Washington D.C.- Following a decision granting the National Manufacturers Association’s motion for summary judgment in NAM versus SEC and rescinding the Securities and Exchange Commission’s illegal suspension of its duly enacted proxy advisory firm rule, NAM’s Chief Legal Officer, Linda Kelly, issued the following statement:
“Today’s decision is a victory for the rule of law, and the NAM Legal Center was proud to lead this effort for the industry. Federal agencies are bound by the Administrative Procedure Act — standards the SEC failed to meet by indefinitely delaying the compliance date for the 2020 proxy firm rule without developing notice-and-comment rules. Manufacturers depend on regulators to enact and enforce reliable rules of conduct, and NAM looks forward to holding the SEC similarly accountable in our ongoing case against the agency’s unlawful overturning of the 2020 rule. »
NAM has long called for increased oversight of proxy advisory firms. In July 2020, the SEC released final rule to improve transparency and accountability for proxy firms, a move that NAM Chairman and CEO Jay Timmons called “a major and long-sought win for the industry.” industry and millions of manufacturing workers. In October 2020, NAM filed a motion to intervene in ISS versus SEC (ISS attempt to overturn the rule) in support of these reforms.
In June 2021, the SEC announced that it was suspending the application of the 2020 rule; NAM filed a lawsuit against the SEC in October 2021 to challenge this unlawful suspension. The U.S. District Court for the Western District of Texas today issued an opinion granting NAM’s motion for summary judgment and reversing the SEC’s stay of the rule. As the court explained, “[Agencies] do not have the inherent power to suspend or delay a final rule in the absence of notice and comment rulemaking.
In July 2022, the SEC overturned critical portions of the 2020 rule, a decision that Timmons said “embodies ‘arbitrary and capricious’ rulemaking.” NAM sued to challenge the cancellation; a summary judgment hearing at NAM versus SEC is scheduled for December 9, 2022.
The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in all industry sectors and in all 50 states. The manufacturing sector employs more than 12.8 million men and women, contributes $2.77 trillion annually to the US economy, and accounts for 58% of private sector research and development. NAM is the powerful voice of the manufacturing community and the primary advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about NAM or to follow us on Twitter and Facebook, please visit www.nam.org.