It’s easy to be annoyed by the SEC’s failure to comply with clear statutory mandates.  However, not everyone is longanimous.  Oxfam America, for example, has moved beyond irritation to litigation. See Oxfam America Sues The SEC (Again) For Dilatory Rule Making.  Oxfam America’s suit is based on Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  That law required the SEC to adopt resource extraction disclosure rules by April 17, 2011.

Those rules are now four years late.  In the meantime, the SEC has found the time to file enforcement actions against corporate insiders for violating laws requiring prompt reporting of transactions and holdings.  Not conscious of the log in its own eye, the SEC’s announcement emphasized that deadlines were not optional:

“The reporting requirements in the federal securities laws are not mere suggestions, they are legal obligations that must be obeyed.  Those who fail to do so run the risk of facing an SEC enforcement action.”

The same could be said about Section 1504.  It is not a mere suggestion to the SEC, it is a legal obligation that the SEC must obey.  The SEC’s failure to meet Congress’ deadline is a clear example agency action “unlawfully withheld” under Section 706(1) of the Administrative Procedure Act.

The SEC, however, is vigorously resisting Oxfam America’s attempt to force compliance.  In a brief filed late last month, the SEC even went so far as to argue that “There is ‘no per se rule as to how long is too long.’”  I’m sure that the late Form 4 filers targeted by the SEC would agree wholeheartedly with the SEC.  The SEC also cites “finite resources” as if this put it in a unique position vis-à-vis its legal obligations.  But what private company doesn’t suffer from limited resources?

The SEC even doubles down on its own delay.  In its recent brief, the SEC announced that it is moving back its targeted compliance date from sometime this fall until next year.

The SEC makes no mention of its own Canon of Ethics which requires:

Each member should promptly perform the duties with which he is charged by the statutes. The Commission should evaluate continuously its practices and procedures to assure that it promptly disposes of all matters affecting the rights of those regulated.

17 C.F.R. § 200.68.