Public companies and their shareholders were thrown for a loop this proxy season when the U.S. Securities and Exchange Commission announced it wouldn’t respond to most executive requests to exclude shareholder proposals from their voting ballots.
The long-time referee for the proposal process, the SEC had for decades reviewed company requests to omit shareholder proposals from their voting materials and issued no-action letters if they believed the company was justified.
But in November, the agency announced that due to resource constraints, it wouldn’t respond to those no-action requests for the 2025-26 proxy season, leaving companies with the largely unquestioned authority to decide for themselves.
Some investors are taking note of who’s blocking what. According to data from Law.com’s Radar, shareholders have filed at least six lawsuits over excluded proposals.
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But Molly Bowen, a partner at Cohen Milstein Sellers & Toll who represents pension funds and other institutional investors, warns that companies are risking more than just litigation if they leave a proposal off a final ballot.
In this environment, there’s a “really perverse incentive” for shareholders to escalate, “rather than companies using this predictable, structured process that happens one time a year … If it’s harder to do that, that really encourages investors to look at their other tools,” she said.
Shareholder proposals are governed by Rule 14a-8, which provides a mechanism for shareholders to get their proposals onto proxy statements for an investor vote. Under the rule, companies must include proposals, or show they are exempt from the rule’s protections. Exempt proposals include those that are improper under state law or focus on an immaterial aspect of a company’s operations.
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But Bowen said that a successful shareholder proposal isn’t necessarily one that passes—it’s one that gets executives to talk with investors.
“Often the real goal and the real best outcome is the proponent and the company get together and reach a good, amicable resolution,” she said.
As auditor enforcement stalls in the US, investors harmed by fraud are clinching financial payouts and notching courtroom wins in a pair of class action suits that are typically difficult to bring against accounting firms.
Deloitte & Touche LLP agreed in March to finalize one of the largest settlements in an auditor class action case in a decade. The $34 million payout to Scana shareholders wraps up a six-year court fight over Deloitte’s audits for an abandoned nuclear power plant project in South Carolina.
That followed a case in New York where hedge fund investors who questioned the work of auditors sued BDO, now known as BDO USA P.C., after the fund collapsed. The investors were awarded about $9 million in damages via an arbitration panel. A state judge in January upheld the award and the case remains under appeal.
For investors of collapsed companies, gatekeepers like auditors who allegedly failed to do their job offer a source of cash to recover some of their losses. Such private actions also serve as a tool to hold auditors accountable for alleged flaws or outright holes in their work, extracting what can be a steeper financial toll than that normally obtained by regulators.
The courtroom focus comes as regulatory enforcement cases have fallen sharply under the Trump administration. The Public Company Accounting Oversight Board and the Securities and Exchange Commission both brought substantially fewer actions last year against auditors for ethics breaches and other misconduct.
The US audit board and the SEC brought 39 enforcement cases against auditors in 2025, down 33% from the prior year, according to a Brattle Group report.
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Rare Settlement
Deloitte’s relatively rare legal settlement with Scana Corp. investors is the latest fallout from the nuclear power plant project.
Construction of two reactors at V.C. Summer Nuclear Generating Station was years behind schedule, jeopardizing $1.4 billion in tax credits needed to finance the South Carolina project when Scana halted work in 2017.
The failed project led to criminal convictions, and civil litigation, while the SEC brought fraud charges related to bonds sold to finance the project.
Investors accused Deloitte of dismissing a Scana whistleblower who warned that the project was unlikely to meet deadlines and that executives had misled regulators and the public about the project’s progress. The audit firm also allegedly disregarded evidence that appeared to corroborate the whistleblower.
Such auditor cases underscore the “importance of fulfilling its obligations as a gatekeeper,” said Laura Posner, a partner at Cohen Milstein Sellers & Toll PLLC.
Auditors must gather credible evidence to back up their reports on corporate financial statements and not just rely on representations from company managers, Posner said.
Deloitte agreed to settle the case to “avoid the ongoing cost and distraction of extended litigation,” the firm said in statement, adding that it stands behind its audit work.
Settlements don’t necessarily signal any auditor wrongdoing. The cost to keep litigating coupled with the risks auditors might face at trial can make settlements like Deloitte’s a pragmatic option for firms.
