The five New York City pension funds won an SEC ruling allowing them to proceed jointly with a shareholder proposal at Citigroup and Bank of America that seeks an independent review of mortgage and foreclosure practices, city Comptroller John C. Liu said in statement Wednesday.
Mr. Liu oversees the investments of the funds, whose combined assets total $113.4 billion.
The companies sought rulings from the SEC to exclude the proposals from their proxy statements.
In a letter to Citigroup, Hagen Ganem, attorney-adviser in the office of chief counsel, SEC Division of Corporate Finance, said: “We are unable to conclude that the proposal is so inherently vague or indefinite that neither the shareholders voting on the proposal, nor the company, in implementing the proposal, would be able to determine with any reasonable certainty exactly what actions or measures the proposal requires.”
In the letter to Bank of America, Adam F. Turk, attorney-adviser in the chief counsel office of the SEC division, wrote the SEC rejects the view that the company could exclude the proposal under the provision that it “deals with a matter relating to the company's ordinary business operations. In view of the public debate concerning widespread deficiencies in the foreclosure and modification processes for real estate loans and the increasing recognition that these issues raise significant policy considerations, we do not believe that Bank of America may omit” the proposal from its proxy materials.
The SEC allowed J.P. Morgan Chase to remove the New York City funds' proposal from its proxy statement, because another group of shareholders, led by the $7.01 billion Board of Pensions of the Presbyterian Church, already filed a similar proposal
Bank of America and J.P. Morgan haven't issued their proxy statements yet.
Scott Silvestri, Bank of America spokesman, declined to comment other than confirming the proposal will appear in the proxy statement. Joe Evangelisti, J.P. Morgan spokesman, couldn't be reached for comment.
In a separate joint proposal at Citigroup, the $400 million Kansas City (Mo.) Firefighters' Pension System and $650 million Massachusetts Laborers' Pension Fund, Burlington, call for the company to produce semiannual reports disclosing corporate political contributions by recipient and identify the persons at the company making the decisions on the spending, according to the company's proxy statement. Citigroup opposes the proposal, calling it unnecessary because the company posts on its website all corporate political contributions and contributions made by Citi's political action committee, the company statement said.