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"Share repurchase rules stayed, inching toward vacatur"

This article origionally comes from Cooley LLP

Our November One-Minute Reads addressed the US Court of Appeals for the Fifth Circuit holding that the Securities and Exchange Commission (SEC) violated the Administrative Procedure Act by adopting final share repurchase rules. The Fifth Circuit held that the SEC acted arbitrarily and capriciously by adopting the new rules, failing to substantiate the new share repurchase rules’ benefits and costs, and applying inconsistent logic. The court did not vacate the rules – instead, it remanded the rules back to the SEC to attempt to repair the defects by November 30, 2023. Following the ruling, on November 22, the SEC announced that it had issued an order postponing the effective date of the share repurchase rules. As a result, the rules have been stayed pending further SEC action. On the same day, the SEC also filed a motion with the court for a time extension to repair the defects, with the plaintiffs opposing the motion.

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