SEC Says Its Stock Buyback Rule Squares With First Amendment

The Securities and Exchange Commission said a rule requiring public companies to disclose more information about stock buybacks will help investors evaluate a repurchase, while imposing only limited costs on businesses.

The agency is defending the rule, adopted in May, after business groups, including the US Chamber of Commerce, sued to have it vacated. The groups say the rule is “invasive” and unconstitutional, violating First Amendment protections against compelled speech.

The SEC said the rule is a modest amendment to existing disclosure requirements and has been mischaracterized as an unjustified attack on buybacks.

“The rule’s modest requirements, in service of ...