations for U.S. IaaS providers to (i) submit reports to the Department when a customer transacts with the provider to train an AI model that could be used for malicious cyber-enabled activities and (ii) ensure foreign resellers of IaaS products also conduct identity verification of foreign account holders.

The proposed regulations are further explained and summarized below:

Continue Reading Department of Commerce Issues Proposed Rule to Regulate Infrastructure-as-a-Service Providers and Resellers

On March 21, 2023, the Department of Commerce (“Commerce”) published a Notice of Proposed Rulemaking (the “Commerce Proposed Rule”) to implement certain provisions of the CHIPS and Science Act of 2022 (“CHIPS Act”) that place restrictions on certain activities of businesses receiving federal funding pursuant to the CHIPS Act (“Commerce Guardrails”).  On the same day, the Department of the Treasury (“Treasury”) also published a Notice of Proposed Rulemaking (together with the Commerce Proposed Rule, the “Proposed Rules”) to implement the Advanced Manufacturing Investment Credit (“ITC”), including its own restrictions on certain activities that, in broad strokes, parallel the Commerce Guardrails (together with Commerce Guardrails, “CHIPS Guardrails”) (Covington alert).  

Continue Reading National Security Update – Departments of Commerce and Treasury Release Notice of Proposed Rulemaking Regarding CHIPS “Guardrails”

As the Senate approaches the end of its debate on the National Defense Authorization Act for Fiscal Year 2019, provisions of the bill regarding access to and review of information technology code deserve close attention.  These sections, if enacted, would significantly impact Department of Defense contractors and also would affect matters associated with investments subject to review by U.S. national security agencies.

As drafted, the provisions could expose current and prospective contractors to intrusive scrutiny and significant risks.  They lack clarity on key definitions, leaving the precise scope of those risks unclear.  We summarize major issues and concerns below.  We expect these provisions to receive scrutiny during the House-Senate conference on the NDAA over the summer. 
Continue Reading Senate Armed Services Committee Proposes Expansive but Unclear Software Review Provisions