SEC Should Bar No-Vote Share Structures, Committee Told

Law360, New York (March 9, 2017, 3:44 PM EST) -- The U.S. Securities and Exchange Commission should bar companies from issuing no-vote shares to the public as the tactic completely insulates executives from accountability, an SEC advisory committee heard Thursday, one week after Snapchat maker Snap Inc. boldly did so through a heavily publicized initial public offering.

Ken Bertsch, executive director for the advocacy group Council of Institutional Investors, said Snap’s strategy accelerates a “race to the bottom” among certain companies to limit or deny common shareholders’ voting rights. Bertsch contended that the interests of shareholders have suffered while U.S. stock exchanges have relaxed their rules on such matters for competitive...

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