Ex-Securities and Exchange Commissioner Paul Atkins wants the agency to rework its shareholder proposal rule, including the process that the staff employs to determine when issuers can leave the proposals out of their proxy materials. Atkins pointed to the recent increase in shareholder proposals that are pressing companies to reveal their political spending even though the majority of shareholders oppose such resolutions. He spoke against special interest groups using these proposals to push their agendas.
Atkins made his comments during an interview with BNA. Referring to the no-action process that lets SEC staff figure out the major issues that end up on issuers’ proxies for shareholders to vote on, he said that this action was very subjective and doesn’t have much transparency, actual due process, or accountability.
Under the SEC’s 1934 Securities Exchange Act Rule 14a-8, its shareholder proposal rule, the procedures that eligible investors can have their proposals included in the proxy materials of a company are laid out. The rule also lets issuers leave out proposals in certain, limited situations. (Still, issuers have to tell the SEC Division of Corporation of Finance why the proposal is being left out) and the staff can then grant no-action relief.
Just a couple of years ago, the Commission was reviewing the US proxy voting system’s inner workings. On July 14, 2010, the regulator put out a concept release seeking public comment on the transparency, accuracy, and efficiency of the voting process. (Recommendations that the shareholder proposal process be modified have been making their way through the SEC on numerous occasions in the last three decades.)
Still, supporters of the shareholder proposal process stand by it, believing that it is a key communication channel between shareholders and corporations. Also, considering all the changes coming down under the JOBS Act and the Dodd-Frank Act, they don’t think that now is the time to tinker with it.
Institutional Investor Securities Fraud
At SSEK Partners Group, our securities lawyers have decades of combined experience in securities law and the securities industry. We represent institutional and individual investors and clients that “opt out” of class actions. Our institutional investment fraud law firm represents corporations, high net worth individuals, partnerships, private foundations, banks, charitable organizations, financial firms, municipalities, large trusts, school districts, retirement plans, and others that have sustained substation losses impacting hundreds, perhaps even thousands of individuals.
Shepherd Smith Edwards and Kantas, LTD, LLP seeks to recover damages and losses sustained from negligence, securities fraud, and other illegal and improper actions committed by financial firms and/or their representatives in the investment and sale of financial instruments and the management of investors assets. Your case assessment with us is a free, no obligation consultation.
Related Web Resources:
Securities Exchange Act of 1934
Final Rule: Amendments to Rules on Shareholder Proposals, SEC
More Blog Posts:
Congress Regulates the Securities Regulators, Stockbroker Fraud Blog, April 30, 2013
SEC Commissioner Aguilar Calls For the Abolishment of Mandatory Arbitration Agreements, Stockbroker Fraud Blog, April 21, 2013
Federal Records Act Lawsuit Seeking to Make the SEC Reconstruct About 9,000 Enforcement-Related Documents is Dismissed, Institutional Investor Securities Blog, February 5, 2013