7.21.2009 The U.S. Court of Appeals for the District of Columbia Circuit issued its opinion in American Equity Investment Life Insurance Company, et al. v. Securities and Exchange Commission, No. 09-1021 (D.C. Cir. July 21, 2009), which challenged the validity of Rule 151A under the Securities Act of 1933 (1933 Act). The court held that the SEC’s interpretation of the term annuity contract, which effectively excludes fixed indexed annuities from the exemption in § 3(a)(8) of the 1933 Act, was reasonable. However, the court remanded for further analysis of the effect of Rule 151A on efficiency, competition and capital formation, pursuant to § 2(b) of the 1933 Act. The court found that the SEC’s consideration of Rule 151A’s effect on efficiency, competition and capital formation was arbitrary and capricious. The decision of the three-judge panel was unanimous.

Click http://sutherland-news.com/ve/ZZ587059977272627171i615/stype=dload/OID=60972220384229/VT=0 to access a Sutherland Legal Alert discussing the court’s holding.