WayBack Machine

Ten years ago in BusinessWeek calls governance activist investor Andrew Shapiro the Gary Cooper of corporate governance in their 5/29/2000 edition. I didn’t quite get the connection. Maybe its that Shapiro charisma or that frontier mystique with a worldly polish. Regardless of his relation to the film star, the article pointed out Shapiro’s bylaws, which he put in place at Quality Systems, are “fast becoming a template for other investors looking to create change.”

Following the lead of Domini Social Investments, Calvert’s new fund has announced it will post its proxy votes starting in 2001.

Preliminary results reported by IRRC (4/21) indicate that 12.7% of First Union shareholders voted to require the nominating committee to nominate two candidates for each board position. The resolution also called for statements by candidates on why they believe they should be elected were also to be included with future proxies.

Five years ago in EBSA, which enforces the Employee Retirement Income Security Act (ERISA), closed 4,399 civil investigations in FY 2004, with nearly 7 in 10 of those producing corrected ERISA violations. Criminal investigations led to the indictment of 121 people in 205 cases and the recovery of $5.6 million. The agency prosecuted wrongdoers under criminal statutes governing theft or embezzlement from employee benefit plans, lying on ERISA-required documents, as well as offering, accepting, or soliciting a bribe in order to influence the operations of an employee benefit plan. EBSA listed six key fiduciary violations:

  • failing to operate a plan prudently and for the exclusive benefit of participants;
  • using plan assets to benefit certain related parties;
  • failing to value plan assets properly at their current fair market value or to hold assets in trust;
  • failing to make benefit payments due under the terms of the plan;
  • taking adverse action against an individual for exercising his or her rights against the plan;
  • failing to offer continuing group health-care coverage for at least 18 months after a worker leaves the company.

Public customers of securities brokerage firms are required to agree to arbitrate disputes using specified forums. Drawing on 30 years of experience serving as an NASD arbitrator and as legal counsel for either claimants or respondents, Les Greenberg recently filed a Petition for Rulemaking (File No. 4-502) that seeks to level the playing field. The Petition requests the creation of rules designed to:

  • specifically permit arbitration panel members, should they elect to do so, to conduct legal research, or, in the alternative, forbid Self-Regulatory Organization (“SRO”) sponsored arbitration forums from restricting arbitrators from conducting legal research;
  • abolish the requirement that a securities industry arbitrator be assigned to each three person panel hearing customer disputes or, in the alternative, require that information presented to a panel of arbitrators by a securities industry arbitrator be revealed to the parties during open hearing;
  • require SROs to conduct continuing evaluations of the ability of every arbitrator on their panels to perform his/her duties, including, but not limited to mandatory peer evaluations;
  • require SROs to train arbitrators in applicable law;
  • require SROs to reveal in pre-dispute arbitration agreements whether their arbitrators are required to follow the law in their decision-making process, the training of their arbitrators in the law, and their process, if any, to evaluate their arbitrators on a continuing basis; and,
  • require the SEC’s Division of Market Regulation to specifically oversee SROs to determine whether they are in compliance with rules adopted pursuant to items (1) through (5), inclusive.

Majority Vote Momentum Grows. Proposals won 57% support at Raytheon, 52% at Freeport McMoRan Copper & Gold Inc., 51% at Federal Realty Investment Trust, 46% at Motorola Inc., 45% at Bristol-Myers Squibb Co., 43% at Verizon Communications and 42% at General Growth Properties.


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