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SEC Again Caters to Wall Street

Better Markets objected to a new SEC rule on shareholder resolutions that will take away the ability of shareholders to hold big corporations and their management responsible for their actions. 

One of the SEC’s favorite euphemisms to hide and disguise its anti-investor, pro-corporate agenda is “modernization,” which it again deploys here to claims its action will modernize its shareholder proposal rule. However, the SEC’s action really does the bidding of corporate America and its lobbyists by taking away the ability of shareholders to hold big corporations and their management accountable for their actions.

The rule really “amounts to a policy of collective punishment” because the SEC uses the 15 or so entities that file disproportionately large numbers of proposals as an excuse to change the rule applicable to thousands of companies and tens of millions of investors. As a result, the SEC is punishing and disenfranchising the corporate rights of all those shareholders based on the conduct of just a few. This action will harm Main Street investors and is a radical, ideologically driven policy that deliberately ignores the documented value of shareholder proposals.

Revealing the SEC’s ideological agenda, the action specifically targets proposals that have been gaining support among shareholders, such as those related to environmental, social and governance-related (ESG) policies of a company, which the Chamber of Commerce, Corporate America and vocal Republican members of the SEC and elsewhere have been aggressively opposing for some time now. Read Better Markets’ complete statement.

Sadly, this isn’t a one-off action by Trump’s SEC, but more like a pattern, including for example, the SEC's recent approval of two other rules—Regulation S-K modernization and “accredited investor” definitionthat Wall Street and Corporate America cheered and were opposed by investor advocates. Read a complete statement on the negative impact of these rules on Main Street investors.

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