Coin Edition -
- Ripple Chief Legal Officer Stuart Alderoty calls out the SEC’s “troubling patterns”.
- The SEC laid out a new rule in May regarding stock buyback disclosure.
- The US Fifth Circuit believes that the SEC’s new regulation was arbitrary and capricious.
Ripple Chief Legal Officer Stuart Alderoty pointed out some “troubling patterns” of the U.S. Securities and Exchange Commission’s (SEC) Chair Gary Gensler on Wednesday. For context, Alderoty’s remark is in connection with the series of mishaps faced by the agency, including its legal losses against Ripple and Grayscale.
Alderoty highlighted that the Court found the SEC acted arbitrarily and capriciously. Moreover, he added, “Is anyone else concerned about this very troubling pattern of the SEC flouting any faithful allegiance to the law under Mr. Gensler?
Another day and another Court finds that the SEC again acted arbitrarily and capriciously. Is anyone else concerned about this very troubling pattern of the SEC flouting any faithful allegiance to law under Mr. Gensler? https://t.co/5bUgSBUOI8— Stuart Alderoty (@s_alderoty) November 1, 2023
Alderorty shares the same opinions as Coinbase’s Chief Legal Officer, Paul Grewal. Grewal noted the regulator’s slew of setbacks, from the District of Columbia Circuit in Grayscale to the Court of Appeals for the Fifth Circuit in “a challenge to its stock buyback disclosure rule.”
The SEC laid out a new regulation in May of this year, underscoring the vitality of enabling investors to assess the rationales behind share buyback data. As such, they required public organizations to declare them to the general populace.
Yet, the new rule has instigated a barrage of critics and, thereafter, a legal claim. According to the Fifth Circuit decision:
The SEC acted arbitrarily and capriciously in adopting the final rule by not considering their comments or conducting a proper cost-benefit analysis, and the SEC did not provide the public with a meaningful opportunity to comment.
Consecutively, the Court sided with the appellate on October 31, expressing that the SEC’s regulation on stock buyback disclosure was arbitrary and capricious. The decision gave the SEC 30 days “to correct the defects in the rule.
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