(This article first appeared on Think Advisor)

The U.S. Court of Appeals for the D.C. Circuit on Tuesday shot down attempts by Massachusetts and Montana securities regulators to nullify the Securities and Exchange Commission’s capital raising rule, Regulation A+.

The petitioners, William Galvin and Monica Lindeen, the chief securities regulators for Massachusetts and Montana, respectively, argued that because the SEC “declined to adopt a qualified-purchaser definition limited to investors with sufficient wealth, revenue or financial sophistication to protect their interests without state protection, Regulation A-Plus fails both parts of the United States Supreme Court’s statutory construction standards enunciated in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842–43 (1984).”