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Highlights BlackRock’s growing market power and its effect on American investors
WASHINGTON – The American Securities Association (ASA) sent a letter to the U.S. Securities and Exchange Commission (SEC) supporting its proposed rules to modernize the proxy advisory process in a way that improves the governance of public companies. In the letter, the ASA suggests that much closer scrutiny into BlackRock’s shareholder proposal & governance practices is warranted.
“Modernizing our corporate governance rules will mitigate the ability of special interests groups to hijack the proxy process and better protect and prioritize America’s investors and retirement savers,” said ASA CEO Chris Iacovella.
“BlackRock has become the poster child for using its market dominance—and the American people’s money—to advance its own political and social agenda. It’s time for regulators to take a closer look at whether this monopolistic behavior has begun to threaten the economic freedom of American investors.”
“We believe the horizontal control BlackRock and the mega-asset managers exert over the U.S. equity market should alarm the SEC, antitrust authorities at the Department of Justice, and the FSOC. Especially as it relates to the market power the firm exercises through its common ownership of publicly traded companies which silences the voices of America’s retail investors,” Iacovella wrote in the letter.
“Most Americans spend their working years saving diligently for retirement, to send their children to college, and/or to pass on their life’s work to their family,” Iacovella wrote. “They have absolutely no interest in fighting political or social battles through their 401k or other savings plans where entrusted fiduciaries are supposed to act in their best interest to grow and preserve their nest egg.”
“To be clear, there is hypocrisy at play here. The push from mega-asset managers to promote ‘societal’ goals and corporate responsibility through investment strategies seems to stop at our nation’s borders,” Iacovella wrote. “This oligopoly is more than willing to facilitate the flow of American investor money into countries like China, Russia, and Saudi Arabia who have a long history of human rights and environmental abuses. Where is the ‘corporate responsibility’ when it comes to these abuses? The reality is this oligopoly uses its market power when it’s convenient and turns a blind eye when it’s not.”
To read the full letter to the SEC, click here.
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ASA’s regional financial services companies work in communities across the country to create jobs, grow the economy, and increase prosperity for all Americans. The ASA exclusively represents the capital market and private client interests of its members and seeks to promote free market principles making it easier to access financial advice and capital. ASA members help Americans save for retirement, provide Main Street businesses with capital to grow, and advise hardworking Americans how to create and preserve wealth. For the latest updates follow @AmerSecurities and learn more at http://americansecurities.org/.