The “revolving door” between the high-priced hallways of Big Law and the Securities and Exchange Commission is a well-worn path, but under the current regime of Chairman Paul Atkins and his (likely) handpicked Director of the Division of Corporation Finance, James Moloney (pictured above), that door has been replaced with a high-speed express elevator for the elite.
For decades, the SEC was at least ostensibly tasked with maintaining a level playing field for all investors, ensuring that the “little guy” had at least a nominal voice in the boardrooms of the companies they own. Today, under the guise of “streamlining,” “reducing clutter,” and “fiduciary focus,” the Commission has been transformed into a private concierge service for the world’s most powerful corporations and their ideological allies in the labor union and “socially responsible” investment complex.
The latest evidence of this systemic rot is the blatant, unvarnished double standard regarding access to the SEC’s EDGAR reporting system. In a move that can only be described as a strategic silencing of the populist right and small-scale transparency advocates, Moloney’s division recently slammed the door shut on any shareholder holding less than $5 million in company stock who wishes to file a voluntary Notice of Exempt Solicitation on EDGAR. The justification for this decision and other similar ones is that the system was being bogged down by “immaterial” filings from “publicity-seeking” small actors. But as we have noted at NLPC, this is nothing more than a protection racket for woke corporate boards and the millionaires who love them.
If the SEC were truly concerned about “clutter” or the “politicization” of the proxy process, one would expect this $5 million gate to apply to everyone. Instead, we are witnessing a curated, one-sided conversation where only the “correct” kind of activism is permitted on EDGAR. Case in point: today’s filings regarding Starbucks Corporation. While small shareholders who might wish to challenge Starbucks’s drift into left-wing social engineering or its dangerous dependencies on Communist China are barred from the platform unless they can cough up $5 million in equity, a cabal of New York government officials and labor union activists are currently using EDGAR as their personal megaphone—and they aren’t just using it; they are abusing it by spamming the system with duplicate filings.
A look at the recent filings for Starbucks reveals a coordinated effort that makes a mockery of the SEC’s “anti-clutter” narrative. Leading this charge is New York State Comptroller Thomas DiNapoli, a man who has made a career out of using the retirement security of New York’s public employees to play political games with private companies. DiNapoli, acting as the sole trustee of the New York State Common Retirement Fund, didn’t just file a notice; he joined a pack. We now see duplicate and even triplicate notices of exempt solicitation filed for the exact same purpose by different members of the same woke cabal.
The New York City Comptroller’s office—now under the leadership of Mark Levine, who has seamlessly picked up the radical baton from his predecessor—filed its own version. Then came Trillium Asset Management, a boutique firm that specializes in “ESG” (Environmental, Social, and Governance) posturing. Each of these entities filed essentially the same report, badgering Starbucks over its labor practices and demanding the removal of board members who haven’t bowed low enough to the “Starbucks Workers United” union.
If the SEC’s concern was “clutter,” why are they allowing three different entities to post the same 20-page document for the same company? The answer is simple: The SEC isn’t filtering for “clutter” or “quality.” They are filtering for wealth and ideology.
This is the very definition of the “agenda-driven” filing that Chairman Atkins claims to despise. These filings are not about maximizing shareholder value; they are about using the machinery of the federal government to advance a pro-union, anti-management narrative that serves the political ambitions of New York’s ruling class. Yet, because DiNapoli and Levine sit on billions of dollars in assets—much of it forcibly extracted from the paychecks of public employees, most who likely disagree with this woke posturing—they are granted a VIP pass to the EDGAR system. They can post the same politicized garbage three times over, creating the very “clutter” Moloney and Atkins claim to be fighting, while the NLPC is told to sit in the corner and be quiet.
The cynicism here is breathtaking. James Moloney spent twenty-five years at Gibson, Dunn & Crutcher, where his job was to protect the biggest corporations in the world from being held accountable by their owners. He was a top architect of the firm’s “no-action” letter strategy, who corporate CEOs called when they wanted to silence a pesky shareholder proposal. Now, he has moved from the private sector to the public sector to finish the job. By enforcing the $5 million threshold while excluding access for smaller investors like NLPC, he hasn’t just limited “clutter”; he has effectively immunized his former clients from the most effective tool of the small shareholder: the ability to cheaply and widely disseminate an opposing view.
When Moloney was at Gibson Dunn, his team represented the likes of Amazon, Hewlett-Packard, and Intel—companies that have pioneered the very “woke” governance structures that the Atkins SEC now seeks to protect. It is a brilliant, if nefarious, strategy: The SEC “bows out” as a referee, allowing corporations to exclude shareholder proposals with impunity, while simultaneously raising a financial wall around the only remaining alternative for communication, the exempt solicitation.
The result is a closed loop. The “woke” corporations and their “woke” institutional investor allies, like Thomas DiNapoli and the New York State Common Retirement Fund, are allowed to talk to each other through the SEC’s official channels, while the actual owners of the company—the retail investors and principled advocates for corporate integrity—are left shouting from the sidewalk. This isn’t regulation; it’s a security system for the henhouse, designed by the very fox who used to charge by the hour to break in.
If Atkins and Moloney were serious about fiduciary duty, they would recognize that the Starbucks filing by DiNapoli and his cabal is a textbook example of political theater. It is a misuse of pensioner assets to pursue a labor agenda that has more to do with the next election cycle in Albany than it does with the long-term health of Starbucks. DiNapoli’s rhetoric about “failed labor relations” is a thinly veiled attempt to force Starbucks into a collective bargaining agreement that the workers themselves have not yet ratified, while the vast majority (by an enormous margin) of company stores are not unionized. (NLPC presented its own workers’ rights proposal at last year’s Starbucks annual meeting).
But in the new SEC, “fiduciary duty” is simply code for “don’t bother the big guys—unless you’re a big guy yourself.”
We are told that this SEC is a return to “traditional” values and “limited” government. In reality, it is the birth of a new kind of corporatism where the regulatory machinery is wielded as a weapon to protect the status quo. The $5-million paywall is a slap in the face to every American who believes in shareholder democracy. It is time to call this policy what it is: a manifest unfairness that serves only the interests of the powerful and the woke. While small shareholders are told their concerns about corporate DEI excesses are “immaterial,” DiNapoli is given free rein to dump his political manifestos onto EDGAR three times over as official “Notice of Exempt Solicitation” material.
The SEC’s role is to ensure markets are fair, orderly, and efficient. There is nothing fair about a $5-million gate. There is nothing orderly about allowing multiple, politicized filings from government bureaucrats. And there is certainly nothing efficient about a system that ignores the legitimate oversight concerns of small investors while facilitating the political grandstanding of the New York State Comptroller.
Moloney has effectively created a pay-to-play system for free speech. If you are a billionaire activist or a government-managed pension fund with a political axe to grind, the SEC will happily host your grievances on its official platform. If you are a common-sense investor trying to steer a company away from ruinous social engineering, you are told to go start a blog and stay off the grown-ups’ playground.
