Florida Attorney General James Uthmeier has filed a sweeping enforcement action against Institutional Shareholder Services (ISS) and Glass, Lewis & Co. (Glass Lewis), accusing the world’s two largest proxy-advisory firms of misleading investors, abusing their market dominance, and promoting an ideological agenda under the guise of neutral corporate-governance guidance.
In the complaint, filed on Monday, the state alleges that both firms violated Florida’s consumer-protection and antitrust laws by coordinating their services, restricting meaningful market choice, and issuing voting recommendations that prioritised environmental, social and governance (ESG) objectives over financial performance.
“Florida will no longer allow two unaccountable, foreign-owned companies to manipulate shareholder votes behind closed doors,” Uthmeier said in a statement. “ISS and Glass Lewis present themselves as impartial advisers, yet they use their near-monopoly to advance divisive political mandates that jeopardise retiree savings and distort corporate governance. That stops now.”
Together, ISS and Glass Lewis control almost the entire proxy-advisory market and are relied upon by pension funds, institutional investors and more than one million Florida retirement beneficiaries. The lawsuit claims the firms reassured clients that their guidance was objective, yet infused “controversial ESG demands” into most recommendations, including climate-related directives and race- and gender-based policies that could expose companies to legal or financial risks.
The complaint further alleges that the two firms acted “in lockstep”, standardising their products and limiting options available to consumers. It also accuses them of making material omissions, promoting actions that may conflict with federal law while asserting that their recommendations upheld good governance standards.
The action follows recent criticism from President Donald Trump, who has warned against the growing influence of proxy-advisory firms and accused them of prioritising political goals over shareholder value.
Florida’s suit seeks civil penalties, injunctive relief, restitution for affected consumers and measures to prevent ISS and Glass Lewis from engaging in what the state describes as deceptive, anticompetitive practices that disproportionately affect retirees and other vulnerable investors.
