Just ten days after SEC Chair Paul S. Atkins delivered a speech indicating that an SEC priority is the de-politicizing of shareholder meetings (see HERE), on December 11, 2025, the White House issued an executive order entitled “Protecting American Investors Form Foreign-Owned and Politically Motivated Proxy Advisors” (the “Order”). The Order directs action by the SEC, Federal Trade Commission and Department of Labor.
Background
In July 2020 the SEC adopted amendments to change the definition of “solicitation” in Exchange Act Rule 14a-1(l) to specifically include proxy advice subject to certain exceptions, provide additional examples for compliance with the anti-fraud provisions in Rule 14a-9, and amended Rule 14a-2(b) to specifically exempt proxy voting advice businesses from the filing and information requirements of the federal proxy rules. On the same day, the SEC issued updated guidance on the new rules. See HERE for more information on the 2020 rules.
The rules were controversial (as are all proxy related rules) and on June 1, 2021, the SEC Division of Corporation Finance issued a public statement that it would not recommend enforcement action based on the 2020 Rule Amendments.
Subsequently on July 13, 2022, the SEC adopted amendments to the rules governing proxy voting advice, in essence undoing material provisions in the new rules that had been adopted in July 2020. The 2022 amendments rescinded two of the rules adopted in 2020 and specifically, the conditions to the availability of two exemptions from the proxy rules’ information and filing requirements on which proxy voting advice businesses could rely. The amendments also deleted the 2020 changes made to the proxy rules’ liability provision. For more on the 2022 amendments see HERE.
New Executive Order
The Order starts with pointing out that “[U]nbeknownst to many Americans, two foreign-owned proxy advisors, Institutional Shareholder Services Inc. and Glass, Lewis & Co., LLC, play a significant role in shaping the policies and priorities of America’s largest companies through the shareholder voting process.” Institutional Shareholder Services Inc. (ISS) and Glass, Lewis & Co., LLC (Glass Lewis) control in excess of 90% of the proxy advisory market, advising mutual funds, exchange traded funds, and other managed accounts how to vote the enormous number of shares they control on behalf of the investing public.
The Order continues that “[T]hese proxy advisors regularly use their substantial power to advance and prioritize radical politically-motivated agendas — like “diversity, equity, and inclusion” and “environmental, social, and governance” — even though investor returns should be the only priority.” The government has significant concerns about the value of their advice and underlying conflicts of interest.
As a result, the Order requires the SEC to review all rules, regulations, guidance, bulletins, and memoranda relating to proxy advisors. Further the SEC is required to consider revising or rescinding those rules, regulations, guidance, bulletins, and memoranda that are inconsistent with the purpose of this order, especially to the extent that they implicate “diversity, equity, and inclusion” and “environmental, social, and governance” policies.
Moreover, the SEC is directed to consider: (i) whether proxy advisory firms should be required to register as investment advisors; (ii) requiring proxy advisory firms to provide increased disclosure related to their recommendations; (iii) consider whether proxy advisory firms act as a “group” with their clients for purposes of Section 13; and (iv) consider whether the use of proxy advisory firms by investment advisors to push “diversity, equity, and inclusion” and “environmental, social, and governance” factors, is inconsistent with their fiduciary duties. For more on Section 13 including the definition of a “group” see HERE and HERE.
The Order also directs the Federal Trade Commission (FTC) to: (i) consider whether proxy advisory firms violate the Federal antitrust law; (ii) investigate whether proxy advisors engage in unfair methods of competition or unfair or deceptive acts or practices that harm United States consumers by: (a) conspiring or colluding, explicitly or implicitly, to diminish the value of consumer investments (including pensions and retirement accounts); (b) failing to adequately disclose conflicts of interest; (c) providing misleading or inaccurate information; (d) undermining the ability of consumers to make informed choices; or (e) otherwise violate the antitrust laws.
