May 12, 2023


Washington, D.C. — Today, the U.S. Chamber of Commerce, the Texas Association of Business, and the Longview Chamber of Commerce filed a lawsuit in the U.S. Court of Appeals for the Fifth Circuit to stop the Securities and Exchange Commission (SEC) from implementing a rule that disincentivizes companies from using stock buybacks.

The Chamber’s lawsuit challenges the SEC’s rule under the Administrative Procedure Act, as well as the U.S. Constitution. The agency’s mandatory disclosure requirements not only risk the public airing of important managerial decisions but also compel speech in violation of the First Amendment. 

“Stock buybacks play an important role in the functioning of healthy and efficient capital markets,” said U.S. Chamber Executive Vice President and Chief Policy Officer Neil Bradley. “The SEC’s stock buyback rule doesn’t protect investors. Instead, it puts the thumb on the scale to discourage buybacks despite the fact that the repurchasing of shares improves returns for savers and investors across the economy.

Buybacks efficiently distribute capital to where it is most likely to result in the investments that grow businesses and add value for shareholders and Main Street investors. The Chamber’s lawsuit seeks to protect returns for investors as well as the ability of companies to make decisions free from government micromanagement.”

The U.S. Chamber supports the SEC’s core mission of protecting investors, maintaining efficient capital markets, and facilitating capital formation. The agency’s rule to disincentivize the use of stock buybacks undermines that core mission. This rule, if implemented, will hurt investors, including millions of retirement savers. 

The full petition can be viewed here.