Main Street Investors Coalition’s Latest Lie

They have no connection to Main Street or investors, and the only coalition they represent is the group of corporations and CEOs who fund them. They adopt a fake folksy name and use “we” about investors and put endearing stock photos of ordinary people and slick graphics in their tweets. They cite their affiliate organizations like the American Council on Capital Formation (same funders, same director, same agenda). They are trying to make it look like there is a critical mass on their side, but it is all coming from the same person sitting at the same desk.

And their (subsidized) research is slanted, their conclusions are unsupported, and sometimes they just outright lie.

On their blog, they blame the proxy advisors for the failure of the Rite Aid/Albertsons merger. This is indeed a lie. The merger failed because it was opposed by one of the largest Rite Aid shareholders, Highfields Capital Management, which announced it would vote against the merger. Whether it was this announcement that other investors found compelling or, more likely, whether they independently came to the same conclusion based on the elements of the proposed deal (outrageous compensation for insiders, an unappealing price, flat sector growth), it failed because shareholders did not like the deal. There’s a reason such business combinations are put to a shareholder vote — so that when insiders put together a deal that benefits them more than it benefits investors, they can say no. That is how markets work.

We find it very hard to understand why the Main Street Investors Coalition has such a problem with the non-binding independent research provided to sophisticated financial institutions who are not required to buy it or follow it. We cannot imagine why a group that says it represents investors is working so hard to prevent them from exercising the oversight that is the foundation of the system of checks and balances necessary for capitalism.

Actually, we can — it is because once again they are trying to promote anti-proxy advisor propaganda to make it even more difficult for shareholders to mitigate the inherent misalignment of interests between shareholders and managers.

The Main Street Investors Coalition knows very well that it cannot succeed by making its actual arguments out in the open, being honest about who it is and what it wants. And so they continue this pretense of hiding being the literal apron strings of a stock photo model. If they cannot tell the truth about themselves, you cannot trust them about anything else.

3 Comments Add yours

  1. I certainly appreciate your posts on this fake news group. Great analysis of the issues. We cannot be complacent. Agreed, “it cannot succeed by making its actual arguments out in the open, being honest about who it is and what it wants.”

    Unfortunately, it might just succeed through its obfuscation and its current propaganda machine. SEC Chairman Clayton dog whistled “Main Street Investors” 28 times in Testimony to the House Oversight of the U.S. Securities and Exchange Commission https://www.sec.gov/news/testimony/testimony-oversight-us-securities-and-exchange-commission.

    The press regularly cuts and pastes press releases from this “Coalition” and reports it as news with no counterpoint. So far, their matches are taking most of the oxygen.

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  2. Another dog whistle. SEC Adopts Amendments to Simplify and Update Disclosure Requirements https://www.sec.gov/news/press-release/2018-156 “The amendments are intended to simplify and update the disclosure of information to investors, including long-term Main Street investors, and reduce compliance burdens for companies without significantly altering the total mix of information available to investors.”

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