U.S. Appeals Court overturns Nasdaq board diversity rule

A U.S. Appeals Court overturned a Securities and Exchange Commission (SEC) rule that had required companies listed on the Nasdaq stock exchange to disclose whether their boards had women or minority members–and if not, why not.

The decision, handed down Wednesday by the U.S. Court of Appeals for the Fifth Circuit, said that the SEC and Nasdaq rule was not related to the core purposes of the Securities Exchange Act of 1934.

“The proposal instead represented an attempt by Nasdaq and SEC to use their ‘leverage over market participants’ to remedy a societal challenge that bore no relation to ‘the authority granted them in the Exchange Act,’” the decision said.