Some of the U.S. Securities and Exchange Commission's Dodd-Frankrules may face legal challenges after a federal appeals courtruling rejected an agency regulation on shareholder rights,analysts said.
The SEC rule written last year was meant to open company boardsto candidates pushed by major shareholders. The U.S. Court ofAppeals in Washington yesterday agreed with business groups thatthe rule shouldn't be implemented because the regulator didn'tproperly explore the costs of the change.
The requirement that the SEC do a full cost-benefit analysis onits rulemaking has been a trouble spot for the agency, which haslost several similar cases in the same court. Today's defeat comesas the SEC works on more than 100 rules it was assigned by theDodd-Frank overhaul enacted a year ago.
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