In a surprising development, ISS has brought a lawsuit against the SEC, claiming that recently issued SEC guidance relating to proxy advisors is unlawful.
Back in August, the SEC issued two interpretive releases on proxy advisors:
I didn’t cover this development at the time that it happened because snore (even Broc had to include the phrase “better than sex” in his blog title to get people to read it). Also, it didn’t seem like it was going to have any direct or immediate impact on stock plan proposals. If anything, I thought maybe it would encourage Glass Lewis to be a little more forthcoming about their evaluation criteria.
Nope, there’s more. Just last week, the SEC announced that it would hold an open meeting today to consider proposing rules relating to proxy advisors.
Yep, they did. On October 31, ISS announced that it has filed a lawsuit against the SEC, alleging that the guidance issued back in August exceeds the SEC’s authority and is procedurally improper, arbitrary, and capricious.
The lawsuit makes the following arguments:
I guess the SEC’s guidance must have struck a nerve. It will be interesting to see what happens.
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