The notice and comment process for SEC rulemaking typically generates turgid prose and repetitive argument. That is definitely not the case with regard to the comments on the SEC’s proxy advisor proposals.
Corporate governance expert Nell Minow stated that the rules as proposed would “undermine a crucial element of accountability to shareholders by severely hampering the access of investors, including individual investors whose assets are managed by intermediaries to the sole source of independent information.” She emphasized that the proposal “is wrong in every category.” Meanwhile, Tom Quaadman from the U.S. Chamber of Commerce said that the “disruptive behavior of an unregulated capital markets participant should not continue,” and a group called the Committee for Justice claimed that proxy advisory firms “exhibit signs of market failure, but the market has not been able to eliminate them” because of a “lack of transparency that is so pervasive in this process.”
Minow responded by referring to the Committee comment as part of “a choir of sock puppets, perpetuating the corporate insider spin” on the need for proxy advisor regulation. She added that the Chamber comment continues its “pattern of accusations contrary to the data and recommendations contrary to the law.”
Rarely are SEC rulemakings so entertaining, and rarely do sock puppets make an appearance.