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March 14, 2013

Banks Block Shareholder Proposals on Breaking Up

Securities regulators sided with four of the nation’s largest banks in their efforts to fend off shareholder proposals to require J.P. Morgan Chase & Co., Bank of America, Citigroup and Morgan Stanley to consider splitting into smaller companies.

Submitted by labor and religious organizations and others, including the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) and the Benedictine Sisters of Mount St. Scholastica, the proposals urged the banks’ boards to create independent-director committees “to explore extraordinary transactions that could enhance stockholder value,” including breaking up the banks.

The proposals come amid persistent unease over the size of the country’s largest banks following the financial crisis. Some regulators and shareholders have expressed support for shrinking large banks, making them less complex and risky by separating trading and other capital-markets businesses from retail and business banking.

In letters to the four banks dated Tuesday, the Securities and Exchange Commission granted their requests to block the shareholder breakup proposals, effectively ending the breakup fight–for this year, at least.”

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Read full Wall Street Journal article here

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