Right about now, there are a number of groups of people that are probably miffed about the news that five current and former employees of proxy solicitation company Georgeson have had criminal charges against them, for "conspiring to defraud a proxy advisory firm as well as Georgeson’s own clients." Georgeson management, for one. Clients of Georgeson who unknowingly benefitted from the bribes that they were billed for, for another. CLIENTS OF GEORGESON WHO WERE BILLED FOR THE BRIBES BUT DIDN'T RECEIVE JACK IN RETURN, for a third.
The complaint alleges that the current and former employees of Georgeson paid bribes to a former employee of Institutional Shareholder Services Inc., the country’s largest proxy-advisory firm, in exchange for confidential information on how ISS clients had voted on certain shareholder proposals. The Georgeson group then allegedly billed their own firm’s clients for some of the bribes, passing them off as legitimate expenses of the firm. The bribes were usually in the form of tickets to concerts and games...Mr. Sedlak, who left Georgeson in 2012, would obtain voting information from Mr. Bennett, sometimes at the behest of the others charged, and forward it to them and others at his firm, according to the complaint. The information was then allegedly provided to Georgeson’s clients. Mr. Sedlak allegedly expensed tickets for various sporting events, including $1,400 for two tickets to a 2010 basketball game between the Miami Heat and the Boston Celtics. His colleagues then billed clients for the bribes, describing the costs as courier services or travel expenses, according to the complaint. Not all the firm’s clients who received falsified invoices were beneficiaries of the confidential information.