When Lawmakers Demand SEC Lawlessness

Last week more than three dozen federal lawmakers—11 senators and 27 house members—sent an extraordinary letter to U.S. Securities and Exchange Commission Chairman Gary Gensler.

In it, the lawmakers demanded “robust enforcement” of the SEC’s informal climate-disclosure “guidance”—even as the agency fights an uphill court battle to salvage its recent climate-disclosure formal rule.

These lawmakers need a refresher course in constitutional and administrative law.  They might learn (or relearn) that agency guidance is not binding, and therefore not enforceable.  Unless and until an agency formally adopts a legally binding rule—usually through the public notice and comment process required by the Administrative Procedure Act—private citizens and businesses are free to ignore the agency’s informal suggestions and finger wags.

Source: When Lawmakers Demand SEC Lawlessness | Russ Ryan on LinkedIn