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December 9, 2019

The SEC and Justice Department Should Investigate Allegations That Fraudulent Comment Letters Were Submitted in Support of Recent Rule Proposals Favoring Vested Corporate Interests

Monday, December 9, 2019
Contact:  Christopher Elliott, 202-618-6433,

Washington, D.C.  –  Stephen W. Hall, Legal Director and Securities Specialist for Better Markets, issued the following statement after Better Markets called upon the Securities and Exchange Commission (“SEC”) and the Department of Justice (“DOJ”) to investigate allegations that dozens of fraudulent or misleading comment letters were submitted to and relied upon by the SEC in connection with two important rule proposals released last month:

“Recent reports show that dozens of phony comment letters were filed with the SEC to sway the agency in favor of two rule proposals that would protect vested corporate interests and make it even more difficult for shareholders to have their voices heard in the proxy voting process.  That process is what ultimately determines how public companies are governed.

According to these reports, several people denied ever signing the letters that bore their names; several people were persuaded to sign their letters without any understanding of the issues; and numerous signers had close but undisclosed connections to an advocacy group actually funded by corporate supporters of the proposals. 

The clear purpose of those comment letters was to convey the impression that the proposals were supported by everyday investors, not only by large corporate interests, their boards, and their trade association allies.  And it seems to have worked, since SEC Chairman Clayton himself highlighted seven of the letters as persuasive when he voted in favor of the proposals.

If these allegations prove to be true, then the rulemaking process for these two proposals has been horribly corrupted.  That’s not the way agencies are supposed to fashion rules in the public interest.  Yet, it’s become a growing problem, not only at the SEC, but at other agencies as well. 

That’s why Better Markets has sent the SEC and the DOJ letters urging them to conduct thorough, speedy, and transparent investigations into the matter, to repair the rulemaking record, hold those responsible accountable, and develop long-term measures that can detect and deter such abuses in the future. 

In addition, we’ve brought these disturbing developments to the attention of other regulators and policymakers for appropriate action, including the Board of Governors of the Federal Reserve; the Commodity Futures Trading Commission; the Consumer Financial Protection Bureau; the Federal Deposit Insurance Corp.; the Office of the Comptroller of the Currency; Rep. Maxine Waters (D-CA) and Rep. Patrick McHenry (R-NC), Chair and Ranking Member, respectively, of the U.S. House Financial Services Committee; and Sen. Mike Crapo (R-ID) and Sen. Sherrod Brown, Chair and Ranking Member, respectively, of the U.S. Senate Banking Committee.


Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit

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