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News September 27, 2004 Issue

U.S. Chamber Asks Court for Stay

Please, please, make it stop (for now, at least).

That was the thrust of an "Emergency Motion" filed by the U.S. Chamber of Commerce last week. The Chamber asked a court to stay the effectiveness of the SECís fund governance rules while the rulesí ultimate fate is decided in litigation. "The challenged provisions of the rule will force thousands of companies in a crucial sector of the economy to replace their current chairs and reconstitute their boards," said the Chamber. If the rule is not stayed, "the fortunes of thousands of companies ó and millions of investors ó will remain in control of boards of directors that were the product of an illegitimate federal regulation."

Yale law professor Jonathan Macey and fund industry consultant Geoffrey Bobroff each filed a declaration supporting many of the assertions in the Chamberís motion for a stay.

The Chamber asked the court to decide whether or not to grant the stay by October 18. If the court decides not to stay the rules, the Chamber alternatively asked for an expedited briefing. The motion also addresses the litigationís outstanding jurisdictional issues.