Last week – as noted in this Cooley Alert penned by Brad Goldberg, Beth Sasfai, Justin Kisner and Michael Mencher – the SEC issued this Section 21(a) Report of Investigation addressing the activities of Climate Action 100+ (CA100) and certain of its members in connection with the 2021 contested director election at ExxonMobil.
The SEC determined not to pursue an enforcement action based on the conduct known to it at this time and made no findings of violations. The report is nevertheless a significant warning to institutional investors and other shareholders that coordinated engagement, including voting activity, even if organized through an intermediary, may implicate beneficial ownership reporting requirements under Sections 13(d) and 13(g).
The report also comes amid broader regulatory pressure on coordinated shareholder voting and the proxy voting ecosystem. One important question to watch is whether the SEC applies similar theories to proxy advisory firms, particularly given the White House’s December 2025 executive order expressly directing the SEC to analyze whether proxy advisers may serve as vehicles through which investment advisers coordinate their voting decisions and form a “group” under Sections 13(d) and 13(g). That question is especially timely given the SEC’s ongoing subpoena-enforcement action against ISS seeking data relating to its proxy recommendations and votes.
Here are the “Key Takeaways” from the Cooley Alert:
- No enforcement action, but a clear warning. The SEC’s investigation raised serious concerns, and the SEC used the report to provide guidance for investors participating in similar organizations. Coordinated action prompted by an intermediary’s pressure on members to align regarding the acquisition, holding, disposition or voting of securities may provide circumstantial evidence of an agreement or understanding sufficient to create a “group” as determined under Sections 13(d)(3) and 13(g)(3).
- Disclaimers alone are not enough. Investors may reserve independent voting discretion and disclaim “group” status, but the SEC emphasized that actual conduct controls. At the same time, parallel voting, ordinary-course communications, independent voting decisions and passive receipt of an activist solicitation do not, standing alone, establish a “group.”
- Schedule 13G eligibility presents a separate risk. Even if investors have not formed a “group,” a qualified institutional investor or passive investor holding more than 5% may lose eligibility to report on Schedule 13G if its activities have the purpose or effect of changing or influencing control of the issuer. The report suggests that this analysis can extend beyond a director contest to coordinated efforts targeting specific management or policy outcomes.
- Proxy advisers are a natural area to watch. The report repeatedly focuses on intermediaries that organize investors around shared objectives and voting outcomes. That framework closely tracks the December 2025 executive order, which specifically directed the SEC to consider whether a proxy adviser can facilitate coordination among investment advisers sufficient to create a “group” as determined under Sections 13(d)(3) and 13(g)(3).
Authored by
Broc Romanek