On Wednesday, the U.S. Securities and Exchange Commission (SEC) released letters to four banks in which regulators agreed that the banks had “some basis” for rejecting proxy statements from union and religious organizations potentially calling for the dismantling of the banks themselves. The proposals would have permitted shareholders to request that the banks to establish committees to assess “extraordinary transactions,” Reuters noted.
Regulators noted that the language of the proposals was “vague and indefinite.” The SEC indicated that it will not compel the banks to include the proposals in upcoming shareholder votes.
The letters were sent to Citigroup (NYSE:C), Bank of America (NYSE:BAC), JPMorgan Chase (NYSE:JPM) and Morgan Stanley (NYSE:MS). A number of groups including the Benedictine Sisters of Mount St. Scholastica, the AFL-CIO and the American Federation of State, County and Municipal Employees had promoted the proxy votes through their investment arms.
In its proposal, the AFL-CIO noted the $6 billion lost by JPMorgan Chase last year resulting from a single rogue trader in London as evidence that the company had become so large management could not effectively control it.
Shares of Citigroup, Bank of American, JPMorgan Chase and Morgan Stanley rose fractionally in Thursday morning trading.