is coming out of its corner supporting the SEC proxy disclosure rules with swinging fists. "Most fund firms act like disclosing how they vote is a secret, even though it is the shareholders' money," Thomas "Tim" Grant
, president, Pax World Funds, told reporters today in a press briefing.
Grant made his comments as part of the rollout of PaxWorld's new Web site (MutualFundProxyVotes.com
) that is intended to give fund shareholders a voice during the public comment period on the SEC's proposed proxy voting disclosure rules. He was also unafraid to take a stand against his industry peers. "Shareholders have a right to know how their funds vote on matters of workers rights, gender discrimination, the environment, and excessive executive compensation," he argued.
"This is not a popular rule in the industry," he said. "They [fund firms] will do what they can behind the scenes to kill the proposal, or water it down. That is why Pax World put together this site," he explained. Grant dismissed arguments that providing the information is too complicated for fund firms to do. "This type of reporting can be done easily by mutual funds, I know that because PaxWorld already provides it," he said. PaxWorld has told shareholders of its proxy votes since 1971.
"The data already exists and the Web is a simple way to disclose it. Why it may be simplistic to call it a no brainer, it does not require a rocket scientist," concluded Grant. He added that withholding the information is "the wrong way to do business."
Michael I. Garland
, corporate transactions coordinator, AFL-CIO Office of Investment also weighed used the briefing to outline the union's reason for supporting the rule and to make Fidelity Investments its primary example in front of the media. Garland handed reporters a litany of examples of conflicts naming Fidelity specifically. He said that the Boston Behemoth apparently voted its proxies to reelect Enron's Frank Savage to the Lockheed Martin board of directors. He added that Fidelity also is thought to have voted in support of Ingersoll-Rand, Neighbors Industries and Tyco reincorporating in Bermuda to avoid US taxes. "We can't confirm how Fidelity voted since it refused to disclose," said Garland.
He argued that Fidelity's deep ties to corporate America through its retirement plan business is a conflict of interest on par with the conflicts that brought Wall Street analysts into the headline. He noted that Fidelity is a co-fiduciary of the pension funds sponsored by Ingersoll-Rand.
, founder of Fund Democracy, was also part of the briefing. He noted that Fidelity has the opportunity as the largest fund manager to set a positive example for the rest of the industry. "So far, they have been one of the strongest voices against the rules," he said.
Bullard also revealed that Fund Democracy today submitted a brief (see here
) in support of the new rules to the SEC. Bullard also explained that those in the fund industry who argue that shareholders are not seeking these reforms are missing the mark. "No regulatory reforms have been caused by marches in the streets," he said. "Shareholders use information providers and third-party information providers to make their decisions. Those providers are the ones who will ferret out this information. That is really how the information gets out there."
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