Manufacturers Drop Suit After SEC Grants Disclosure Exemption

The Securities and Exchange Commission will exempt a type of corporate debt often issued by private companies from the agency’s public disclosure requirements, heading off a legal fight with manufacturing groups.

The groups, led by the National Association of Manufacturers, dropped their lawsuit against the SEC on Wednesday, two days after the agency issued an order granting the manufacturers’ requested exemption.

The groups argued the SEC had made a novel interpretation of a rule that was meant to combat penny stock fraud, and said the agency’s disclosure requirements would have forced private companies to reveal proprietary financial information.

NAM’s chief ...