This Week in ESG and Impact Investing

We attended the SECs open meeting yesterday. Seated directly behind us were Mr. Thomas Lehner, a representative from the Business Roundtable and Ms. Amy Goodman, a former Chief of the SEC Task Force on Corporate Accountability and, currently, a Partner at Gibson, Dunn and Crutcher . (According to a press release issued when Mr Lehner testified at an SEC-sponsored Roundtable on Proxy Access, the Financial Times cited the Business Rountable as "the most influential chief executive lobbying group in the U.S.") The two were in good spirits, celebrating what they perceived to be an impending victory with respect to the vote on Shareholder Proposals relating to the Election of Directors. At one point in their conversation, we believe they discussed branding opponents to the Shareholder Proposal vote as "communists." They may have been referring to the AFL - CIO and related labor interests. We bring this up to note the type of unfair, unethical tactics used by oppo...

We note that none of the policy groups claiming to speak for African Americans have submitted comments concerning the SEC's controversial shareholders rights proposal. According to the Washington Post , "The leader of the Securities and Exchange Commission (Christopher Cox) told lawmakers yesterday that he is poised to move ahead with a controversial shareholders rights proposal, drawing sharp criticism from Democratic lawmakers and officials from unions and pension funds. In July, Cox voted to seek comment on two conflicting proposals. One would codify the way the SEC has typically done business in a manner that allows companies to exclude investor proposals from proxies sent to a company's shareholders. The second, broader plan would have allowed investors that hold at least 5 percent of a company's stock greater leeway in proposing board candidates in exchange for more disclosure about their operations." According to another source, the "SEC chief cites l...

On November 14th, the Senate Banking Committee held a hearing on Proxy Access. The hearing was chaired by Senator Jack Reed . In his testimony , SEC Chairman Christopher Cox noted: " Last autumn, the U.S. Court of Appeals for the Second Circuit invalidated the SEC’s interpretation of our existing proxy access rule that had been applied at least since 1990. Indeed, in the SEC’s view, that interpretation had been in effect since 1976. But the court found the SEC’s view since 1990 to be inconsistent with its prior interpretation. At the same time, the court said that it would “take no side in the policy debate regarding shareholder access to the corporate ballot,” noting that “such issues are appropriately the province of the SEC.” This decision applies only in one of the 12 judicial circuits in America. And it has created great uncertainty and danger for every stakeholder in our public markets. This uncertainty is compounded by a recent decision of the U.S. Supreme Court, which crea...

After hearing from a few people, let me clarify: 1. The purpose of the SEC may be to protect investors, but on April 28, 2003 , every major US investment bank was found to have aided and abetted efforts to defraud investors. Ethical problems have continued and grown worse: since late 2006, 182 major U.S. lending operations have "imploded" due to subprime lending issues. Most people losing their homes are low to moderate income people of color. This is no accident. Those with new ideas and solutions to the problem have been carefully excluded from the discussion, due to the same bigotry that gave rise to it. This, too, is no accident. We do not mean to sound cynical. We see what is, not what we would like to see. 2. The real issue is Hedge Funds, nothing else. In our comments to the SEC on the matter, we noted: "Any significant concern about proxy access rests with hedge funds, by their nature neither long term investors or sensitive to broader social concerns. The s...

In a November 1st letter to the Chairman of the SEC, Christopher Cox, 9 members of the Senate Banking Committee, or almost ten percent of the full U.S. Senate, wrote urging the SEC to maintain the current set of proxy rules and regulations. In the view of these members, "neither proposal should be adopted." (For our response, see: http://twisri.blogspot.com/2007/10/response-to-sec-shareholder-proposals.html ) Current federal law leaves regulation of the proxy process up to the SEC. Period. In a side conversation at a House Financial Services Committee hearing on Proxy Access held on 9/27, we warned Tim Smith, Chairman of the Social Investing Forum against believing that pushing to hold a hearing or getting letters written will block implementation of one of the two proposed rules. The issue is similar to what occurred in Florida (2000) and Ohio (2004:) what matters is the relevant vote, not the popular vote. In this case, the relevant vote is that of the Commission. Unless ...

In a November 2, 2007 article in the Tampa Bay Business Journal, Senior writer Margie Manning writes that " Urban Trust Bank expects to provide an alternative business lending option with its two new offices in the Tampa Bay area." We were quoted in the article stating that " Minority owned banks in general have struggled with business lending," Urban Trust "opened branches in the Wal-Mart SuperCenters in Gibsonton and Palmetto Oct. 29."

House Financial Services Committee Oversight and Investigations Subcommittee Hearing on Preserving Minority Banks On October 30, 2007, the House held a hearing on Minority Banks. While we did not testify, the ranking Republican member, Representative Gary Miller (CA), read extensive portions of our research into the record. We have called for the development of tools to get capital into the best of these institutions, those with solid financial performance and outstanding performance in helping to meet community credit needs.