SEC Sues Proxy Adviser ISS Over Ignored Subpoena in Corporate Governance Clash

The US Securities and Exchange Commission filed an enforcement action in a Pennsylvania federal court to compel Institutional Shareholder Services to comply with an outstanding subpoena. The SEC states it is conducting a fact-finding investigation into shareholder voting recommendations and hasn't accused ISS of any misconduct. ISS and its main rival Glass Lewis command roughly 90% of the global market for corporate governance recommendations. Corporate entities have lobbied for decades to limit these proxy firms, arguing they hold conflicts of interest by offering both voting recommendations and corporate consulting services. ISS argues that producing the requested materials raises serious First Amendment concerns regarding protected speech. "Our clients share this information with an expectation that the information will not be shared—an expectation we take seriously and will continue to defend." — ISS spokesman.