SEC Chair Is Concenred About Fee Shifting Corporate Bylaws
Today the Securities & Exchange Commission (SEC) Chair spoke about her concern over fee shifting bylaws. Many Delaware registered corporations (home to more than half of the corps in this country) are rewriting their bylaws to shift the costs of shareholder lawsuits onto the backs of shareholders who lose such cases. Chair Mary Jo White said this tactic essentially chills shareholders’ rights and must be closely watched.”
“I am concerned about any provision in the bylaws of a company that could inappropriately stifle shareholders’ ability to seek redress under the federal securities laws,” White said in prepared remarks for Tulane University Law School’s annual Corporate Law Institute.
As mentioned earlier this week in this blog, Plaintiff securities lawyers and many pension funds are mounting opposition to this unconscionable tactic and are watching the Delaware courts closely as well as lobbying the legislature for relief.
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