ACR Project and CEO Jointly File Brief on Behalf of Cory R. Liu, Supporting Challenge to SEC Approval of Discriminatory NASDAQ Listing Requirement

Home » Blog » ACR Project and CEO Jointly File Brief on Behalf of Cory R. Liu, Supporting Challenge to SEC Approval of Discriminatory NASDAQ Listing Requirement

The ACR Project and the Center for Equal Opportunity together filed an amicus brief on behalf of Cory R. Liu with the Fifth Circuit Court of Appeals, supporting a challenge to the SEC’s 2021 approval of NASDAQ’s alteration of its listing requirements.  Those requirements force listed companies to: (a) disclose how many directors they have; and (b) (i) produce stats showing a sufficiently “diverse” set of directors across various identitarian classifications to satisfy NASDAQ; or (ii) explain in writing why they don’t.*, **

Our full brief is below.

Building on Mr. Liu’s work in Students for Fair Admissions v. Harvard/UNC, where both the majority opinion and Justice Thomas’s concurrence cited his amicus brief on behalf of David Bernstein on the irrationality of the federal racial classification system, this brief homes in on the irrationality of NASDAQ’s discrimination approved by the SEC.  NASDAQ’s requirement forces corporations to classify their directors along identitarian lines and to disclose the allocation of directorships among those classifications (or to explain why they have failed to do so).  More specifically, the requirement demands that disclosed allocations distribute directorships to capture a very particular, very odd concept of “diversity,” in which boards must include: (i) at least one woman; and (ii) at least one director who is either a racial minority or LBGTQ+.

The SEC and NASDAQ offer no rational basis for choosing to prioritize precisely this kind of diversity.  They simply prioritize diversity of sex over diversity of race, sexual orientation, and gender identity (not to mention all the other dimensions of diversity the rule entirely ignores, including those likely to have much greater importance to a corporation’s functioning, such as professional expertise).  Instead, they equate all differences of race, sexual orientation, and gender identity, codifying that the relevant contribution to diversity of a white bisexual man is not only similar to, but interchangeable with, the contributions of a straight black man or a transgender Native American.  This works an erasure of each distinct group and the potential contributions of any particular individual in any of them.

The only appropriate and lawful way to achieve diversity is to treat people as unique individuals rather than stereotyping them based on limited aspects of their identity.  The challenged rule is a clumsy, wrongheaded, and unlawful attempt to move our society even further toward one dominated by identity-based quotas.



* – In the interest of perfect accuracy, we filed a motion for leave to file an amicus brief, with that amicus brief attached as an exhibit.

** – You can read our contemporaneous assessment of the problems with NASDAQ’s listing requirement alteration here.

Published On: March 29th, 2024Categories: Blog, Filings and CasesBy