SEC Rejects Stay of Resource Extraction Rules

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On November 8, 2012, the SEC rejected a motion to stay the resource extraction rules pending outcome of litigation challenging the validity of the rules. The SEC gave the following reasons:

  • Movants have failed to demonstrate imminent, irreparable harm;
  • Movants have not demonstrated a likelihood of success on the merits; and
  • Other equitable considerations counsel against the issuance of a stay;

The SEC issued a stay of the proxy access rules when Rule 14a-11 was challenged. In that case the SEC noted a stay avoids potentially unnecessary costs, regulatory uncertainty, and disruption that could occur if the rules were to become effective during the pendency of a challenge to their validity.

The resource extraction rules do not require issuers to file a Form SD until 150 days after the first fiscal year ending after September 30, 2013. So perhaps the long implementation horizon is partly determinative.

The conflict mineral rules also have a long implementation timeline. Given the result with the resource extractions rules, it seems easy to predict the SEC will not stay the conflict minerals rules either.

Check frequently for updated information on the JOBS Act, the Dodd-Frank Act and other important securities law matters.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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