Tag Archives | SEC

Fiduciary Duty to Announce Votes (Part 2): Historical Background

A major landmark in establishing a fiduciary duty for proxy voting was the Department of Labor’s (DOL) 1988 Avon Letter, which was based on specific sections of ERISA (sections 402, 403, 404 and 405), summarized as follows:

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Fiduciary Duty to Announce Votes (Part 1): Editorial Calls For Advanced Disclosure

P&I-proxy-voters-cartoon
A recent editorial in Pensions & Investments (P&I), Winning over proxy voters, essentially argues that pensions have a fiduciary duty to announce their proxy votes in advance of the annual general meeting (AGM) if doing so is likely to influence the vote. This minor extension of current practice could have a profound impact and should also apply it to mutual funds and investment advisors, as well as other institutional investors, such as endowments.
The editorial discusses Warren Buffett’s recent reluctance to vote against the pay package at Coca-Cola.

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SEC Commissioner Wants to Muzzle Shareowners

DanielGallagherIn a speech to the 26th Annual Corporate Law Institute held at Tulane University Law School on Federal Preemption of State Corporate Governance, SEC commissioner Daniel Gallagher delivered a scathing attack on small investors and proposed radical steps to severely limit democracy in corporate governance.

Gallagher opened his attack by stating,

 Activist investors and corporate gadflies have used these loose rules to hijack the shareholder proposal system. Continue Reading →

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SRI Funds & Advisors Send Open Letters on Lawsuits Against Shareholders

SRIIt is wonderful to have supportive friends, especially when they represent socially responsible investors and advisors. John Chevedden, Myra K. Young and James McRitchie extend sincere thanks to the following for sending letters of concern regarding their recent lawsuits against us to: EMC Corp, Omnicom, Express Scripts, Chipotle Mexican Grill, Inc.: Continue Reading →

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Omnicom (OMC) Group Loses to Chevedden: Shareowner Rights Preserved

OmnicomIn a memorandum and order issued yesterday, Judge Louis L. Stanton, of United States District Court for the Southern District of New York, ruled John Chevedden’s motion to dismiss is granted. Omnicom’s motion for summary judgment is denied. “The clerk is requested to enter judgment dismissing the complaint, with costs and disbursements in favor of Mr. Chevedden according to law.” Continue Reading →

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Fleming to Head SEC's Office of the Investor Advocate

Rick A. Fleming

Rick A. Fleming

The Dodd-Frank act created a new permanent Investor Advisory Committee (SEC-IAC) to consult with and advise the SEC on matters, such as making recommendations to Congress for legislative changes on the regulation of securities products, trading strategies and fee structures, the effectiveness of disclosures, and other investor protection initiatives. The IAC is comprised of the head of a newly created Office of the Investor Advocate, a representative of senior citizens, a representative of state securities commissions, and 10 to 20 representatives of individual and institutional investors appointed by the SEC. Almost two years after establishing the new SEC-IAC, Rick A. Fleming has been named as the first head of the agency’s Office of the Investor Advocate (OIA). Continue Reading →

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SEC-IAC to Meet January 31st

SECThe Securities and Exchange Commission Investor Advisory Committee (SEC-IAC), established pursuant to Section 911 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, will hold a public meeting on Friday, January 31, 2014, in Multi-Purpose Room LL-006 at SEC headquarters, 100 F Street, NE, Washington, DC 20549. The meeting will begin at 10:00 a.m. (EDT) and end at 4:30 p.m. and will be open to the public, except during portions of the meeting reserved for meetings of the Committee’s subcommittees.
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Take Action: Support CII Rulemaking Petition for "Universal" Proxy

CII-logoThe Council of Institutional Investors (CII) filed a rulemaking petition with the Securities and Exchange Commission (SEC) asking that it amend its rules for contested elections so that “shareholders can vote for any combination of management and dissident nominees they wish to represent them.”  I hope readers will join with me in sending e-mails in support of the petition to the SEC.  Instructions on how to do so can be found at the bottom of this post. 

This petition is a followup to action they took on July 23, 2013 when the Policies Committee of CII approved a draft proposal for a Universal Proxy. Key, was addition of the following sentence to their policy on director elections:

To facilitate the shareholder voting franchise, the opposing sides engaged in a contested election should utilize a proxy card naming all management-nominees and all shareholder-proponent nominees, providing every nominee equal prominence on the proxy card.  Continue Reading →

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Best Coverage of SEC Proxy Advisory Services Roundtable

theracetothebottomTheRacetotheBottom has by far the best coverage I’ve seen on the SEC’s roundtable. Congratulations. Those interested in the tweet stream during the event can check out Proxy Advisory Services Roundtable: Tweets & Links to Analysis.

Of course, there was no one invited to the Roundtable to represent the interests of retail investors… left out again. My biggest disappointment is that no one mentioned the possibility of proxy advisor contests, such as what I proposed at Cisco. See Cisco: How Our Proxy Competition Would Work – The Short VersionContinue Reading →

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