[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4098 Introduced in House (IH)]

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119th CONGRESS
  1st Session
                                H. R. 4098

 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

Mr. Fitzgerald introduced the following bill; which was referred to the 
                    Committee on Financial Services

_______________________________________________________________________

                                 A BILL


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

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 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 (15 U.S.C. 78a et seq.) is 
amended by inserting after section 14B the following:

``SEC. 14C. CONDUCT OF PROXY ADVISORY FIRMS.

    ``(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--
            ``(1) providing consulting services offered directly or 
        indirectly through an affiliate to a registrant;
            ``(2) 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;
            ``(3) 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
            ``(4) 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:
            ``(1) Consulting services.--With respect to a proxy 
        advisory firm or an affiliate of a proxy advisory firm, the 
        term `consulting services' means--
                    ``(A) providing any non-public information with 
                respect to a proxy advisory firm's polices or ratings 
                methodologies;
                    ``(B) any services designed to provide guidance or 
                advice regarding any corporate governance, 
                compensation, corporate social responsibility, 
                environmental, social, political, or other policies, 
                disclosures, or actions adopted by a registrant with 
                respect to--
                            ``(i) any matter--
                                    ``(I) for which security holder 
                                vote or consent is or will be 
                                solicited; and
                                    ``(II) as to which the proxy 
                                advisory firm makes or will make a 
                                recommendation as to a security 
                                holder's vote or consent; or
                            ``(ii) matters included in or covered by 
                        any written report or rating furnished by the 
                        proxy advisory firm; and
                    ``(C) such other services as the Commission may 
                determine.
            ``(2) Proxy advisory firm.--The term `proxy advisory firm' 
        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.
            ``(3) Proxy voting advice.--The term `proxy voting advice' 
        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.
            ``(4) Registrant.--The term `registrant' means the issuer 
        of the securities in respect of which proxies are to be 
        solicited.''.
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