Iowa Attorney General Brenna Bird Sues Proxy Advisor Firm for Lying to Iowa Investors and Endangering Retirement Savings Accounts

DES MOINES—Iowa Attorney General Brenna Bird is suing the world’s largest proxy advisor firm Institutional Shareholder Services Inc. (ISS), for abusing its influence over shareholders and lying to Iowa investors — threatening Iowans’ retirement savings by promising objective advice while secretly pushing an undisclosed woke agenda.  

“Iowans expected sound, objective financial advice and voting from the world’s largest proxy advisor. Instead, they got deceived into advancing a woke agenda untested against real financial standards,” said Attorney General Bird. “These advisors must give advice that protects Iowans’ retirement accounts and pensions — not advance their own political agenda. This lawsuit is about holding them accountable and restoring affected Iowans.”   

ISS falsely advertised its services as objective, while it was actually working with woke activist groups like Climate Action 100+, Ceres, and The Children’s Investment Fund to shape recommendations without telling their clients. 

ISS secretly included woke environmental, social, governance (ESG) mandates in its main benchmark advice, misleading clients who expected objective recommendations. ISS’s owners, Deutsche Börse AG and General Atlantic, are also committed ESG activists, creating undisclosed conflicts of interest. 

Instead of determining financial impact or how products would affect shareholder value or company performance, ISS solely used ESG metrics and adopted broad ESG policies in its main products.  

The lawsuit asserts:  

The lawsuit follows wider national concerns about proxy advisers like ISS, with U.S. officials and financial leaders criticizing the firm’s influence and conflicts of interest.   

Additionally, the following states have formed a “Multistate Proxy Advisor Coalition” to coordinate efforts and act as a unified front against what they call widespread harm from ISS’ practices: Alabama, Alaska, Florida, Indiana, Iowa, Kansas, Kentucky, Nebraska, Missouri, Montana, South Carolina, South Dakota, Tennessee, Texas, Utah, and West Virginia.  Iowa’s lawsuit filed today alongside filings by Nebraska, West Virginia, and Texas is the coalition taking further action following Florida’s earlier lawsuit against ISS in November. 

Read the petition here.  

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For More Information:

Contact: Jen Green | jen.green@ag.iowa.gov