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SEC has taken another loss in court, with the Court of Appeals for the Fifth Circuit ruling against the agency in its legal battle with the National Association of Manufacturers. Under Gary Gensler’s command, the SEC attempted to suspend a 2020 rule targeting proxy advisory firms, but the court has termed this a breach of the federal regulatory guidelines. Since taking over as the new SEC tsar, Gary Gensler has waged dozens of legal battles against private companies, winning some and losing others. However, in recent times, he has been taking one loss after another, many of them high-profile, as the tide continues to turn against him. The latest loss has ruled out his attempt to drop a 2020 rule that extended the SEC’s reach to proxy advisory firms. It all started in July 2020 when the SEC, then under the stewardship of former chair Jay Clayton, expanded its oversight to proxy advisory firms. These companies gather information about board proposals and guide shareholders in the voting process. This makes them a critical cog of the capital market as they influence the direction any public company takes. Naturally, the SEC felt it needed to oversee these firms to prevent manipulation, and in 2020, it got the federal authority to police them. Then came Gensler. Immediately after he took over, he directed his staff to re-examine the 2020 rule and sought to rescind it. Legal battles followed, with the National Association of Manufacturers leading efforts to prevent the SEC from relinquishing its oversight of the sector. NAM and the SEC have been locked in a legal battle since, going all the way to the US Court of Appeals for the Fifth Circuit. This week, the New Orleans-based court ruled against the SEC, handing Gensler yet another high-profile loss. Another court slams…

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Filed under: News - @ June 29, 2024 10:08 am