SALT LAKE CITY, UTAH – Today, Attorney General Sean D. Reyes led a coalition of States in filing an amicus brief in U.S. Chamber of Commerce v. SEC. The coalition of attorneys general filed the brief in the U.S. Court of Appeals for the Fifth Circuit in support of the U.S. Chamber’s challenge to the SEC’s recent rule imposing burdensome new disclosure requirements for stock buybacks.
Stock buybacks are an essential way companies return excess cash to shareholders. Research has found that buybacks save investors hundreds of millions annually by stabilizing prices and reducing risk. The SEC’s Final Rule will make buybacks less attractive by forcing companies that engage in buybacks to publicly disclose their strategy and reasoning behind their buyback decisions—which may provide competitors with critical insights or fodder for lawsuits. As a result, investors will be adversely affected and companies will be unable to put their capital to the best use possible. In particular, it will harm the millions of Americans who have invested their retirement funds in the stock market.
General Reyes issued the following statement: “We are leading this coalition of states in opposition to the SEC buyback rule because the federal government again overreaches with a shortsighted and misguided policy. This rule will have severe consequences not only for investors and companies, but for everyday Americans and retirement account holders. We applaud the advocacy of the U.S. Chamber in this matter and join with it in standing up for the people of America.”
The amicus brief points out that the SEC itself acknowledged the added risks the Final Rule will impose on buyback programs. And the result of those added risks will be a reduction in such programs as companies seek other options. Because buybacks benefit investors and the public at large, the overall effect will be reduced value for investors and a less productive economy for all Americans.
Joining Utah on this brief are the States of Alabama, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Virginia, West Virginia, and Wyoming.
