SEC Sued Over Refusal to Referee Shareholder Proposal Debate (1)

Two shareholder advocacy groups on Thursday sued the SEC over its decision to stop weighing in on which investor proposals companies are required to put to a vote.

The Securities and Exchange Commission violated the Administrative Procedure Act by failing to include a notice and comment period before upending its decades-long role of approving or denying companies’ decisions to leave shareholder proposals off annual meeting ballots, according to a lawsuit the Interfaith Center on Corporate Responsibility and As You Sow filed in the US District Court for the District of Columbia.

Thursday’s lawsuit is the first directly targeting the SEC’s ...