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By Cameron Finch
Jan. 4 — The Securities and Exchange Commission won its bid Jan. 4 to dismiss a lawsuit seeking to force it to adopt a rule requiring publicly traded companies to disclose political contributions.
Plaintiff Stephen Silberstein can't show that the SEC's failure to respond to his petition for rulemaking violated a “clear legal duty,” Judge Rosemary Collyer of the U.S. District Court for the District of Columbia held. In addition, she stated, the district court doesn't have jurisdiction to consider the issue, which is better left for a federal appeals court to decide.
Following the U.S. Supreme Court's decision in Citizens United v. FEC, 588 U.S. 310 (2010), which allowed companies to spend unlimited corporate funds on political contributions, the Committee on Disclosure of Corporate Political Spending submitted a petition to the SEC seeking corporate disclosure regulations (153 SLD, 8/9/11). In 2013, the SEC announced that it would be considering whether to propose a rule requiring corporate disclosure of political contributions (06 SLD, 1/9/13). The rule never came about.
In May 2014, the plaintiff and non-profit watchdog, Citizens for Responsibility and Ethics in Washington, submitted an amended petition for rulemaking based on the 2011 petition (76 SLD, 4/21/14). When the SEC didn't respond to Silberstein's petition, he filed a complaint under the Administrative Procedure Act alleging that the SEC's refusal to initiate the rulemaking was “arbitrary” and “capricious” (93 SLD, 5/14/15).
The district court dismissed the complaint stating that it lacked jurisdiction to compel the SEC to respond to the plaintiff's petition. Collyer also said that Silberstein's claim is invalid under APA requirements because the SEC didn't deny his petition, it only failed to respond which is “simply the omission of an action.”
The SEC declined to comment.
Silberstein was represented by Campaign for Accountability, Washington.
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