Client Alert

Last month’s ruling by the U.S. Court of Appeals for the District of Columbia Circuit in the closely watched case of Business Roundtable v. SEC not only overturned the landmark Securities and Exchange Commission shareholder proxy access rule, but also created a potential roadmap for businesses and industry groups seeking to challenge many other rules to be issued by the SEC and other federal regulators under the Dodd-Frank Wall Street Reform and Consumer Protection Act. In holding that the SEC acted “arbitrarily and capriciously” and failed to adequately assess the economic effects of the new proxy access rule, the Court put the SEC and other regulators on notice that future rulemaking by the agencies must meet a much higher standard with respect to cost-benefit analysis and justification.

 

Businesses and industry groups have been quick to seize on the Court’s holding as a basis for challenging other Dodd-Frank rulemaking by the SEC and the Commodity Futures Trading Commission – especially those rules that received considerably less cost-benefit analysis than the proxy access rule. Observers believe that controversial rules such as the new SEC conflict minerals disclosure rules, compensation disclosure rules and whistleblower rules may be particularly vulnerable to a challenge along the same lines as the SEC’s proxy access rule.

 

Click here to read our client alert discussing these recent developments (printable PDF).

 

Contact Information: If you have any questions regarding these issues, please contact either the Womble Carlyle attorney with whom you usually work or one of our Corporate and Securities attorneys or one of our Labor and Employment attorneys.