SEC puts new shareholder rules on hold due to suit

WASHINGTON -- The government says it is putting on hold new rules that make it easier for shareholders to nominate directors of public companies, after the U.S. Chamber of Commerce sued to block the changes.

The new rules adopted by the Securities and Exchange Commission were due to take effect in time for next spring's elections season for a majority of public U.S. companies.

The rules allow groups that own at least 3 percent of a company's stock to put their nominees for board seats on the annual proxy ballot sent to all shareholders.

The chamber says they would allow the proxy process to be used to promote narrow interests. An SEC spokesman said the agency believes the rules are in investors' best interests, and that it will "vigorously" defend them against the lawsuit.