Risk & Compliance

SEC Sued Over Failure to Enact Political Disclosure Rule

"While a majority of our citizens want to end the flow of dark money, our government is sitting on its hands," says the director of a new watchdog ...
Katie Kuehner-HebertMay 14, 2015

The newly formed Campaign for Accountability watchdog group is suing the Securities and Exchange Commission for failing to  require corporations to disclose their political contributions.

The lawsuit, filed in the U.S. District Court for the District of Columbia on behalf of plaintiff Steve Silberstein, alleges that the SEC violated the Administrative Procedure Act by failing to act on a rulemaking petition submitted by Silberstein — with roughly 700,000 signatures — requesting the agency require public companies to disclose their political activities.

In 2013, the SEC’s Division of Corporation Finance “claimed” to consider whether the Commission should issue a rule regarding disclosure, but the rule never materialized, the Campaign for Accountability group said in a press release Wednesday.

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“Millions of Americans’ lives are negatively impacted by decisions made behind the doors of corporate boardrooms, government offices, and shadowy nonprofit groups,” said Anne Weismann, executive director. “[Campaign for Accountability] will hold those wrongdoers who act at the expense of the public good accountable for their actions.”

In 2013, Silberstein sued Aetna as a shareholder over the company’s failure to accurately reveal its political donations, despite its claim to have a robust disclosure policy in place, Weismann said. A federal court in New York dismissed the case earlier this year for failure to state a claim under the Securities and Exchange Act.

A Corporate Crime Reporter article Wednesday said that Weismann was formerly chief counsel of Citizens for Responsibility and Ethics (CREW) in Washington. Another founder of the new group is Louis Mayberg, previously chairman and founder of CREW.