| NEW YORK, March 13
NEW YORK, March 13 U.S. regulators have agreed
with four of the country's biggest banks that they will not have
to hold shareholder votes at upcoming annual meetings over
whether the institutions are too big.
The Securities and Exchange Commission rendered its decision
in nearly identical letters to JPMorgan Chase & Co, Bank
of America Corp, Citigroup Inc and Morgan Stanley
that were posted on the agency's web site on Wednesday.
The letters said agency lawyers agreed with the banks that
they need not conduct shareholder votes on proposals from labor
and religious groups calling for bank directors to explore
breaking up the companies.
The four banks are among the six biggest in the country and
are prominent in public arguments over ending too-big-to-fail
The SEC letters said there was "some basis" to agree with
the banks that the break-up proposals were "vague and
indefinite" and therefore should not be in proxy statements for
votes at upcoming annual meetings.
The proposals were filed by investment funds operated by
groups including the AFL-CIO, the American Federation of State,
County and Municipal Employees, and the Benedictine Sisters of
Mount St. Scholastica.
The proposals would have allowed shareholders to call for
directors of the banks to appoint committees to consider
"extraordinary transactions," including breaking up the
But the SEC lawyers said shareholders or the companies would
not be able to determine "with any reasonable certainty exactly
what actions or measures" the proposals would require. The
lawyers said they would not recommend any actions against the
companies under proxy rules for leaving out the proposals.
The AFL-CIO proposal for JPMorgan said the bank had become
too big to manage and cited as evidence the more than $6 billion
in losses last year involving a trader nicknamed the "London
Whale" in the bank's Chief Investment Office in London.
Heather Slavkin Corzo, an AFL-CIO legal adviser who worked
on the proposal, said in an email: "It is a shame that
shareholders are being denied the opportunity to vote on this
An SEC spokesman and representatives of JPMorgan, Bank of
America and Morgan Stanley declined to comment.
Citigroup said in a written statement that the company is
always reviewing alternatives and has become a "simpler, safer
and stronger" institution as it unloaded assets after the
The SEC letters were dated Tuesday and have been posted on
the agency's web site. Dow Jones reported earlier on Wednesday
that the letters had been issued.