SEC Faces Rising Litigation Risk Over Rules, Watchdog Says (1)

Legal challenges over the SEC’s corporate climate disclosure and hedge fund fee reporting rules are a harbinger of more litigation to come over agency regulations, the agency inspector general’s office said.

The Securities and Exchange Commission is facing heightened judicial scrutiny under Democrat Gary Gensler, the SEC’s chair since 2021, according to the Office of Inspector General’s annual report on the agency’s top management and performance challenges, released Monday. The report cited several legal challenges, including a case in which a court struck down hedge fund fee disclosure rules in June and pending litigation over March rules requiring corporate greenhouse ...