By Cameron Berube

According to yet another investment scorecard, Vanguard is failing to advance the best interests of its investors.

The new scorecard, issued by the Nathan Cummings Foundation, ranks mutual funds based on their support for “Proxy Access” proposals. Seven out of the 10 largest mutual fund companies in the United States voted in favor of proxy access proposals the majority of the time. Vanguard, on the other hand, the largest mutual fund family in the United States, only supported proxy access proposals 18 percent of the time.

Proxy access, or granting significant shareholders (those that hold at least 3 percent of a company’s shares) the ability to nominate a director to the board of a company they invest in, is a bread and butter shareholder rights issue. Control of the board is central to the interests of shareholders because it provides them with a mechanism to weigh in on issues of corporate governance which effect shareholder value. According to the CFA Institute, a global association of investment professionals focused on promoting accountability and integrity in financial markets, “proxy access would serve as a useful tool for shareowners in the United States and would ultimately benefit both the markets and corporate boardrooms, with little cost or disruption to companies and the markets as a whole.”

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Almost every day, you hear about some scandal where a company has taken advantage of customers, workers, depositors, taxpayers, and so on. For example, fuming Volkswagen customers are all over the news right now because they bought vehicles with pollution controls that, according to allegations by the U.S. Department of Justice, were rigged to cheat emission tests. So it’s shocking that the U.S. House of Representatives just passed a bill, H.R. 1927, the “Fairness in Class Action Litigation and Furthering Asbestos Claims Transparency (FACT) Act,” which would strip ripped-off consumers (and other harmed individuals) of their legal rights.

The first way that the bill would undermine justice is by limiting the ability of consumers to band together in a class action to hold corporations accountable for widespread illegal behavior. The bill would cut off class actions as we know them by limiting plaintiffs from bringing suits as a class action unless they have suffered exactly same sort of injury. Examples are plentiful of monumental legal cases where, without the class action device, Americans may not have received justice. For example, families suffering from cancer caused by companies dumping toxic chemicals, children who were educated in segregated schools, women who were forced to endure sexual discrimination, shareholders who were duped by reckless companies and numerous other landmark court decisions.

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"Tyson Slocum" "Public Citizen"Statement of Tyson Slocum, Director, Public Citizen’s Energy Program

Note: On Dec. 31, the U.S. Federal Energy Regulatory Commission (FERC) issued an order regarding Public Citizen’s market manipulation complaint against Dynegy, Inc.

In a potential victory for Illinois energy consumers, the Federal Energy Regulatory Commission (FERC) has ruled that the Midcontinent Independent System Operator (MISO) rules for the upcoming 2016-17 power auction are not just and reasonable.

Public Citizen’s May 2015 complaint alleged that the auction for 2015-16 violated the Federal Power Act’s requirement that all electric rates be just and reasonable, because Houston-based Dynegy, Inc. had manipulated the capacity auction.

While FERC’s New Year’s Eve ruling said that a future order will address Public Citizen’s allegations surrounding the 2015-16 auction, FERC should find the 2015-16 auction to have violated federal law in the same way that FERC’s Dec. 31 order found that the upcoming 2016-17 auction violates the just and reasonable standard. Why? Because FERC identified unlawful parts of MISO’s auction that are the same for both the 2015-16 and 2016-17 auctions.

The complaint alleged that because of Dynegy’s manipulation and flaws in the auction process, auction prices for a zone in Illinois increased from $16.75 per megawatt-day in 2014-15 to $150 in 2015-16, which inflated electricity costs for the average Illinois family by $140. Public Citizen’s complaint was echoed by a similar filing by the Illinois Attorney General.

In anticipation of the ruling on the auction that already occurred, FERC set an effective refund date. So if and when FERC finds the past auction to be illegal, it will be able to order refunds to harmed consumers.

FERC also acknowledged that the formal, non-public market manipulation investigation into Dynegy is ongoing. If FERC follows the logic of its New Year’s Eve ruling, and regardless of whether the commission finds Dynegy manipulated the market, then Illinois consumers will be in line for tens of millions of dollars in refunds.

By Sonia Gill

Smart and effective consumer protection is preconditioned on the availability of data and information. For this reason, Public Citizen – and numerous leading consumer and privacy groups – strongly support robust and purposeful data collection and analysis by the Consumer Financial Protection Bureau (CFPB).

The CFPB’s consumer financial data collection practices allow it to monitor emerging market trends and business practices that are harmful to consumers and to respond in an effective and proportional manner – in other words, to fulfill the pro-consumer mission created for the agency by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Not all are on board. Despite being the only federal agency dedicated to protecting the average American consumer from the abusive and unfair business practices of the financial industry, the House Financial Services Subcommittee on Oversight and Investigations dedicated its last hearing of 2015 to attacking the CFPB for purported consumer privacy risks associated with the CFPB’s collection and analysis of consumer data. In yet another attempt to discredit the work of the CFPB, the subcommittee dusted off time-tested, paranoia-inducing talking points and catapulted a series of accusations at the CFPB ranging from the fantastical – likening the CFPB to an NSA-style spy agency, secretly collecting personal information from unsuspecting Americans – to the conceivable, such as potential cyberattacks against the CFPB that might result in data breaches.

While this last concern is at least a plausible one, the reality is that political opponents of the CFPB are looking for ways to  stifle the agency to protect their friends on Wall Street (friends who happen to donate generously to their reelection campaigns). These legislators are smart enough to understand the exceptional importance of data to enforce federal consumer financial law and inform the agency’s actions. By blocking access to information, they know they can cripple the CFPB’s ability to hold financial fraudsters accountable.

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We’ve had a busy few weeks at Public Citizen.

This month we delivered over 2 million petition signatures for five different campaigns for public justice and a more democratic government.

One of the most rewarding parts about working here is seeing how our actions take shape both before and after the petitioning process.

The frustration with pay-to-play politics and greed is always there, but it’s worth it to see the shock on a staff member’s face as we deliver thousands of petition signatures to congressional offices, the crowds that gather to watch millions of voices being heard in front of the White House, or the actions taken across the country to make the system a little more just.

Public Citizen will continue to fight for a stronger democracy and public protections and we will continue to oppose threats to the public interest that reward greed and recklessness.

Here’s what we’ve been up to recently:

Over 200,000 Signatures Delivered to Congress on the #NoRiders #CleanBudget Petition

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