January 16, 2006
The issue of whether to go electronic or paper is a moot subject if a Proxy Vote means nothing to begin with. During a November 30, 2005 NASAA Public Forum the NASD and NYSE admitted that the one share one vote rule was not being applied by the industry. Votes were being distributed to non-beneficial holders and then all votes were then averaged out to achieve the finite number allowed.
The SEC must first address the value and the rightful owners of a Proxy and then decide whether to take it electronic. The individual investors today are locked out of this process and know little about it.
Today large Institutions buy up stock and then loan out those shares for profit. These same Institutions vote the shares they loaned out flooding the process with illegal votes. It is a process repeated over and over and a process that minimizes shareholder rights. It is against the law but is overlooked by the Regulatory agencies.
This effort should be scrapped based on the extensive concerns over those who would not have internet access and a refocus should be placed on the overall Proxy process. Today businesses are spending considerable cash to send out Proxies while the Industry illegally handles the voting rights.