Business Groups File Lawsuit Against SEC

Two national business groups have gone to court to challenge the new Securities and Exchange Commission (SEC) proxy access rule.

Filing the challenge with the U.S. Court of Appeals for the District of Columbia Circuit were the U.S. Chamber of Commerce and the Business Roundtable.  The groups charged in the court document that the rule is arbitrary and capricious, violates the Administrative Procedure Act, and that the SEC failed to properly assess the rule’s effects on “efficiency, competition and capital formation.”

Specifically, the groups are accusing the SEC of having:

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  • Erred in judging the costs that proxy access would impose;
  • Ignored evidence and studies highlighting the adverse consequences of proxy access, including that activist shareholders would use the rule as leverage to further their special interest agendas; and
  • Not adequately considering state laws regarding access to the proxy and related principles.

“The SEC’s proxy access rule empowers unions and other special interests at the expense of the vast majority of retail shareholders,” said David Hirschmann, president and CEO of the U.S. Chamber’s Center for Capital Markets Competitiveness, in the news release. “This special interest-driven rule will give small groups of special interest activist investors significant leverage over a business’ activities. This will undermine a company’s ability to grow and create jobs.”

The SEC proxy access rule requires a corporation to include in its proxy materials director nominees put forward by a shareholder (or group of shareholders) who have owned 3% or more of company stock for at least three years (see SEC Beefs up Proxy Access Regs).  

The business groups’ court petition is at http://www.uschamber.com/sites/default/files/files/1009uscc_sec.pdf.

Study Finds Retirement Dreams Shattered

Many older Americans who are approaching or who have passed the traditional retirement age of 65 are decidedly pessimistic about their short- and long-term financial future, especially as it relates to their ability to retire.

Research from The Hartford Financial Services Group, Inc. found that many pre-retirees polled say they have “no idea” as to when they can retire (28.3% for ages 60-69 and 33.3% for age 70 and older), and a significant percentage (36%) of those ages 60-69 believe they will have to postpone retirement for up to two years or more. 

With nearly nine in 10 people in their 60s expressing concerns about having enough money in retirement, more than half (55.4%) plan to work longer and put off retirement or work part time during retirement. Nearly half of those age 70 and older (44.4 %) said the same.    

Respondents say the market and economic dislocation has prompted them to reduce their standard of living or reduce expenses (63.1 % for ages 60-69 and 66.6% for ages 70 and older). Three in four people in their 60s say their number one financial priority in retirement is simply keeping up with daily expenses.

A significant percentage of survey respondents (17.4% for ages 60-69; 33.3% for age 70 and older) say they never plan to retire.   

The survey found those in their 60s worry most about a significant health event or problem (33.7%), with outliving their money (26.1%) coming in second. Respondents age 70 and older say their biggest concern is outliving their money, followed by losing their buying power to inflation (22.3%) and losing money in the financial markets (22.1%).

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