As a researcher with experience in the crypto industry and regulatory compliance, I find Stuart Alderoty’s recent statement against SEC Chairman Gary Gensler both intriguing and concerning. The court decision regarding the rescinded rule on proxy advisory firms is yet another example of what seems to be overreach by the SEC under Gensler’s leadership.
In a fiery public remark today, Ripple‘s Chief Legal Officer (CLO), Stuart Alderoty, lambasted SEC Chairman Gary Gensler after a recent court ruling. According to Alderoty, this decision served as an example of excessive regulatory intervention. He pointed out that the US Securities and Exchange Commission (SEC), under Gensler’s leadership, illegally revoked a rule pertaining to proxy advisory firms – an action that did not adhere to the Administrative Procedure Act.
Ripple CLO Celebrates The Latest Defeat For Gensler
As a crypto investor following the latest developments in the securities industry, I’m excited to share some recent news. A federal court has ruled against the Securities and Exchange Commission (SEC) in the case of National Association of Manufacturers v. SEC. The reason for their decision? The SEC allegedly violated the Administrative Procedure Act by unlawfully rescinding a rule regarding proxy advisory firms without following proper procedures. According to the court’s findings, SEC Chairman Gary Gensler personally directed this infringement.
The Head of Legal at Ripple posted a snapshot of the decision’s timeline from the ruling, indicating that the SEC revoked the rule in November 2021. The process for rescinding it started shortly after Gary Gensler assumed the role as the new chairman in June 2021. He instructed his team to reevaluate the 2020 Rule and halted its enforcement in the interim.
The 5th US Circuit Court of Appeals’ ruling overturned the Securities and Exchange Commission (SEC)’s revocation of the 2020 rules, enacted during the Trump administration to foster transparency and accountability in proxy voting advice. In a unanimous decision, the court deemed the SEC’s procedure for rescinding these regulations as “arbitrary and capricious, rendering it unlawful.” The judges were particularly displeased with the SEC for failing to provide sufficient justification for its reversal of the rules.
In this court ruling, the focus is on regulations that necessitate proxy firms such as Institutional Shareholder Services and Glass Lewis to inform companies concurrently with their clients about their proposed voting recommendations. Moreover, these rules mandate providing a channel for corporations to react. The intention behind these guidelines was to boost transparency and ensure fairness during the proxy voting process, which is an essential aspect of corporate governance.
In his statement released in June 2021, SEC Chairman Gensler defended the rollback of the proxy voting advice rules, explaining that it aimed to enhance “the promptness and impartiality of proxy voting recommendations, thereby safeguarding investors and supporting shareholder democracy.” However, the recent court ruling has raised concerns about the SEC’s approach to implementing this rule change, specifically in relation to adhering to proper procedures and providing a solid rationale.
As a seasoned crypto investor, I’ve noticed that the Securities and Exchange Commission (SEC) is carefully considering their response to the recent court decision that went against them. An SEC spokesperson has confirmed this, stating that they are assessing their options in light of the judicial rebuke. This ruling adds to the growing list of instances where regulatory actions spearheaded by Chairman Gensler have been challenged and overturned. The US crypto industry and Ripple, among others, can relate to this experience.
Yesterday, Brad Garlinghouse, Ripple’s Chief Executive Officer, criticized SEC chairman Gary Gensler through a tweet, following his recent interview where he discussed the latest court rulings. Garlinghouse stated, “Gary Gensler: A friendly reminder, the courts aren’t ‘adjusting’ their decisions – they are upholding the law by limiting your overreach of statutory authority.”
At press time, XRP traded at $0.47244.
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2024-06-27 23:11