SEC Seeks Court Order to Compel ISS to Produce Proxy Voting Records

The U.S. Securities and Exchange Commission on Sept. 4, 2026, filed a subpoena-enforcement action in the Eastern District of Pennsylvania, escalating a dispute with Institutional Shareholder Services after the proxy adviser declined to fully comply with an administrative subpoena issued July 21, 2026. The subpoena stems from an SEC examination that began in March and is aimed at obtaining what the agency describes as core operational materials. The SEC is asking a federal judge to compel ISS to turn over documents tied to its proxy voting business, including voting recommendations, internal methodologies used to generate those recommendations, and compliance records. ISS has resisted producing certain items, contending that full compliance could infringe its First Amendment rights. The firm also argues that disclosing detailed information related to client voting could expose ISS and its clients to retaliation in contentious corporate voting situations. The agency's request targets a major player in the proxy advisory industry. ISS and its primary rival, Glass Lewis, account for roughly 90% of the market. Their recommendations on matters such as executive pay, director elections, and mergers can influence shareholder voting outcomes across institutions that collectively manage trillions of dollars. The SEC says its inquiry focuses on whether ISS has operated in compliance with federal securities laws in its role as a registered investment adviser. A key emphasis is the methodology behind ISS's recommendations, an area proxy advisers typically treat as highly proprietary. ISS has provided some information to the SEC but has withheld other materials, citing two core concerns: that its recommendations are protected speech, and that revealing sensitive client voting details could trigger backlash from companies displeased with the results. The SEC has framed the matter as a fact-finding investigation and has not accused ISS of wrongdoing. ISS has previously faced SEC scrutiny. In 2013, the firm paid a $300,000 penalty to settle charges that it failed to maintain adequate safeguards for client proxy voting information. Regulatory attention on proxy advisory firms intensified during the Trump administration, fueled in part by corporate lobbying groups that argue ISS and Glass Lewis exert outsized influence over shareholder votes. Public companies have long complained that proxy advisers' positions—especially on executive compensation and environmental disclosures—can effectively outweigh management's preferences without sufficient accountability.