Attorney General Paxton has filed a petition for review against the U.S. Securities and Exchange Commission (“SEC”) to challenge a new rule that would unlawfully change proxy voting reporting requirements.
Mutual funds and other registered management investment companies must report the details of proxy votes, including the category or subject of the vote, to the SEC by filling out a Form N-PX. Among other changes, the new rule amends this form by expanding the number of voting categories that address left-wing priorities. Although the stated purpose of the rule is to increase transparency about the subjects of votes being taken, ample information already exists regarding proxy voting records.
The real reason behind the new rule is to force these companies to either increase the number of votes taken that would further the radical political agenda of the Biden Administration or face enhanced public scrutiny. The byproducts of these votes, along with the dramatic increase in compliance costs, would inevitably land on company clients, shareholders, and investors. The new rule would thus pressure these funds to potentially violate their fiduciary duties by taking actions that may not be in the best financial interests of their investors.
“This rule does little to nothing for public transparency. But it does empower the Biden Administration and its activist allies to bully companies that it doesn’t think are doing enough to promote left-wing political goals,” said Attorney General Paxton. “The SEC’s actions here have the potential to force companies across America to diminish their returns for investors, hurt their own bottom line at the expense of their shareholders, and unlawfully risk their long-term financial security in order to avoid the woke mob trying to cancel them.”
To read the full petition for review, click here.