The Order directs the Secretary of Labor to take steps to revise all regulations and guidance regarding the fiduciary status of individuals who manage, or, like proxy advisors, advise those who manage, the rights appurtenant to shares held by plans covered under the Employee Retirement Income Security Act of 1974 (ERISA). Specifically, the Order requires that the Secretary of Labor consider amendments to specify that any individual who has a relationship of trust and confidence with their client, including any proxy advisor, and who provides advice for a fee or other compensation, direct or indirect, with respect to the exercise of the rights appurtenant to shares held by ERISA plans, is an investment advice fiduciary under ERISA.
JP Morgan Drops ISS and Glass Lewis
In the first week of January 2026, JP Morgan’s asset management group announced that it would immediately stop using proxy advisory firms (i.e. ISS and Glass Lewis) and instead use an internal AI-powered platform to analyze data from the more than 3,000 shareholder meetings it votes at each year. The new system will provide recommendations to portfolio managers and manage votes.
This change is significant. Public companies should reconsider the tone and content of all proxies, drafting for the AI bots that will be reading and analyzing their content, rather than human readers with special interest perspectives.
The Author
Laura Anthony, Esq.
Founding Partner
Anthony, Linder & Cacomanolis
A Corporate and Securities Law Firm
Securities attorney Laura Anthony and her experienced legal team provide ongoing corporate counsel to small and mid-size private companies, public companies as well as private companies going public on the Nasdaq, NYSE American or over-the-counter market, such as the OTCQB and OTCQX. For more than two decades Anthony, Linder & Cacomanolis, PLLC has served clients providing fast, personalized, cutting-edge legal service. The firm’s reputation and relationships provide invaluable resources to clients including introductions to investment bankers, broker-dealers, institutional investors and other strategic alliances. The firm’s focus includes, but is not limited to, compliance with the Securities Act of 1933 offer sale and registration requirements, including private placement transactions under Regulation D and Regulation S and PIPE Transactions, securities token offerings and initial coin offerings, Regulation A/A+ offerings, as well as registration statements on Forms S-1, S-3, S-8 and merger registrations on Form S-4; compliance with the Securities Exchange Act of 1934, including registration on Form 10, reporting on Forms 10-Q, 10-K and 8-K, and 14C Information and 14A Proxy Statements; all forms of going public transactions; mergers and acquisitions including both reverse mergers and forward mergers; applications to and compliance with the corporate governance requirements of securities exchanges including Nasdaq and NYSE American; general corporate; and general contract and business transactions. Ms. Anthony and her firm represent both target and acquiring companies in merger and acquisition transactions, including the preparation of transaction documents such as merger agreements, share exchange agreements, stock purchase agreements, asset purchase agreements and reorganization agreements. The ALC legal team assists Pubcos in complying with the requirements of federal and state securities laws and SROs such as FINRA for 15c2-11 applications, corporate name changes, reverse and forward splits and changes of domicile. Ms. Anthony is also the author of SecuritiesLawBlog.com, the small-cap and middle market’s top source for industry news, and the producer and host of LawCast.com, Corporate Finance in Focus. In addition to many other major metropolitan areas, the firm currently represents clients in New York, Los Angeles, Miami, Boca Raton, West Palm Beach, Atlanta, Phoenix, Scottsdale, Charlotte, Cincinnati, Cleveland, Washington, D.C., Denver, Tampa, Detroit and Dallas.
Ms. Anthony is a member of various professional organizations including the Crowdfunding Professional Association (CfPA), Palm Beach County Bar Association, the Florida Bar Association, the American Bar Association and the ABA committees on Federal Securities Regulations and Private Equity and Venture Capital. She is a supporter of several community charities including the American Red Cross for Palm Beach and Martin Counties, Susan Komen Foundation, Opportunity, Inc., New Hope Charities, the Society of the Four Arts, the Norton Museum of Art, Palm Beach County Zoo Society, the Kravis Center for the Performing Arts and several others.
Ms. Anthony is an honors graduate from Florida State University College of Law and has been practicing law since 1993.
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