SEC Buyback Regulation Ruled “Unlawful”
Posted on 12/21/2023
The SEC’s regulations on buybacks for U.S. and foreign entities were denied by a quorum in a U.S. Court of Appeals. The SEC was seeking to increase reporting data on buybacks on a quarterly basis and enforce other rules, but the court required a cost-benefit analysis. Instead of providing it, the court said: “The agency has nothing to show for its efforts. It returns to this court empty-handed.” In a parting shot the court said: “The rule remains no less flawed—and no less unlawful—than it was,” and “The SEC acted arbitrarily and capriciously . . . The challenged rule is VACATED.”
U.S. Chamber of Commerce President and CEO Suzanne P. Clark put out a statement on the news: “The Fifth Circuit’s decision on buybacks is a big win for American businesses, investors, and retirees over government micromanagement. The court’s decision to vacate this rule underscores a much deeper problem as the SEC rushes to adopt a slew of ideologically driven rules: a failure to even consider the cost and impact these regulations will have on companies, U.S. capital markets, and investors. The Chamber is hopeful that the court’s decision will cause the SEC to take pause before it attempts to move forward on its more far-reaching and aggressive agenda.”
