SEC sues ISS over subpoena as scrutiny of proxy advisers grows

The U.S. Securities and Exchange Commission has filed a lawsuit against Institutional Shareholder Services, seeking to compel the proxy adviser to comply with an administrative subpoena. The SEC says it has not concluded that ISS violated securities laws and describes the matter as an ongoing factfinding review. The agency began reviewing ISS in March and later issued a subpoena after, it said, the company did not provide all requested information about its proxy recommendations and voting activity. ISS has argued that the request raises First Amendment concerns and could expose its clients to retaliation over their voting choices. The case comes as the Trump administration increases oversight of proxy advisers, firms that help institutional investors decide how to vote on issues such as board elections, pay packages, and shareholder proposals. A December executive order directed the SEC to review its rules and consider additional disclosure and enforcement measures.