JPMorgan Chase & Co. (NYSE:JPM), Morgan Stanley (NYSE:MS), Citigroup Inc. (NYSE:C) and Bank of America Corp (NYSE:BAC) have all been successful in blocking proposals from shareholders who believe they should break up. Several organizations filed proposals in hopes of allowing shareholders to vote on whether the banks should break up. The banks submitted letters to the Securities and Exchange Commission to block the votes, and the agency has now officially sided with the banks.
The Securities and Exchange Commission granted their requests by sending letters to the banks and posting those letters on its website. The letters sent to the four banks were almost identical. They said the agency agrees that the banks shouldn't have to hold shareholder votes on whether their boards should look into the possibility of breaking them up.
The letters also said that the agency would not pursue the banks for keeping the proposal off their proxies. It said that the proposals are “vague and indefinite” and don’t provide specifics about what actions would happen if they are passed. Dow Jones Newswires was the first to review the letters.
Reuters reports that the proposals came from a number of organizations, including the AFL-CIO, the Benedictine Sisters of Mount St. Scholastica and the American Federation of State, County and Municipal Employees. The organizations said the banks have simply become too large to manage, so they should breakup.
The news comes as several current and former JPMorgan Chase & Co. (NYSE:JPM) executives, including former CIO Nina Drew, prepare to go before a Senate subcommittee tomorrow in connection with the London Whale incident. Among the angles of the case that will be considered is whether the bank has become too large to manage and should break up.
Citigroup Inc. (NYSE:C) pointed out that it has unloaded some of its assets in the wake of the financial crisis.