WASHINGTON - A federal appeals court has struck down a rule adopted last year by the Securities and Exchange Commission that gave shareholders more power to nominate board directors.
The US Court of Appeals for the District of Columbia Circuit said the SEC was “arbitrary and capricious’’ in implementing the rule, which was widely supported by investor advocates.
Judge Douglas Ginsburg said the SEC failed to estimate the cost to companies to campaign against investors’ nominations.
The US Chamber of Commerce and the Business Roundtable, a trade group of chief executives for the nation’s largest companies, had challenged the rule, which was mandated under the financial overhaul passed by Congress last year.
A spokesman said the SEC is reviewing the decision.