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March 30 — The Securities and Exchange Commission has spent more than 20,000 employment hours and more than $2.5 million to implement and defend the conflict minerals rule in court.
Approximately 17,000 hours were spent on the Rule 13p-1 rulemaking, which cost approximately $2.1 million, and the litigation used about 4,000 hours and cost $520,000, SEC Chairman Mary Jo White said in a March 16 letter to members of the House Financial Services Committee. The rule, which has been invalidated, is mandated by Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The letter was in response to a request from several Republican committee members, including Chairman Jeb Hensarling (Texas) and Rep. Bill Huizenga (Mich.).
Huizenga, who chairs the Monetary Policy Subcommittee, mentioned the figures at a March 24 hearing at which White testified.
The SEC's figures were estimates because the agency staff “did not track and record their time for this project,” the letter states. Instead, the agency “asked current staff to provide their best estimates” of hours worked on the rulemaking and the litigation.
The figures don't include time spent by commissioners.
In April 2014, the U.S. Court of Appeals for the District of Columbia held that the SEC's rule violated the First Amendment. The SEC petitioned the D.C. Circuit panel in December to rehear the case, based on new case law in the intervening months.
The rule requires companies and foreign issuers in the U.S. to report using “conflict minerals” if they are necessary to a product the companies make. Conflict minerals include gold, tantalum, tin and tungsten from the Democratic Republic of Congo and neighboring countries.
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