Regulations
A number of companies running into trouble along these lines are bringing work back to the U.S. "Bottom line:" you're not going to get much business handling confidential information if people think your information isn't being kept confidential.
In other words, the market is already dealing with this problem.
Of course, this leaves Figueroa with one less regulation to whomp up.
Multiply that load of government micromanagement by the number of senators in California and you start to understand what it's like to do business here.