# SEC sues ISS over proxy advice disclosures amid regulatory crackdown Regulator demands documents as Trump administration tightens oversight of proxy advisory firms. - **Source:** [US Top News and Analysis](https://brifing.si/source/635540e9-943e-450d-ae52-ae0bfe3b67eb) - **Published:** 2026-09-06 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/53dcb84b-8fed-48ba-85ec-290bd2f44aaf ## Regulatory showdown begins The SEC filed a lawsuit against Institutional Shareholder Services (ISS) in Pennsylvania federal court, seeking to enforce a subpoena for documents about its proxy voting recommendations. This marks an escalation in the Trump administration's scrutiny of firms that advise institutional investors on shareholder votes. ISS controls a significant portion of the proxy advisory market alongside rival Glass Lewis. ## Timeline of the dispute The SEC's Division of Examinations began reviewing ISS in March 2020, requesting data on voting recommendations. After incomplete responses, the enforcement division issued a subpoena on July 21. Despite extended deadlines, ISS continues withholding some records, though no violations have been confirmed yet. The case remains in fact-finding stages as of the lawsuit filing. ## First Amendment concerns raised ISS argues the SEC's demands raise constitutional issues about free speech protections for its voting recommendations. The firm contends compliance could expose clients to retaliation for their voting positions. This legal argument adds complexity to what began as a routine regulatory request for information about ISS's advisory services. ## White House policy context President Trump's December 2019 executive order specifically targeted ISS and Glass Lewis, directing the SEC to review rules governing proxy advisers. The order cited their 90% market dominance and called for stricter oversight of potential conflicts of interest in shareholder voting recommendations. ## Market dominance at issue ISS and Glass Lewis collectively control over 90% of the proxy advisory market, giving them substantial influence over corporate governance decisions. Their recommendations shape votes on board elections, executive pay, and shareholder proposals at thousands of public companies annually. ## Regulatory stakes The SEC is seeking court enforcement of its subpoena to examine whether ISS violated securities laws. While currently focused on document production, the case could lead to new disclosure requirements for proxy advisers. The outcome may reshape how these firms operate and communicate with clients. ## Political dimensions Some observers suggest the administration's focus on proxy advisers reflects broader concerns about activist investors influencing corporate policies. The lawsuit comes amid debates about whether shareholder votes should address social issues beyond traditional financial metrics. ## Industry implications This enforcement action signals increased regulatory risk for the proxy advisory sector. Depending on the outcome, firms may face stricter compliance burdens or need to modify how they formulate and disclose voting recommendations to institutional investor clients. ## Sources covering this story - https://www.cnbc.com/2026/09/06/sec-iss-proxy-adviser-subpoena.html — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._