The NAM is filing suit against the SEC for refusing to enforce the rule without going through the official process to change or replace it, as required under the Administrative Procedure Act. Agencies cannot set aside regulations they happen to disagree with, and the NAM is contending that the SEC has acted unlawfully by effectively rescinding the rule without inviting public comment on its impact on market participants, including manufacturers.

NAM Sues SEC to Maintain Proxy Firm Oversight | NAM

It’s disingenuous and almost sweet of NAM to get all protective about the requirements of the Administrative Procedure Act, which it was happy to ignore as the SEC’s promulgation of the rule failed to comply with it. The SEC can make this point in responding to this challenge, and should acknowledge in the litigation filed by ISS that the process was fatally flawed as they negotiate a settlement. But as NAM says in this statement, they will spend a lot of the shareholders’ money to prevent the sole source of independent research and analysis from reaching investors.