BUSINESS ROUNDTABLE and CHAMBER
OF COMMERCE OF THE UNITED STATES
OF AMERICA,
Petitioners,
v.
UNITED STATES
SECURITITIES AND EXCHANGE
COMMISSION,
Respondent.
http://www.uschamber.com/...
SECURITIES AND EXCHANGE COMMISSION
FACILITATING SHAREHOLDER DIRECTOR NOMINATIONS; FINAL RULE
Release Nos. 31-9136; 34-62764; IC-29384; File No. S7-10-09
RIN 3235-AK27
75 Fed. Reg. 56,668(Sept. 16, 2010)
MOTION FOR STAY OF PROXY ACCESS RULES BY
BUSINESS ROUNDTABLE AND
CHAMBER OF COMMERCE OF THE UNITED STATES OF AMERICA
.... Dated September 29, 2010
Respectfully submitted,
Eugene Scalia, Counsel of Record
GIBSON, DUNN & CRUTCHER LLP...
The Roundtable, according to the Chamber:
Business Roundtable is an association of chief executive officers of leading U.S. companies with nearly $6 trillion in annual revenues and more than 12 million employees. Member companies comprise nearly a third of the total value of the U.S. stock markets and pay more than 60 percent of all corporate income taxes paid to the federal government. Annually, they pay more than $167 billion in dividends to shareholders and the economy.
http://www.uschamber.com/...
The Chamber and BRT object to the new rule because it empowers unions and other special interests, such as labor union pension funds and state pension funds, asserting that that the rule imposes unjustified costs and empowers unions and other special interest shareholders at the expense of regular investors.:
.... objecting to new proxy access rules for nominating corporate directors.
The Chamber and BRT argue that Capricious and arbitrary rules that would empower "unions and other special interests at the expense of 'regular' investors."
The SEC adopted the final rules on Aug. 25 in a 3-2 vote. The rules require companies to include the nominees of "significant, long-term shareholders" in their proxy materials, alongside the nominees of management, according to the SEC. "This ‘proxy access’ is designed to facilitate the ability of shareholders to exercise their traditional rights under state law to nominate and elect members to company boards of directors."
The suit, filed in the U.S. Court of Appeals for the D.C. Circuit, claims the rules are unlawful under the Investment Company Act, the Securities Exchange Act and the Administrative Procedure Act, as well as violating issuers’ rights under the First and Fifth Amendments.
Gibson Dunn & Crutcher partners Eugene Scalia and Amy Goodman are representing the petitioners.
http://legaltimes.typepad.com/...
Furthermore, the offended parties argue that the rule is "capricious" and "arbitrary," that it violates procedure, is costly and inefficient:
In a petition for review filed in the U.S. Court of Appeals for the District of Columbia Circuit, the Chamber and Business Roundtable charge that the rule is arbitrary and capricious, violates the Administrative Procedure Act, and that the SEC failed to properly assess the rule’s effects on "efficiency, competition and capital formation" as required by law. In adopting the rule, the SEC:
* Erred in appraising the costs that proxy access would impose on American corporations, shareholders, and workers at a time our economy can least afford it. For example, the Commission essentially disregarded numerous commenters who explained that the rule will be misused by special interest investors such as labor union pension funds and state pension funds;
* Ignored evidence and studies highlighting the adverse consequences of proxy access, including that activist shareholders would use the rule as leverage to further their special interest agendas;
* Claimed to be empowering shareholders, but actually restricted shareholders’ ability to prevent special interest shareholders from triggering costly election contests; and
* Claimed to be effectuating state law rights, but gave short shrift to existing state laws regarding access to the proxy and related principles, including the law in Delaware and the Model Business Corporation Act, and created significant ambiguities regarding the application of federal and state law to the nomination and election process.
http://www.uschamber.com/...
Considering the wealth and collective power of the Chamber and BRT, the SEC appears to be a feeble David opposing a mighty Goliath. Rumor has it, however, that the SEC is well-positioned in this particular battle of the oppressive mighty against the people, a classic example of Class Warfare.