SEC Rejects Proposal for Mandatory Shareholder Arbitration
12 Febbraio 2019 - 12:57AM
Dow Jones News
By Dave Michaels and Gabriel T. Rubin
WASHINGTON -- Johnson & Johnson Inc. won't have to hold a
shareholder vote that would have made the company a guinea pig for
a politically divisive fight over class-action lawsuits.
The Securities and Exchange Commission told J&J on Monday it
could choose not to hold a vote on a proposal to push all suits
brought against the company by its shareholders into private
arbitration hearings. The decision marks the first time during the
Trump administration that the SEC has ruled on the contentious
issue, which fractures along partisan lines and sometimes pits
corporate executives against their investors.
The SEC often plays the referee on divisive proposals that
proponents seek to advance at corporations' annual meetings.
Supporters of mandatory arbitration want the agency to let
companies require arbitration, saying it would be faster and less
expensive than grinding out disputes in court.
Many institutional investors, including public-sector pension
funds, say class-action access to the courts is vital for enforcing
investor-protection laws.
The SEC's staff on Monday said J&J could choose to not hold
a vote on the proposal because it would violate New Jersey state
law. New Jersey Attorney General Gurbir Grewal told the SEC last
month that mandatory arbitration would violate state law. J&J
is based in New Jersey.
J&J didn't immediately respond to a request for comment.
Hal Scott, a Harvard University professor who represents a trust
that owns J&J shares, filed the proposal in December. Mr. Scott
had told the SEC that New Jersey's attorney general relied on a
flawed and incomplete legal analysis.
Mr. Scott questioned why the New Jersey attorney general had
chosen to intervene and said that he was weighing his options as to
how to proceed, noting that he had the option to appeal the SEC
decision in court.
"I think it's sad that the SEC is not allowing shareholders of a
company to decide this issue," Mr. Scott said in an interview.
The decision allows SEC Chairman Jay Clayton to avoid an
extended fight over the issue. While many Republicans favor
mandatory arbitration, saying too many shareholder lawsuits are
without merit, Mr. Clayton has said he wants to avoid a brawl over
a subject that would pit business groups against investors and
likely splinter his agency along party lines. The SEC has four
commissioners and includes members from both Democratic and
Republican backgrounds.
"I continue to believe that any SEC policy decision on this
subject should be made by the commission in a measured and
deliberative manner," Mr. Clayton said in a statement, adding that
he supported the staff's decision.
In a letter last year to Rep. Carolyn Maloney (D., N.Y.), Mr.
Clayton said "this issue is not a priority for me" and warned that
an extended debate over it would "inevitably divert a
disproportionate share of the commission's resources" from other
more pressing issues.
Write to Dave Michaels at dave.michaels@wsj.com and Gabriel T.
Rubin at gabriel.rubin@wsj.com
(END) Dow Jones Newswires
February 11, 2019 18:42 ET (23:42 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Grafico Azioni Johnson and Johnson (NYSE:JNJ)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni Johnson and Johnson (NYSE:JNJ)
Storico
Da Apr 2023 a Apr 2024