SEC vs. appellate court on Dodd-Frank
I've discussed the gift that opponents have been given in the form of court decisions that have struck down various Dodd-Frank laws because in the mind of the judges the SEC did not adequately perform a cost-benefit analysis.
That legal rationale, which cropped up with fury when a federal appellate court based in Washington, DC struck Dodd-Frank's much ballyhooed proxy access rule last year, has haunted the SEC ever since. The DC-based appellate court strikes some as way too activist, in ways that will likely frustrate implementation of Dodd-Frank. Lawyers for groups opposing the law have seized on the decision as their basis for legal claims seeking to strike down other aspects.
The Volcker Rule is certainly in the cross-hairs, but the appeals court in DC is not the only court that has pushed against the law. A federal district judge has just vacated Dodd-Frank's hotly contested position limit rule, sending it back to the CFTC with a request for "further proceedings."
The plaintiffs in this proceeding were the SIFMA and the International Swaps and Derivatives Association, who charged that the rule would lead to wild price swings in some derivatives. Of course, if the SEC decides to appeal, it will likely go to the appellate court in DC, which may issue a decision with broader impact.
In any case, I've said all along that the legal war against Dodd-Frank would heat up quickly. That effort is now bearing fruit for opponents of the law.
- here's an article about the position limits decision