The U.S. Securities and Exchange Commission spent $2.5 million on a court-rejected rule aimed at making it easier for shareholders to put board nominees on corporate ballots, according to the agency’s top official.
The SEC used about 21,000 staff hours -- valued at $2.2 million -- writing the so-called proxy access rule and needed $315,000 to defend it against a court challenge by the U.S. Chamber of Commerce and the Business Roundtable, SEC Chairman Mary Schapiro said in a letter to House lawmakers dated Aug. 5, according to a copy obtained by Bloomberg News. The letter’s contents were confirmed by John Nester, an SEC spokesman.
Schapiro was responding to Republican Representatives Randy Neugebauer and Jeb Hensarling of Texas and Scott Garrett of New Jersey, who sought an accounting after the U.S. Court of Appeals in Washington decided in favor of the business groups on July 22. The lawmakers said the ruling that the SEC failed to properly study the rule’s impact on companies raised “fundamental questions” about the agency’s work and spending on such efforts reflects “serious mismanagement.”
In her letter, Schapiro defended the spending, noting that it represented less than a tenth of a percent of the agency’s budget during that time.
“Writing rules to effectuate free and fair markets is a time-consuming, resource-intensive effort for the SEC,” she wrote. “The proxy access proposal was just one of more than 100 rulemakings the SEC has proposed or adopted over the past two years.”