As noted in this press release from Texas Attorney General Ken Paxton, he is investigating ISS and Glass Lewis “for potentially misleading institutional investors and public companies by issuing voting recommendations that advance radical political agendas rather than sound financial principles.”
The press release notes his office has issued civil investigative demands to both firms to determine whether they violated Texas consumer protection laws, including rules on disclosing material facts. As noted in this Reuters article, those proxy advisors have issued statements that they are confident they have complied with all applicable laws.
In August, a federal judge issued a preliminary injunction blocking Texas from enforcing a first-of-its-kind state law restricting Glass Lewis and ISS from advising shareholders on ESG practices.
Authored by
Broc Romanek