Vivek Ramaswamy and Elon Musk, prominent Trump allies, are leading attacks on the Securities and Exchange Commission (SEC) after a court ruling invalidated the agency’s approval of Nasdaq’s board diversity rules. Their criticism highlights broader concerns about the SEC’s credibility and its regulatory impact, signaling potential changes in the SEC under the incoming Trump administration.
1. Court Ruling and SEC Defeat
A federal appeals court recently struck down the SEC’s approval of Nasdaq’s diversity rules, which required listed companies to disclose board diversity or justify the absence of such members. The Fifth Circuit Court ruled that these rules did not align with federal securities laws, a significant legal setback for the SEC.
2. Criticism from Trump Allies
Vivek Ramaswamy and Elon Musk joined forces with other conservative figures, accusing the SEC of overstepping its authority. Ramaswamy called the agency’s repeated legal defeats a blow to its legitimacy, while Musk referred to it as “weaponized” for political purposes. Senator Mike Lee also voiced his distrust of the agency.
3. The SEC’s Legal Challenges
This ruling reflects ongoing legal challenges to the SEC’s actions, particularly from conservative groups. The SEC, led by Gary Gensler, has faced several setbacks, and industry groups have actively opposed its regulations. The Nasdaq diversity rules were part of broader efforts to push for corporate inclusivity but have now become a point of contention.
4. The Future of the SEC Under Trump
With President-elect Donald Trump’s upcoming administration, Ramaswamy and Musk are poised to influence regulatory changes, including the selection of Paul Atkins to lead the SEC. Atkins, a former SEC commissioner, is expected to roll back certain rules, signaling a shift toward a more business-friendly regulatory environment.
5. Critics of the SEC’s Legal Defeats
While some, like Dennis Kelleher of Better Markets, argue that these legal challenges are politically motivated, they caution that undermining the SEC could weaken financial oversight, potentially harming U.S. capital markets.
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