Trade Associations Challenge SEC Rule Requiring Public Companies to Disclose Payments of More Than $100,000 to Foreign Governments

A coalition of four trade associations has joined together to challenge a rule issued by the SEC that requires public companies to disclose payments of more than $100,000 made to foreign governments for projects relating to the commercial development of oil, natural gas, or minerals. The associations (including the U.S. Chamber of Commerce, the American Petroleum Institute, the Independent Petroleum Association of America and the National Foreign Trade Council) are challenging the SEC’s "Disclosure of Payments by Resource Extraction Issuers" rule, also known as "extractive industries rule," both in the U.S. District Court for the District of Columbia and in a petition for review with the U.S. Court of Appeals for the D.C. Circuit, charging that the rule violates the First Amendment, the Administrative Procedure Act ("APA"), and the Exchange Act of 1934. The rule, which was adopted on August 22, 2011 by a two-to-one vote, was promulgated pursuant to Section 1504 of the Dodd-Frank Act, which added Section 13(a) to the Securities Exchange Act of 1934, which requires the SEC to issue rules requiring resource extraction issuers to disclose information relating to payments concerning foreign energy investments. Calling this "one of the most expensive rules in the history of the Securities and Exchange Commission," the associations argue that the SEC failed to make a determination of its benefits in the face of an estimated cost of more than $14 billion.

View Petitioner Brief in full here (links externally to PDF).