Texas Attorney General Ken Paxton filed a lawsuit against proxy advisory firm Institutional Shareholder Services, Inc. (ISS) alleging violations of the Texas Deceptive Trade Practices Act by prioritizing political agendas over sound financial guidance in voting recommendations. The lawsuit seeks an injunction to stop deceptive practices and civil penalties of up to $10,000 per DTPA violation. This action follows a 2025 investigation into ISS and peer firm Glass Lewis & Co.
The lawsuit seeks an injunction prohibiting ISS from engaging in deceptive and illegal acts under the DTPA, civil penalties of up to $10,000 per violation of the DTPA, and additional unspecified relief.
In-house legal teams at public companies and institutional investors that engage proxy advisory firms should review their vendor agreements with such firms to ensure they include requirements for objective, financial-principle-based voting recommendations that prioritize fiduciary duty over ideological agendas. Clauses should mandate disclosures of potential conflicts of interest, prohibit the imposition of political or social quotas unrelated to financial performance, include representations of neutrality and compliance with the Texas Deceptive Trade Practices Act, and outline remedies for misleading or deceptive guidance. Teams should also review termination clauses for breaches of fiduciary duty or deceptive practices.
Entity
Institutional Shareholder Services, Inc.
Industry
Financial ServicesOfficial Press Release
https://www.texasattorneygeneral.gov/news/releases/attorney-general-ken-paxton-sues-worlds-largest-proxy-advisory-firm-pushing-radical-political-agenda
ISS Petition
https://www.texasattorneygeneral.gov/sites/default/files/images/press/ISS%20Petition.pdf
Texas Attorney General Enforcement Page
https://www.texasattorneygeneral.gov/consumer-protection/privacy
"Institutional Shareholder Services, Inc. (“ISS”)"
"Texas Deceptive Trade Practices Act (“DTPA”)"
"misleading institutional investors and public companies by issuing voting recommendations that prioritize radical political agendas over sound financial principles and fiduciary duty"
"seeks to stop ISS from continuing its deceptive and illegal acts, civil penalties of up to $10,000 for each violation of the DTPA, among other relief"
"/sites/default/files/images/press/ISS%20Petition.pdf"
"May 20, 2026"
Texas Attorney General Ken Paxton launched an investigation into the American Academy of Pediatrics (AAP) over concerns that the organization may be promoting and recommending childhood vaccines for financial gain. The AAP has been issued a Civil Investigative Demand to determine the basis of its vaccine recommendations and whether they are influenced by financial incentives from pharmaceutical donors.
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$150.0M
Texas Attorney General Ken Paxton secured a $150 million multistate settlement against 23andMe following a 2023 data breach that exposed genetic and personal data of 6.9 million consumers. The settlement resolves bankruptcy claims and requires enhanced data security, risk assessments, and an independent advisory board, with immediate recovery of $18 million from bankruptcy funds.