H.R. 4098

119th CONGRESS 1st Session

To amend the Securities Exchange Act of 1934 to prohibit certain acts by proxy advisory firms, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES · June 24, 2025 · Sponsor: Mr. Fitzgerald · Committee: Committee on Financial Services

Table of contents

• H.R. 4098
  • SEC. 1. Short title
  • SEC. 2. Conduct of proxy advisory firms

SEC. 1. Short title

• This Act may be cited as the Stopping Proxy Advisor Racketeering Act.

SEC. 2. Conduct of proxy advisory firms

• The Securities Exchange Act of 1934 () is amended by inserting after section 14B the following: 15 U.S.C. 78a et seq.
  • (a) Prohibited conduct
    • It shall be unlawful for a proxy advisory firm to provide proxy voting advice if the proxy advisory firm possesses a conflict of interest, direct or indirect, including by—
      • providing consulting services offered directly or indirectly through an affiliate to a registrant;
      • modifying a voting recommendation or otherwise departing from the adopted systematic procedures and methodologies of the proxy advisory firm or affiliate for the provision of proxy voting advice based on whether a registrant, or affiliate of the registrant, subscribes or will subscribe to the services or products of the proxy advisory firm or any affiliate of the proxy advisory firm;
      • providing proxy voting advice during any period of time when the proxy advisory firm or any affiliate of the proxy advisory firm is providing stewardship or engagement services to a shareholder proponent, a non-issuer, a soliciting person, or affiliate of any of the foregoing related to the matter covered by the proxy voting advice; or
      • being a member of any organization that supports a shareholder-sponsored proposal that is, or is substantially the same subject matters as, the proxy voting advice.
  • (b) Administrative civil penalties available
    • If the Commission finds, after notice and opportunity for hearing in a proceeding instituted pursuant to section 21C, that a proxy advisory firm violated subsection (a), the Commission may, in addition to entering an order under section 21C, impose a civil penalty against the proxy advisory firm and any other person that the Commission finds was a cause of such violation. The determination to impose such a civil penalty and the amount of the penalty shall be governed by the standards set forth in section 21B.
  • (c) Definitions
    • In this section:
      • With respect to a proxy advisory firm or an affiliate of a proxy advisory firm, the term means— consulting services
      • The term means a person that markets the person’s expertise as a provider of proxy voting advice, separately from other forms of investment advice, and sells such proxy voting advice for a fee. proxy advisory firm
      • The term means any advice that makes a recommendation to a security holder as to the vote, consent, or authorization of the security holder on a specific matter for which the approval of the security holder is solicited. proxy voting advice
      • The term means the issuer of the securities in respect of which proxies are to be solicited. registrant