SALT LAKE CITY, Utah, Feb. 23, 2023 (Gephardt Daily) — Utah Attorney General Sean D. Reyes has filed a lawsuit against the Securities Exchange Commission opposing a new proxy disclosure rule “that would increase activism, administrative costs, and shareholders’ risk of loss,” says a statement issued by his office on Thursday.
Texas, Louisiana, and West Virginia also joined in the lawsuit.
“Utah outlined its concerns with the rule when it filed comments with the SEC in December 2021,” the AG’s Office statement says. “The rule creates new reporting categories of proxy votes for registered management investment companies.
“But investors already have access to detailed information about proxy votes. Instead, the required information will be used by activists to increase their leverage to advance politicized proposals unrelated to investors’ economic interests. Specifically, in the Environmental, Social, and Governance (ESG) realm, investment firms are disguising social causes and political goals as objectively advancing shareholder value.”
SEC settlement
Reyes’ announced lawsuit follows a Tuesday news release issued by the U.S. Securities Exchange Commission saying it had reached a $5 million settlement with The Church of Jesus Christ of Latter-day Saints and Ensign Peak Investors, Inc.
The SEC said the penalty was for filing incorrect financial forms, which “obscured the Church’s portfolio and misstated Ensign Peak’s control over the Church’s investment decisions.”
The SEC says the Church owns and operates Ensign Peak, and found the two had obscured the amount of the LDS Church investment portfolio with the creation and use of Shell companies.
The LDS Church also released a statement Tuesday, saying it had agreed to a settlement in the amount of $5 million, with $4 million to be paid by Ensign Peak Investors, Inc., and $1 million to be paid by the LDS Church.
“We affirm our commitment to comply with the law, regret mistakes made, and now consider this matter closed,” the Church statement says.
Court filing
The Utah AG’s Office lawsuit statement continues below:
“Fund advisers are legally bound first and foremost by their duty to the investors. The voting pressures that will result from the new rule will lead to decisions that undermine the primary responsibility of maximizing investors’ return on their investments.”
The Utah AG’s office also shared the court document filed, which appears below.
Texas v SEC Petition for Review
