There is no doubt, in my mind, that the SEC is a political animal, no different that any government agency. Any cursory look at history would suggest there have been many foul balls hit by the agency that are way off the field of their mandate that reflect the winds of the time. And there is no doubt that politically motivated parties have abused said system for things that have nothing to do with basic corporate governance and reasonable semblance toward fair and functioning securities markets.
Then there is the theory that theoretical perfection shouldn’t be the enemy of practical realities. To wit, we have these proposals by the SEC.
The question for today is: is a Federal System(Ok, a Delaware system) for generally creating rules that apply to everyone better than a State system that would enable a conceptual race to the bottom for shareholder rights? Yes, Delaware has fallen far from where it was 20 years ago, but does it benefit shareholders to have multiple states bidding for corporate cash by allowing any number of “fat-cat” friendly structures?
The answer here is mostly no. It is “bad enough” with entrenched voting shares and the depth of indexation that means fewer eyeballs that really care about any of this.
Yes, the SEC needs to move from 1978 to 2026.(Yo, can you please kill the mandatory reporting of 1503?) And kill the insanity of paperwork in a world with the internet.
This will be gamed to death to the detriment of shareholder rights and in the “Decade of What Should Often Be Called Fraud” in which we are still living. It is not a helpful development.
