After another Election Day filled with mostly unsubstantiated Republican claims of vast left-wing (read: non-white) voter fraud, the Securities and Exchange Commission is jumping on the GOP bandwagon.
The Republicans have learned to blame poor electoral showings--or, apparently, even strong ones such as yesterday's--on a vast army of illegal immigrants, dead people and welfare queens stuffing the ballot box at the behest of the ghouls at ACORN. For its part, the SEC is taking aim at the evil hedge funds and other speculators that trade those wicked derivatives.
SEC Chairman Mary Schapiro, who yesterday sought to put that whole Bernie Madoff thing behind her agency by hiring someone who might actually be able to spot fraud, is turning her attention to proxy contests. While she wants to make it easier for investors to get their director nominees on a company's ballot, she also wants to make sure there's no "early and often" shenanigans.
"We want to ensure that the U.S. proxy voting system as a whole operates with the degree of reliability, accuracy, transparency and integrity that shareholders and companies have the right to expect," Schapiro said.
The SEC is considering corporate-governance reforms after shareholders said the financial crisis showed directors didn't adequately supervise risk-taking at banks and securities firms. Investors and companies have complained that SEC rules haven't kept pace with changes in proxy voting, and give groups of investors may too much sway in board elections.
Schapiro said the SEC will seek input from shareholders and corporations on ways to ensure vote counts are accurate. The agency also will ask about the role of so-called proxy advisory firms, which pension funds pay for advice on how they should cast their shares, she said.
See, it's not just that some investors are apparently casting more votes than they own shares. Schapiro has also cast a wary eye upon so-called "empty voting." Currently, borrowing shares to increase your say is totally legal, so if there's a proxy battle you want to screw with, you'd better get busy.
Schapiro Says SEC Reviewing Corporate Election, Advisory Firms [Bloomberg]