SEC Rule on `Conflict Minerals' Upheld by U.S. Court
The U.S. Securities and Exchange Commission rule requiring companies to disclose whether any “conflict minerals” are used in their products was upheld by a federal court in Washington.
“Finding no problems with the SEC’s rulemaking and disagreeing that the ‘conflict minerals’ disclosure scheme transgresses the First Amendment, the court concludes that plaintiff’s claims lack merit,” U.S. District Judge Robert Wilkins wrote, dismissing a challenge to the reporting requirement brought by three business trade groups.
The rule is part of the 2010 Dodd-Frank Act overhauling securities markets and applies to certain minerals mined in the Democratic Republic of the Congo and neighboring countries. It is intended to help ensure that use of the minerals didn’t benefit armed groups responsible for extreme violence in the region.
The National Association of Manufacturers, the Business Roundtable and the U.S. Chamber of Commerce claimed in their suit that being required to publish conflict mineral disclosures on their own websites is compelled speech that violates the First Amendment. In writing the rule, the agency was arbitrary and capricious, they said.
Spokesmen for the SEC, the Chamber and NAM didn’t immediately respond to requests for comment on the decision.
The case is National Association of Manufacturers v. U.S. Securities and Exchange Commission, 12-1422, U.S. Court of Appeals for the District of Columbia Circuit (Washington).
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