Law360 appointed five attorneys from Cohen Milstein to its 2026 Editorial Advisory Board lineup, including:
Benefits
Ryan Wheeler | Cohen Milstein
Competition
Daniel Silverman | Cohen Milstein
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Karina Puttieva | Cohen Milstein
Employment Authority Discrimination
Harini Srinivasan | Cohen Milstein
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Rebecca Ojserkis | Cohen Milstein
The editorial advisory boards provide feedback on Law360’s coverage and expert insight on how best to shape future coverage.
A judge ruled that the president’s Jan. 6 speech was political, not official.
A federal judge delivered a serious setback to President Donald Trump Tuesday in long-running civil lawsuits seeking to hold him liable for the violence at the Capitol on Jan. 6, 2021.
U.S. District Judge Amit Mehta ruled that evidence produced so far in the litigation brought by police officers and Democratic lawmakers indicated that Trump’s speech at the Ellipse that day was political in nature and not subject to the immunity the Supreme Court has found for a president’s official acts.
“President Trump has not shown that the Speech reasonably can be understood as falling within the outer perimeter of his Presidential duties,” Mehta wrote. “The content of the Ellipse Speech confirms that it is not covered by official-acts immunity.”
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Joseph Sellers, an attorney for Democratic lawmakers suing Trump, welcomed the decision.
“We’re very pleased that the court recognized that President Trump cannot avoid accountability for his conduct on Jan. 6, 2021,” the lawyer said in an interview. “This decision, if it holds up, is going to pave the way to a trial in federal district court on these claims.”
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“We may have a trial in the spring or summer of 2028,” Sellers said. That would be more than seven years after the events at issue in the cases.
Agri Stats Inc. has agreed to stop producing benchmarking reports for protein processors — or change how it puts them together — as part of proposed settlements ending three cases alleging price fixing in the chicken, pork and turkey industries, according to motions for preliminary approval filed Tuesday.
The deals offer consumers and purchasers “unprecedented conduct relief,” the pork consumers said in one of the motions, filed in the U.S. District Court for the District of Minnesota. Agri Stats’ conduct reform “substantially changes the scope of information sharing that would be permitted in the industry,” they said.
“Should Agri Stats resume its pork reports, Agri Stats has agreed to substantially reshape their form, including removing participant lists, stopping the sales reports altogether, aggregating critical plant-level fields and removing suspect fields altogether,” the consumers said. “Thus, the settlement puts a permanent end to the reports that this court concluded were ‘the most suspicious’ of Agri Stats’ products.”
Additionally, the pork consumers reached a $4.1 million settlement with pork processor Triumph Foods LLC, according to the motion.
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The chicken consumers are represented by Shana E. Scarlett, Steve W. Berman, Breanna Van Engelen and Rio R. Pierce of Hagens Berman Sobol Shapiro LLP, and by Brent W. Johnson, Benjamin D. Brown, Daniel H. Silverman, Alison Deich and Zachary Glubiak of Cohen Milstein Sellers & Toll PLLC.
Participants in the Salvation Army’s rehabilitation programs who worked at the organization’s thrift stores with no pay showed that there is a common question over whether they are employees under state laws, an Illinois federal judge said, signing off on three classes.
In an order Thursday, U.S. District Judge Manish S. Shah granted a group of workers class certification in their suit seeking unpaid wages from the Salvation Army, saying that common questions prevail over individual ones.
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In the Thursday order, Judge Shah also granted final certification of a collective under the FLSA.
Harini Srinivasan of Cohen Milstein Sellers & Toll PLLC, who is representing the workers, said in a statement that she was pleased with the decision, adding that “being denied minimum wage for required, full-time labor undermines the dignity and autonomy of people seeking stability and support.”
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The workers are represented by Christine E. Webber, Joseph M. Sellers, Rebecca Ojserkis, Michael Hancock and Harini Srinivasan of Cohen Milstein Sellers & Toll PLLC, Gay Crosthwait Grunfeld and Michael Freedman of Rosen Bien Galvan & Grunfeld LLP and Jessica Riggin of Rukin Hyland & Riggin LLP.
Affiliates of Huntington Ingalls, Marinette Marine and Serco have reached settlements resolving the claims against them in a case accusing some of the country’s biggest shipbuilders of conspiring to suppress naval architect and engineer wages.
