Bloomberg Law
June 15, 2021, 4:57 PMUpdated: June 15, 2021, 7:15 PM

Shareholder Rule Change ‘Flawed at Every Turn,’ Investors Say (1)

Jennifer Bennett
Legal Reporter
Lydia Beyoud
Lydia Beyoud
Corporate Governance Reporter

A recent change to an SEC rule governing shareholder proposals “guts” the process in return for “minuscule and largely hypothetical cost savings,” a group of institutional investors say in a federal complaint filed Tuesday in Washington.

The amendments to the Securities and Exchange Commission’s Rule 14a-8 “dramatically increase” how much stock shareholders must own to submit a proposal, and the agency’s “purported justifications for the amendments were flawed at every turn,” according to the complaint filed in the U.S. District Court for the District of Columbia.

Shareholder advocate James McRitchie, the Interfaith Center on Corporate Responsibility—a coalition of more than ...

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