JPMorgan Must Put Conservative ESG Plan Up for Vote, SEC Says

JPMorgan Chase & Co. must let its investors consider a conservative shareholder’s proposal urging the bank to examine its oversight of any civil rights risks, the SEC said.

David Bahnsen, a frequent conservative commentator, is using a family trust to seek the civil rights audit over concerns that financial services firms might have engaged in religious and political discrimination, according to paperwork he filed in connection with his proposal. He runs The Bahnsen Group, an investment firm that oversees more than $4 billion in client assets.

JPMorgan asked the Securities and Exchange Commission if it could scrap the proposal from the proxy ballot for its 2023 annual meeting, for which a date hasn’t been announced. The bank cited agency rules that let companies block resolutions that interfere with their day-to-day business. The SEC, which can file cases against companies that improperly exclude proposals, disputed JPMorgan’s claim.

“In our view, the Proposal transcends ordinary business matters,” SEC staff said in a March 21 letter released Wednesday.

Bahnsen and a lawyer for JPMorgan didn’t immediately respond to requests for comment.

JPMorgan was successful in stopping votes on two other environmental, social and governance proposals from conservative shareholders. The SEC said the bank can exclude proposals from the National Legal and Policy Center and the National Center for Public Policy Research, according to two March 21 letters released Wednesday.

The National Legal and Policy Center’s proposal urged JPMorgan to report on federal government requests to close customer accounts, citing concerns the bank cooperated with an Obama-era Justice Department operation that targeted gun dealers, among other businesses.

The National Center for Public Policy Research resolution demanded a report on any risks JPMorgan faces if it ends client relationships for non-financial reasons. The organization referenced allegations JPMorgan closed the bank accounts of conservatives.

The SEC agreed with JPMorgan that the two proposals sought to manage the firm’s day-to-day business, allowing it to cut the resolutions from its proxy ballot.