Today, the Chamber of Commerce and Business Roundtable announced that they had filed a legal challenge to the SEC’s recently adopted Proxy Access Rules. The rules, which generally require a company to include a shareholder nominee from certain qualifying shareholders, are being challenged on several grounds. The petition for review alleges that the rules are arbitrary and capricious and violate the Administrative Procedure Act, that the SEC failed to properly assess the rules’" effects on ‘efficiency, competition and capital formation,’ as required by law,” and that the rules infringe upon issuers' rights under First and Fifth Amendments to the U.S. Constitution, in that the rule is a “taking of corporate property because it forces companies to fund and carry election-related speech that is opposed by a company’s duly-elected board of directors."
The Chamber of Commerce and the Business Roundtable have asked the SEC to stay the rules, including their November 15, 2010 effective date, pending the conclusion of litigation. If the SEC does not grant a stay by October 5, the petitoners state that they intend to file a motion for a stay with the court.