Five years in the making! Recently, the US District Court for DC granted summary judgment and held that the SEC’s rule regarding proxy advisors should be vacated. Back in 2019, ISS filed a lawsuit against the SEC over the SEC’s interpretive guidance that vote recommendations provided by proxy advisors are considered “solicitations” under the proxy rules. The SEC followed up on its interpretative guidance in 2020 by codifying it in a rulemaking, along with requirements for proxy advisors to comply with in order to avoid SEC rules that apply to most proxy “solicitations.” The SEC adopted further rule amendments in 2022 dropping several of the more stringent requirements included in the 2020 rules. At each of those steps, ISS amended its complaint.

Flash forward to today, and we finally have a decision. The court held that the SEC’s view that providing proxy advice is a “solicitation” is contrary to law and in excess of statutory authority granted to it under the Exchange Act – and granted summary judgment to ISS.

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Photo of Allison Handy Allison Handy

Allison Handy is the firmwide co-chair of the Corporate & Securities practice. Her extensive experience includes advising public and private companies in connection with corporate governance practices, disclosure issues, and capital markets transactions, such as equity offerings, debt offerings and tender offers. She…

Allison Handy is the firmwide co-chair of the Corporate & Securities practice. Her extensive experience includes advising public and private companies in connection with corporate governance practices, disclosure issues, and capital markets transactions, such as equity offerings, debt offerings and tender offers. She is also a leader of the firm’s Environmental, Social, and Governance advisory team.

Allison provides counsel to companies on a broad range of issues faced by management and directors in connection with the many compliance aspects of securities laws, including governance rules adopted by the Securities and Exchange Commission (SEC) and stock exchanges. She advises boards and committees in matters related to internal investigations and the efforts of shareholder activists, and works closely with in-house counsel, financial personnel, and outside auditors and advisors to help her clients prepare proxy statements and other reports to investors that meet complex disclosure obligations.