Access Denied! Court Invalidates Proxy Access Rules

On July 22, 2011, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit vacated the proxy access rules pursuant to its ruling on the petition filed by the Business Roundtable and U.S. Chamber of Commerce (the "petitioners") for review of these rules. The court found that the Securities and Exchange Commission (SEC) "acted arbitrarily and capriciously for having failed ... adequately to assess the economic effects of a new rule."

In August 2010, the SEC adopted final rules permitting eligible shareholders to name director nominees in a company's proxy materials. In September 2010, the petitioners filed a petition for review of the proxy access rules. In October 2010, the SEC stayed the rules pending resolution of the litigation.