ADF to SEC: Don't let Wells Fargo, Charles Schwab dodge shareholders

ADF attorneys call on SEC to deny financial institutions’ evasive requests to exclude shareholder resolutions from 2024 proxy ballot

WASHINGTON – Alliance Defending Freedom attorneys sent two letters Friday to the U.S. Securities and Exchange Commission, calling on the agency to deny attempts from Wells Fargo and Charles Schwab to sidestep calls for transparency from their shareholders.

Rather than allowing shareholder resolutions to reach the respective proxy ballots for their upcoming annual meetings, both companies have asked the SEC for permission to exclude them. Wells Fargo is asking to exclude a proposal that calls for transparency into the risks of politicized de-banking, which was submitted by the American Conservative Values ETF. Meanwhile, Charles Schwab is seeking to withhold from the ballot a proposal from Inspire Global Hope ETF asking the corporation to issue a report evaluating its Diversity, Equity, and Inclusion policies and other policies that could contribute to workforce discrimination.

In separate letters, ADF attorneys called on the SEC to deny both requests and instead allow shareholders to consider the proposals on the respective 2024 proxy ballots. The SEC recently sided with ADF-backed shareholders who were similarly opposed by Apple, ruling against the corporation’s attempt to evade accountability for its subjective terms of use policies that allow for religious and political discrimination. The SEC also ruled in favor of ADF-backed shareholders at JPMorgan Chase and PayPal in 2023 when those corporations attempted to duck transparency.

“Major corporations need to quit using the SEC to hide from their shareholders,” said ADF Senior Counsel and Senior Vice President for Corporate Engagement Jeremy Tedesco. “Wells Fargo and Charles Schwab are both trying to avoid addressing legitimate concerns shared by millions of Americans and many of their own shareholders. That’s not going to work anymore.”

Policies and practices at Wells Fargo and Charles Schwab were both evaluated as part of ADF’s 2023 Viewpoint Diversity Score Business Index—the premiere benchmark measuring corporate respect for free speech and religious freedom. The third-largest commercial bank in the nation, Wells Fargo scored an exceedingly low 10% of 100% possible, while Charles Schwab scored an incrementally higher 13%.

As ADF attorneys explain, Wells Fargo incredulously argued that “one year” means 366 days to try to convince the SEC that American Conservative Values ETF failed to meet the “one year” stock ownership requirement. In its attempted dodge of shareholders, Charles Schwab argued that Inspire Global Hope ETF’s proposal for a report on DE&I was a resubmission of a 2023 submission focused on politicized de-banking—an argument that ADF attorneys urged the SEC to reject.

“Publicly traded corporations belong to the shareholders, not the executives they hire to run the company,” said ADF Legal Counsel Michael Ross. “We fully expect the SEC to do what’s right and allow needed sunlight into the high-level decision-making that impacts the lives not only of shareholders, customers, and employees but also countless everyday Americans who depend on these financial institutions.”

Find out more about Viewpoint Diversity Score and the Business Index at www.ViewpointDiversityScore.org.

Alliance Defending Freedom is an alliance-building, non-profit legal organization committed to protecting religious freedom, free speech, parental rights, and the sanctity of life.

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