Top U.S. Corporate Lobby Group Sues SEC Over Proxy Rules

The top US corporate lobby group has filed a lawsuit against Wall Street's regulator over the agency's recent vote to rescind rules that critics said impeded the independence of firms that advise investors on how to vote in corporate elections, Katanga Johnson reported for Reuters.

Photo Insert: The U.S. Chamber of Commerce

The move by the US Chamber of Commerce, in addition to the Washington, D.C.-based Business Roundtable and the Tennessee Chamber of Commerce & Industry, claims the Securities and Exchange Commission (SEC) failed to "follow proper procedures or provide adequate justification for its decision to roll back the 2020 Proxy Advisor Rule before it was allowed to take effect."

The move by the SEC earlier this month was the latest in a long-running battle over how to regulate proxy advisers like Institutional Shareholder Services and Glass Lewis, which advise investors on how to cast their ballot on issues including the election of directors, merger transactions, and shareholder proposals.

Corporations have said the advisory companies have amassed too much sway over corporate elections and should be more tightly regulated.

"The 2020 Proxy Advisor Rule was put in place to protect investors and to boost the competitiveness of the US public capital markets," said Suzanne Clark, the President and CEO of the Chamber of Commerce.

"However, the SEC's recent actions will deteriorate the public company model, ultimately depriving main street investors and everyday Americans dynamic growth opportunities to help build wealth and save for retirement."

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