The U.S. Securities and Exchange Commission must carefully weigh its legal strategy following a federal appeals court decision last week that struck down the SEC’s regulation of private fund advisers as being beyond the agency’s statutory authority, securities lawyers said this week, citing the SEC’s larger agenda.
“The SEC is going to need to consider its next steps very carefully, because the court’s decision has significant implications on the SEC’s rulemaking authority, and that extends beyond this rule alone,” said Eric Diamond, a Sullivan & Cromwell partner. “Many of the SEC’s existing rules and a number of the proposed rules under [SEC Chair Gary] Gensler rely on the authority that was the subject of this court decision.”
