- A court in the U.S. has slammed the SEC in an appeal against NAM.
- The court blamed Gary Gensler for directing an illegal move.
- The latest judgment against the SEC triggers hope among Ripple supporters.
A U.S. court has ruled against the Securities and Exchange Commission declaring that the agency unlawfully rescinded a rule on proxy advisory firms without adhering to the Administrative Procedure Act.
This decision, highlighted by Ripple’s Chief Legal Officer on a post on X (formerly Twitter), has drawn attention to the SEC Chair Gary Gensler’s involvement in the matter and could have implications for Ripple’s ongoing legal battle with the agency.
For context, the judgment pertains to an appeal in the case between the SEC and the U.S. National Association of Manufacturers (NAM). The case spanned several years, culminating in February when the D.C. District Court ruled that the SEC’s rules regarding proxy advisory firms were invalid.
The court stated that the “SEC acted contrary to law and in excess of statutory authority when it amended the proxy rules’ definition of ‘solicit’ and ‘solicitation’ to include proxy voting advice for a fee.” Both NAM and the SEC appealed the judgment, with NAM submitting its filing on April 16, one week before the SEC’s appeal.
A section of the judgment shared by Alderoty showed that the rule in question never took effect, noting that the SEC rescinded it in November 2021, one month before proxy firms were required to comply with the notice-and-awareness conditions.
The judgment further noted that the rescission process began after Gensler assumed his role as SEC chair. It highlighted that Gensler directed his staff to reconsider the 2020 rule, leading to its temporary suspension.
Notably, the latest judgment adds to a growing list of defeats the SEC has faced in the courts. Such defeats could bolster Ripple supporters’ hope for a favorable outcome in the ongoing case between the firm and the SEC. They may infer that the SEC, under Gensler, has developed a pattern of disregarding established rules.
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