SEC Sues ISS in Proxy Adviser Crackdown Under Trump
The SEC has filed suit against Institutional Shareholder Services to enforce a subpoena, signaling heightened scrutiny of proxy advisory firms.
The Securities and Exchange Commission sued Institutional Shareholder Services on Monday, moving to enforce a federal subpoena against one of the country's most influential proxy advisory firms as the Trump administration intensifies its oversight of the sector.
ISS, which advises major institutional investors on how to vote their shares in corporate elections, has long drawn criticism from Republican policymakers who argue that proxy advisers wield outsized, opaque influence over American corporations. The SEC's legal action marks a significant escalation in that long-running political battle.
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The lawsuit represents the Trump administration's most direct regulatory strike yet against the proxy advisory industry. By compelling ISS to comply with the subpoena, the SEC signals it is prepared to use litigation as a tool to extract information from firms that have resisted or delayed cooperation with agency demands.
The move could have broad implications for the proxy advisory sector, which plays a critical behind-the-scenes role in shaping shareholder votes on issues ranging from executive compensation to environmental and governance policies. A forced disclosure of ISS's internal processes or client data could expose the firm to further regulatory action or reshape how it operates.
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