Shareholder Services Settles for $300,000

WASHINGTON (CN) – Institutional Shareholder Services will pay $300,000 to settle an SEC complaint about an employee who took bribes to tell a proxy solicitor how institutional clients were voting their proxy ballots, the SEC said.
     The SEC said in its cease and desist order: “From approximately 2007 through early 2012, an ISS employee (‘the ISS Employee’) provided information to a proxy solicitor concerning how more than 100 of ISS’ institutional shareholder advisory clients (i.e., institutional investment managers) were voting their proxy ballots. In exchange for vote information, the proxy solicitor gave the ISS Employee meals, expensive tickets to concerts and sporting events, and an airline ticket. The ISS Employee, who had access to all of ISS’ clients’ proxy voting information, gathered the information by logging into ISS’ voting website from home or work and used his personal email account to communicate voting information to the proxy solicitor.
     “The ISS Employee’s breach was made possible in part by ISS’ failure to establish or enforce written policies and procedures reasonably designed, taking into consideration the nature of ISS’ business, to prevent the misuse of material, non-public information by ISS and its associated persons.”
     The employee no longer works at ISS, the SEC said.
     ISS must hire an “independent compliance consultant” and promise not to do it again but as is customary with SEC orders, need not admit it did anything wrong in the first place.

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