Suddenly big business wants to get close to shareholders. A fight has broken out with the Business Roundtable, which represents big time CEOs, calling on the Securities & Exchange Commission to force brokers to provide the names of shareholders, most of whom keep their holdings in "street names'' registered to their bank or broking house. And they do that to remain anonymous.
Business says it's about ensuring smoother communications with company owners. Yeah right, say the institutions and brokers. They claim business is just trying to find another way to stymie activism and stop shareholders having a say in the running of the company.
The Business Law Prof Blog correctly points out that corporations should have no legal right to these names because the relationship between broker and individual investor is a matter of contract. The two parties should be able to do as they please. If investors want corporations to have their names, it's up to them to provide it. But at the same time, it's up to the individual to decide whether or not the brokerage can vote their shares. That's something that many brokers don't seem to appreciate.
Should brokers be allowed to cast the proxies of shareholders who don't vote? Should companies be given a hot line to investors? Or is it only fair that investors be allowed to stay inside the "street names"?
no comment untill now