Paxton sues Biden administration to overturn illegal SEC rule that would harm financial companies and their investors

Austin, Texas — Attorney General Paxton has filed a motion for reconsideration against the U.S. Securities and Exchange Commission (“SEC”) to challenge a new rule that would unlawfully change proxy voting reporting requirements.

Mutual funds and other registered investment managers must report details of a proxy vote, including the category or subject of the vote, to the SEC on Form N-PX. Among other changes, the new rule amends this form by increasing the number of voting categories that deal with left priorities. While the stated purpose of the rule is to increase transparency regarding voting subjects, there is already enough information on proxy voting reports.

The real reason for the new rule is to force these companies to either increase their voting power, which will further the Biden administration’s radical political agenda, or face heightened public scrutiny. The by-products of these votes, along with a dramatic increase in compliance costs, will inevitably affect the company’s customers, shareholders, and investors. Thus, the new rule would force these funds to potentially violate their fiduciary duties by taking actions that may not be in the financial interests of their investors.

“This rule does next to nothing for public transparency. But it does give the Biden administration and its activist allies the ability to intimidate companies it believes are not doing enough to advance left-wing political causes,” Attorney General Paxton said. “The SEC’s actions here could force companies across America to reduce their returns to investors, hurt their own profits at the expense of their shareholders, and unlawfully risk their long-term financial security to avoid an awakened mob trying to cancel them.”

To read the full petition for consideration, click here.

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texasstandard.news contributed to this report.

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