AFL-CIO: Statement of AFL-CIO President John Sweeney on SEC Attack on Investor Rights

NOVEMBER 28, 2007

Steve Smith (202) 637-5018;
Daniel Pedrotty (202) 637-5379 or (202) 631-9854

Statement of AFL-CIO President John Sweeney on SEC Attack on Investor Rights

WASHINGTON, DC - November 28 - Investors should be able to count on the Securities and Exchange Commission (SEC) as their advocate. Sadly, that was not the case today. In a partisan 3-1 vote, the SEC attacked the right of investors to nominate corporate directors by implementing a rule that allows companies to bar shareholder access to ballots for board elections. This is the first time the SEC has voted recently to take away investor rights to present shareholder proposals on corporate governance issues.

This rule comes at a time when the need for strong, independent corporate directors and a vigilant SEC is more critical than ever. Our capital markets are facing a crisis of investor confidence amid evidence of profound corporate governance failures. Once again the failures are associated with runaway executive pay. The SEC should be responding by moving aggressively to protect investors, rather than taking away our rights.

In adopting this rule, the SEC ignored investors, who overwhelmingly opposed today’s action. There were a record number of comments from the public opposing the rule. Key lawmakers asked the SEC not to adopt this rule, particularly without a full Commission. Those concerns fell on deaf ears.

The SEC also did not give the public the legally required opportunity to understand and comment on their reasons for adopting the rule.

Chairman Cox caved to political pressure to take away a fundamental investor right. Investors have every reason to fear after today that they face a Commission that will ignore their views and act against their interests.

The AFL-CIO is the umbrella organization for America’s unions, representing 10 million workers nationwide. Union-sponsored pension plans hold more than $450 billion in assets.