August 9, 2022

Volume XII, Number 221

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August 08, 2022

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Republican SEC Commissioner Peirce Objects to SEC Regulatory Agenda

On June 22, 2022, in response to the SEC's release of its regulatory agenda , Republican SEC Commissioner Hester M. Peirce vigorously objected to the policies and regulatory goals announced by the Biden Administration's SEC.  In short, her main objection to the recent rules proposed by Chairman Gensler and the SEC is that these proposals "shun issues at the core of our mission in favor of shiny objects outside our jurisdiction."  In other words, Commissioner Peirce seeks to rein in the expansive regulatory agenda recently pursued by the SEC, which has most notably included its proposed mandatory climate disclosures and thus, in effect, a foray into environmental regulation.  

But Commissioner Peirce's objections are not limited to a critique of particular proposed rules.  (That said, she has certainly voiced significant criticism about the efforts of the SEC in the ESG space. Another proposed rule targeted by her critique is the SEC's recent proposal for "rule amendments to enhance registrant disclosures about the diversity of board members and nominees.")  Commissioner Peirce also seeks to decrease the total number of rules proposed by the SEC, and to generally slow the pace of rule-making.  In particular, she stated "3-5 rule proposals per month is not consistent with affording the public time to thoughtfully consider (let alone cogently common on) [] such changes," and she characterized the SEC's recent activities by saying the "rush of radical rulemakings remains relentless."  

This statement by the lone Republican SEC Commissioner is significant for several reasons beyond its immediate impact.  Most importantly, it affords insight into how the SEC might shift its focus and shape its regulatory agenda under a Republican administration.  It also previews likely political and legal objections to these rulemaking proposals, which may prefigure arguments in the courts that will seek to block or disrupt these new rules.  Finally, this statement telegraphs dissent among the SEC Commissioners, which will likely encourage outside efforts to compel the SEC to adjust its current regulatory agenda. 

"The Agenda continues to shun issues at the core of our mission in favor of shiny objects outside our jurisdiction. We used to focus on companies’ disclosure of economically material information; we now focus on disclosure of hot-button matters outside our remit.[3] We once sought to protect retail investors; we now rush to the aid of professional investors.[4] We once worked to help small and emerging companies raise the funds that are their lifeblood; we now work to increase their costs and shrink their investor base.[5] We once hoped to increase the ranks of public companies by making it less costly and more beneficial to be public; we now look for ways to force companies to go public[6] since we are making it costlier to go public and be public.[7]"

©1994-2022 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume XII, Number 175
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About this Author

Jacob Hupart Commercial Attorney Litigation Mintz Levin Cohn Ferris Glovsky and Popeo PC
Member

Jacob has a multifaceted litigation practice that encompasses complex commercial litigation, including cases involving securities, employment, and environmental claims, as well as class action litigation, white-collar criminal defense, and regulatory investigations. He has extensive experience handling all phases of litigation before federal and state courts, managing discovery, and conducting settlement negotiations. Jacob has represented clients in a variety of industries, including financial services, energy, education, and the media.

Prior to joining Mintz, he was an associate...

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