Georgeson Inc., a leading proxy-solicitation firm, has gotten ensnared in a scandal involving the leaking of confidential shareholder votes for money, The Post has learned.
The Downtown Manhattan firm has been subpoenaed by federal regulators and has hired high-powered law firm Paul Weiss to conduct an internal investigation into the matter, sources said.
Plus, Georgeson has placed three employees on administrative leave, these sources added.
An exclusive report in The Post in February revealed that an employee of ISS, a shareholder-advisory firm, had been selling secret shareholder voting data to proxy-solicitation firms like Georgeson for fancy dinners and tickets to concerts.
Possessing such coveted information would help proxy solicitors do their job by letting them know how large shareholders were voting and which shareholders’ votes were still up for grabs.
After the story in The Post, the Securities and Exchange Commission and Justice Department launched probes into the matter.
ISS, a unit of publicly traded MSCI Inc., fired the employee leaking the info in the wake of the explosive report after he “fessed up” to leaking the data.
While no proxy-solicitation firm was named in The Post story, it now appears Georgeson is being looked at by federal officials.
Jeff Stein, a spokesman for Computershare, the Melbourne, Australia, company that owns Georgeson, confirmed the SEC subpoena, the hiring of outside legal eagles and the employee suspensions.
Stein said the publicly traded Computershare has been cooperating with authorities and recently placed Computershare’s executive vice president of operations, Joe Spadaford, in charge of operations at Georgeson. Spadaford is a CPA with expertise in “risk management and operational controls,” according to his company bio.
Stein said that Computershare went to the SEC to offers its “full cooperation” when The Post story about the allegations first emerged. The company’s internal investigation into the matter is “still ongoing,” he said.
Shareholders’ voting data are supposed to be kept private unless a shareholder chooses to make its wishes known.
Knowing how big pensions, hedge funds and mutual funds are voting ahead of time lets boards game the system by pinpointing holdouts and pressuring them to change their minds.
Proxy solicitation firms, like Georgeson, are hired to help boards win votes in their favor. They are supposed to ferret out how shareholders plan to vote through the laborious task of cold calling.
ISS helps big shareholders, such as mutual funds and pension funds, cast their votes through an electronic platform known as ProxyExchange.
Last month, ISS said a Boston-based accounts manager “fessed up to sneaking clients’” private voting data “to a proxy solicitor over a number of years.”