Lawsuit Challenges Interpretation on 144A Bond Disclosures

September 18, 2023

On September 12, the National Association of Manufacturers (NAM) filed a federal lawsuit against the SEC for its new interpretation that would require 15c2-11 public disclosures to private-issue 144A bonds. At issue is the SEC’s application of the rule to fixed income bonds without a new rulemaking.

“The SEC’s attempt to force private companies to disclose confidential financial information publicly is a clear violation of the Administrative Procedure Act,” said NAM Chief Legal Officer Linda Kelly.

Why it matters: Starting in January 2025, broker-dealers would be required to verify that certain issuer (or asset-backed) information is publicly available on 144A securities to freely quote the bonds. For CREFC members, this change would impact Single Asset Single Borrower CMBS and CRE CLOs, among others.

The interpretation was originally supposed to go into effect in January 2023, but CREFC and other organizations worked with Congress and the SEC to get an extension. While CREFC continues to work on a legislative fix, the interpretation would go into effect in 2025 absent action from Congress, the courts or the SEC.

What they’re saying: NAM’s suit alleges procedural deficiencies in the SEC’s rulemaking process.

  • Since Rule 15c2-11 was introduced in 1971, it has always been treated as applying exclusively to the equity markets. NAM says that expanding the rule would have to follow the Administrative Procedures Act.
  • But the SEC now claims the rule has always applied to fixed income and the rulemaking is unnecessary.

What’s next: The lawsuit was filed in the Eastern District of Kentucky, which is in the Sixth Circuit Court of Appeals.

  • While finally resolving the litigation could take years, observers expect the district court could issue a “nationwide injunction” to temporarily pause application of the rule during the challenge.
  • The injunction could quickly be appealed up through the levels, including to the Supreme Court, before the case is even heard on the merits. Thus, the change could be paused while the litigation proceeds.
Contact Sairah Burki ( and David McCarthy ( with questions about 15c2-11. 


Sairah Burki
Managing Director, Regulatory Affairs

David McCarthy
Managing Director, Head of Policy

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The information provided herein is general in nature and for educational purposes only. CRE Finance Council makes no representations as to the accuracy, completeness, timeliness, validity, usefulness, or suitability of the information provided. The information should not be relied upon or interpreted as legal, financial, tax, accounting, investment, commercial or other advice, and CRE Finance Council disclaims all liability for any such reliance. © 2023 CRE Finance Council. All rights reserved.

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