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October 18, 2015

SEC, Amnesty International Ask D.C. Circuit Court To Reconsider Conflict Minerals Decision

Dynda A. Thomas at Squire Patton Boggs reports that the U.S. Securities and Exchange Commission (SEC) and Amnesty International have both requested that the District of Columbia Court of Appeals reverse two previous rulings that found the SEC’s conflict minerals regulation is unconstitutional. (In April 2014, and again in August 2015, the appeals court found the rule violated reporting companies’ First Amendment rights.) According to Thomas, “An important argument made by both the SEC and Amnesty International in support of their requests for an en banc rehearing is that the prior opinions address ‘issues of exceptional importance.’ They go on to say that if an element of the conflict minerals rule is found to be unconstitutional, other securities disclosure requirements will also be at risk for constitutional challenge.” 

Thomas also reminds companies affected by the rule that, despite the legal challenges, they and all of their suppliers should continue to gather information about the smelters and refiners that process their products, and the country of origin, source, and chain of custody of the conflict minerals in their products. Thomas notes, “Until there is new guidance from the SEC, reporting companies should continue to look to the April 2014 SEC Statement for guidance on what to include in their reports.” 

The law firm of Schulte, Roth and Zabel has also added four new education modules to their conflict minerals webpage. MSCI urges its members that are required to file under the SEC’s rule check out this resource. Additionally, MSCI continues to work with the National Association of Manufacturers and other allies to support legal challenges to the SEC’s conflict minerals rule.