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Alliance for Fair Board Recruitment; National Center for Public Policy Research, versus Securities and Exchange Commission

The Fifth Circuit Court of Appeals invalidated Nasdaq’s diversity disclosure rules, which required companies to disclose the racial, gender, and sexual orientation of their directors or explain non-compliance. The court ruled the rules conflicted with the Securities Exchange Act of 1934, finding they exceeded Nasdaq’s regulatory authority. The decision underscores limitations on self-regulatory organizations, emphasizing that exchange rules must align with the Act’s goals of preventing fraud and promoting fair markets.

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