When Chaos Capitalism Meets Compliance
Don’t look now, but corporations and compliance teams already have yet another Trumpian trend tripping up your plans for 2026: chaos capitalism, as President Trump barks out new demands for mandatory overseas investment, price caps, price cuts, executive compensation, shareholder compensation, and lord only knows what’s next.
Seriously, who can even keep up with all this? Four days ago my plan for today’s post was to explore the implications of the United States toppling the government of Venezuela to take over its oil industry. We still need to consider those implications, because they’re huge — but Venezuela is already old news, washed away by a torrent of even more Trump tweets. Since Thursday alone, the president has…
- Tried to strong-arm the oil industry into investing $100 billion in Venezuela, promising the companies “total safety, total security.” When the head of Exxon Mobil noted that Venezuela is currently uninvestable no matter what, Trump promptly threatened to bar Exxon from doing business there.
- Tried to ban private equity firms and other investment firms from buying single-family homes, and called on Congress to enact legislation to ban corporate ownership of single-family homes permanently.
- Declared that interest rates on consumer credit cards would be capped at 10 percent for one year, starting Jan. 20. Bank stocks promptly tumbled on Wall Street on Monday.
- Said that “underperforming” defense contractors must redirect money they use for dividend payments and share buybacks to invest in manufacturing capabilities, and must cap CEO compensation at $5 million annually; or risk losing their contracts.
- Announced plans to meet with health insurance executives, where he will tell them to cut their prices for consumers. (Not to be confused with Trump’s previous demands that drug makers cut their prices too.)
All the above policy moves, affecting at least six major industries, have been announced in the last five days alone. And where does this regulatory mania leave corporate governance and compliance efforts?
In a really terrible position.
Compliance in a Time of Chaos
The fundamental question for compliance officers is, “What do all these directives mean for the compliance program I’m trying to run?”
The fundamental answer is that I don’t know. Neither do you. Nor does your outside counsel, nor the regulators whose job, supposedly, is to implement all these directives from Trump high command. Nobody knows what to do with these tweets, which is precisely the trend that’s going to drive us all nuts in 2026.
In normal times, an administration would announce plans for a new policy and then let individual agencies develop the details. There would be a proposal-and-comment process. A final rule would be put forth, possibly with a short speech from the president. Even if the rule were subsequently challenged in court, at least you and everyone else would see the rule coming from a long way off, and your compliance program could digest its implications in due course.
Trump has flipped that process on its ear. Now we start with the presidential proclamation rather than end with it, and regulators scramble to make existing regulations serve the president’s latest whim because he wants that new policy enforced RIGHT NOW, THANK YOU FOR YOUR ATTENTION TO THIS MATTER, as he might say in a tweet.
So as a practical matter, we’re going to see more regulation by enforcement. Pay especially close attention to the White House’s announcement last week of a new assistant attorney general for fraud, an immensely vague and ill-defined role that could allow the Justice Department to investigate pretty much any corporation for pretty much anything. This person will also answer directly to Trump and vice president JD Vance, which means he or she will be a hatchet man the president uses to target companies that don’t do his bidding, laws and regulations be damned.
Just as bad, we’re going to see more corporate governance by capitulation, where management teams just agree to do what the Administration wants, even if those demands run contrary to rule of law, common sense, and business objectives. How will that capitulation go over with your workforce? If senior management abandons its principles to score a quick deal with Trump, how long before employees start ignoring those principles for some quick score of their own?
The Strains This Will Introduce in Practice
Take that business with defense contractors. Can Trump simply declare that companies must stop issuing dividends and share buybacks? As a legal matter, probably not; it’s certainly worth challenging in court. But Trump could also now direct the Defense and Justice Departments to cook up fraud investigations against recalcitrant companies.
So how many boards will decide to stand firm, fight any such investigation, and exercise their fiduciary duties as they see fit and, let’s remember, as corporate law requires them to do? Or how many will simply can the dividend payments, fiduciary duties be damned, so they can keep those lucrative contracts? You tell me.
Closer to the heart of anti-corruption compliance offices, consider Trump’s insistence that oil companies re-enter Venezuela, one of the most desperate and corrupt countries on earth. We all know demands for bribes will be rampant, and oil companies won’t relish the FCPA exposure paying those bribes will bring.
Well, when Trump promises the oil companies, “total safety, total security,” what do you think he means? Physical security, sure; but also legal security from FCPA prosecution. He will say that FCPA offenses in Venezuela won’t be prosecuted because cultivating Venezuela’s oil industry is in the U.S. national interest.
What is a company with a supposed commitment to ethics and compliance supposed to do in that predicament? Ignore that commitment and go into a corrupt country per the president’s orders? Defy the president and risk his wrath? (See assistant attorney general for fraud, above, launching vindictive prosecutions.) Go into the country to the smallest extent possible, don’t pay the bribes, and just mope around there for cosmetic purposes to keep a confused, unfocused president distracted?
Again, I don’t have answers to these questions. I am merely sketching out the contours of the problem. The Trump Administration has abandoned the rule of law in favor of the rule of whim. That’s going to be hard on compliance officers, senior management, and corporate boards, who all need clear law and regulation to move forward.
And we’re only 12 days into 2026…