NEW YORK, Oct 13 (Businesshala) – The National Association of Manufacturers (NAM), a trade group, sued the US securities regulator on Wednesday, asking investors to vote in companies refusing to implement Trump-era rules. was advised. corporate election.
Last year, the Securities and Exchange Commission finalized restrictions on proxy advisors to give companies a chance to view their recommendations and disclose conflicts of interest. But the agency’s new Democratic leadership has said it will review that rule and will not enforce it in the meantime.
NAM General Counsel Linda Kelly said it was an illegal reversal of the Trump-era regime.
The lawsuit is the first major clash between corporate interests and the SEC under its new chair, Gary Gensler, and the latest installment in the ongoing battle between corporate America and the proxy advice industry.
US business interests have for years pressed for action on proxy advisors, who have the power to swing votes in corporate director elections and on hot-button issues such as climate change, gender pay equity and lobbying.
NAM, which sued with equipment supplier Natural Gas Services Group Inc. (NGS.N) in the Western District of Texas, wants the SEC to begin enforcing the rules, Kelly said.
“Our members are starting to prepare for the next proxy season,” Kelly said, referring to the corporate annual meetings scheduled for early next year.
“In the regulatory process, this whipsaw undermines the predictable regulated entities and capital markets need.”
Natural gas services have been thwarted in attempts to correct information provided by proxy consultants, Kelly said, prompting the company to work closely with NAM on the legal challenge.
Proxy advisors Institutional Shareholder Services Inc. and Glass, Lewis & Co. have said the Trump-era rule would delay the advice they send to investors and limit their freedom.