Securities Regulation Daily Wrap Up, PROXIES—Fla. Cir. Ct.: Florida sues ISS, Glass Lewis for antitrust violations, (Dec 1, 2025)

By Anne Sherry, J.D.

The lawsuit alleges that the two firms acted in lockstep to mislead investors with recommendations informed by an “ideological agenda.”

Florida filed a complaint against the two major proxy advisory firms, Institutional Shareholder Services Inc. and Glass, Lewis & Co. LLC. The complaint alleges that the firms, which together have 97 percent of the market for proxy voting advice, coordinated between themselves to issue “a highly ideological, virtually identical framework of voting recommendations” in violation of the Florida Antitrust Act and the Florida Deceptive and Unfair Trade Practices Act (Florida v. Institutional Shareholder Services Inc., No. 236237226 (Fla. Cir. Ct. filed Nov. 20, 2025)).

Attorney General James Uthmeier said in announcing the lawsuit, “ISS and Glass Lewis claim to be neutral advisors, but they use their near-total control of the proxy-voting market to push divisive political mandates that threaten retiree savings, distort corporate governance, and undermine the rule of law. That ends today.”

Deception. The complaint alleges that ISS and Glass Lewis deceive Florida investors by claiming their recommendations seek to maximize shareholder value. For example, the complaint quotes Glass Lewis as stating that its research and advice are meant “to facilitate shareholder voting in favor of governance structures that will drive performance, create shareholder value and maintain a proper tone at the top,” while ISS’s voting policy is self-described as being “designed to promote long-term shareholder value, good governance and risk mitigation.”

In reality, the Attorney General argues, the defendants’ advice does the opposite: decreasing shareholder value by including “ideological social justice” considerations into their analysis. The complaint asserts that the reputational harms factored in by the defendants are one-sided: “Defendants apparently are silent on the reputational concerns associated with matters such as companies employing illegal immigrants in their workforces or not manufacturing products in the United States.”

The firms also are alleged to deceive investors by failing to disclose material information such as the legal risks attendant to their recommendations around board diversity.

Anticompetitive conduct. The defendants have engaged in anticompetitive conduct by agreeing to homogenize their proxy advice services in at least three concrete ways, the complaint alleges. The complaint’s allegations as to the first manner of the defendants’ agreement are redacted, but may have to do with the defendants’ communications, as the complaint states, “Sharing information about future actions is a classic indicium of a conspiracy to coordinate on those actions.”

Second, the defendants voluntarily joined associations including the UN PRI Principles and Reporting Requirements and the UK Stewardship Code. “Joining an organization can constitute joining a conspiracy, even if not all the members join at the same time or are even aware of each other,” the complaint asserts, citing Interstate Circuit v. United States, 306 U.S. 208, 227 (1939).

Third, the defendants do not compete on the quality of their services, and their ESG recommendations are largely identical. The complaint argues that without the agreement not to compete on product quality, one firm would be incentivized to prioritize profit over politics and would gain customers seeking the better advice that would result.

The case is No. 236237226.

Attorneys: David H. Thompson (Cooper & Kirk, PLLC) and Lizabeth A. Brady, Office of the Attorney General, for State of Florida.

Companies: Institutional Shareholder Services Inc.; Glass, Lewis & Co. LLC

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