The naval architects and engineers filed notices for the settlements Wednesday in the Eastern District of Virginia, but did not disclose any terms of the deals. The workers accuse the shipbuilding companies and engineering consultants of having an “unwritten gentlemen’s agreement” to not recruit engineering employees from one another.
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Plaintiffs are represented by Steven J. Toll, Brent W. Johnson, Robert W. Cobbs, Alison S. Deich, Zachary R. Glubiak, Sabrina S. Merold and Callan C. Bruzzone of Cohen Milstein Sellers & Toll PLLC, Shana E. Scarlett, Rio S. Pierce and Steve W. Berman of Hagens Berman Sobol Shapiro LLP, George F. Farah and Nicholas Jackson of Handley Farah & Anderson PLLC, Candice J. Enders and Julia R. McGrath of Berger Montague PC, and Brian D. Clark, Arielle S. Wagner and Stephen J. Teti of Lockridge Grindal Nauen PLLP.
Agri Stats Inc. reached settlements Friday with groups of buyers in separate cases over alleged price fixing in the chicken, pork and turkey industries, ending several sets of claims targeting use of its benchmarking reports by protein processors.
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The chicken consumers are represented by Shana E. Scarlett, Steve W. Berman, Breanna Van Engelen and Rio R. Pierce of Hagens Berman Sobol Shapiro LLP and Brent W. Johnson, Benjamin D. Brown, Daniel H. Silverman, Alison Deich, Zachary Glubiak and Zachary Krowitz of Cohen Milstein Sellers & Toll PLLC.
Summary by Bloomberg AI
- Abbott Laboratories will invest $40 million over five years into its Michigan plant to resolve stockholder allegations against executives and board members over its infant formula safety.
- The derivative settlement seeks to ensure Abbott maintains sanitation and environmental monitoring programs in line with the health-care company’s food safety principles across all of its US powdered infant formula facilities.
- The deal proposed by shareholders would require Abbott to extend a consent decree’s monitoring plans and have a third party review any enhancements to those, among other oversight measures.
Abbott Laboratories will invest $40 million over five years into its highly-scrutinized Michigan plant to resolve stockholder allegations against executives and board members over its infant formula safety.
The derivative settlement seeks to ensure Abbott maintains sanitation and environmental monitoring programs in line with the health-care company’s food safety principles across all of its US powdered infant formula facilities, shareholders said in a proposed brief to the US District Court for the Northern District of Illinois. All $40 million at the Sturgis, Mich., plant will be spent on “core operations, food safety, or quality assurance.”
The investors Tuesday sought preliminary approval of the deal, inching Abbott’s current and former officers and directors toward the end of more than three years of litigation tied to the Sturgis plant, which was temporarily shut down in 2022 amid bacterial contamination concerns.
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Scott & Scott Attorneys at Law LLP and Cohen Milstein Sellers & Toll PLLC are lead counsel for the shareholders leading the settlement, the International Brotherhood of Teamsters Local No. 710 Pension Fund and Southeastern Pennsylvania Transportation Authority. Scott & Scott Attorneys at Law LLP didn’t immediately respond to an email seeking comment. Cohen Milstein declined to comment.
A New York federal judge pared claims Monday against JPMorgan Chase & Co. in a suit from workers who alleged they paid too much for prescription drugs, but opened discovery on allegations that the bank’s contract with its pharmacy benefit manager caused transactions prohibited by federal benefits law.
U.S. District Judge Jennifer L. Rochon entered an opinion and order granting in part and denying in part a motion to dismiss the Employee Retirement Income Security Act suit, which JPMorgan workers filed in March 2025. The proposed class alleged JPMorgan breached its fiduciary duties of loyalty and caused prohibited transactions by failing to rein in the excessive prescription drug costs in its employee health plan that were imposed by its PBM, CVS Caremark. Caremark isn’t named as a defendant in the case.
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Kai Richter, an attorney for the proposed class, said Monday, “We are pleased with the court’s common-sense ruling that paying more for prescription drugs constitutes an injury-in-fact and look forward to litigating plaintiffs’ prohibited transaction claims that the court properly held may go forward.”
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The proposed class is represented by Michael Eisenkraft, Michelle Yau, Daniel Sutter and Kai Richter of Cohen Milstein Sellers & Toll PLLC and by Tamar Katz and Michael Lieberman of Fairmark Partners LLP.