Ironfire Wants SEC to Break Up Broadridge's Proxy Monopoly

July 17th, 2009		\| More
Contributed by: Eric Jackson, Ironfire Capital
Yesterday afternoon, Eric M. Jackson Ph.D., the Managing Member of activist hedge fund Ironfire Capital LLC, wrote a letter Mary L. Schapiro, the Chairman of the U.S. Securities and Exchange Commission, asking her to break-up the monopoly that Broadridge has over electronic proxy voting. The complete letter is included below: From: Eric Jackson Sent: Thursday, July 16, 2009 3:00 PM To: 'chairmanoffice@sec.gov' Subject: Breaking Up the Broadridge (BR) Monopoly Dear Chairman Schapiro: I would like to urge you to consider breaking Broadridge’s monopoly in overseeing electronic proxy voting for all public companies. As you might recall, last year, after Broadridge released the results of the Yahoo! (YHOO) vote, there was a large protest made by Gordy Crawford of Capital Research who questioned the veracity of the results. Because of Mr. Crawford’s stature, the fact the Cap Re was one of the largest Yahoo! investors, and the intense media interest in the Yahoo! voting results, Broadridge was forced to verify the results and admitted their results had been far off the mark. Although Broadridge said the problem was a simple “truncation error” made by a computer, it’s clear when you look at the actual results and the ones first reported that there was human error involved. What was shocking about the incident was that it likely would never have been reported had Gordy Crawford not spoken up. It makes me wonder how many other errors made by Broadridge are never reported or acknowledged. I understand that the only check and balance over Broadridge’s monopoly is that they have to submit regular “updates” to the SEC. I don’t believe this is sufficient, given the importance of these voting results. What does it matter if the SEC allows proxy access or gets rid of broker votes, if investors can’t trust the final voting results because of future Broadridge “truncation errors”? In my view, investors would be best served by allowing another company to compete with Broadridge. Let the best provider to companies and shareholders be successful. I also note that Broadridge appears to be much more company-centric (i.e., management) than shareholder-centric. I hope you will consider adding further examination of Broadridge to your already busy list of plans. Sincerely, Eric Jackson Eric M. Jackson, Ph.D. Managing Member Ironfire Capital LLC

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