Missouri secretary of state decides to appeal ESG ruling
The cost of Jay Ashcroft s legal battle over woke investing rules, which have already exceeded $2 million, may increase further due to his appeal to the U.S. Court of Appeals for the 8th Circuit. The controversy stems from a 2023 lawsuit by the Securities Industry and Financial Markets Association (SIFMA) against regulations requiring securities firms to obtain written consent from investors before incorporating social objectives into investment recommendations. Ashcroft, who ran unsuccessfully for governor, criticized ESG (environmental, social, and governance) investing during his campaign, claiming it opposes fossil fuels, promotes unionization, and influences corporate board selections. U.S. District Judge Stephen Bough ruled in August that the proposed rules were unconstitutionally vague and could cause irreparable harm to financial advisers in Missouri. In response to Bough s decision, attorneys for SIFMA requested the state to cover their legal expenses, arguing that Ashcroft s politically connected law firm used time-consuming and potentially unnecessary legal maneuvers. The initial bill was set at $1.3 million, but the final amount could vary depending on the outcome of the appeal. Attorney Edward Greim, representing Ashcroft, stated that the state would likely oppose the amount of fees and expenses claimed by SIFMA. Public payroll records indicate that taxpayers have already paid over $876,000 to Greim s law firm, bringing the total cost of the lawsuit to $2.1 million. Ashcroft s appeal to the 8th Circuit Court of Appeals may result in additional legal costs for the state, as a decision in the matter is not expected until after his term ends in January. The case highlights the ongoing debate over socially responsible funds, which have attracted $17 trillion in assets but face new regulations aimed at slowing their use in retirement plans.
Source: stltoday.comPublished on 2024-09-16
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