Texas Insider Report: AUSTIN, Texas – Attorney General Ken Paxton has joined an amicus brief in the Fifth Circuit Court of Appeals, opposing a rule, issued by the Securities and Exchange Commission (SEC) and NASDAQ, requiring NASDAQ-listed companies to compose their boards of directors using explicit quotas based on race, sex, and sexual orientation.
NASDAQ’s “Board Diversity Proposal” would require each NASDAQ-listed company to have – or to explain why it does not have – at least one director who identifies as a woman and at least one other director who identifies either as a racial or ethnic minority or LGBTQ+ community member. NASDAQ has threatened to remove from the exchange any firm that refuses to comply.
“It is unconscionable to see discrimination so blatantly put on display by requiring these companies to hire employees based solely on race, sex, and sexuality,” Attorney General Paxton said. “The SEC’s quotas violate the Constitution and federal civil rights laws by requiring that companies overlook a person’s relevant qualifications under the guise of promoting diversity.”
This brief demonstrates how the proposed quota rule violates the Fifth Amendment’s equal protection principles, and further explains that the SEC did not have statutory authority to issue the patently unconstitutional rule in the first place.
To read the brief click here.