November 24, 2025
Friday Q and A: Under Chairman Paul Atkins, the SEC has been aggressively pursuing corporate governance reforms that could fundamentally alter the balance of power between public companies and their investors. Despite the broad reach of the initiatives, which take aim at shareholder proposals, securities class action lawsuits and financial reporting requirements, they haven’t provoked much of an outcry.
In recent weeks, however, that’s been changing. This week, we sat down with one of the leaders of the growing and increasingly vocal opposition movement. Laura Posner is a partner in the securities litigation and investor protection practice at Cohen Milstein Sellers & Toll, one of the largest plaintiffs law firms in the country. She’s also a former state securities regulator.
Unsurprisingly, Posner has strong opinions about what’s going on at the SEC during what she calls “the most anti-investor administration” ever. Read on for her take on the commission’s recently adopted policy statement that frees up companies to use mandatory arbitration clauses, as well as its controversial decision this week to largely stop reviewing shareholder resolutions this proxy season. She also discusses the benefits of class actions – even for the firms being sued. And corporate leaders, she argues, are also worried about Atkins’ efforts. What follows is our (lightly edited and condensed) conversation.
Capitol Account: What’s your background?
Laura Posner: I have been doing securities litigation and investor protection work my entire career. I’ve been at a number of private firms, but also was appointed by the New Jersey attorney general to be the [state] securities regulator for three years, between 2014 and 2017.
CA: What’s your broad take on the revamp of corporate governance that’s taking place at the SEC?
LP: It’s fair to say that this has been the most anti-investor administration that certainly I’ve seen in my lifetime, and I think it’s probably fair to say ever. We’re seeing that materialize in a lot of different ways.
CA: That’s quite a statement. Why hasn’t there been more of an uproar?
LP: There are dozens of public pension funds and a multitude of investor advocacy organizations…that are quite attuned to what’s going on right now…They are extremely concerned about the various edicts that are coming out.
CA: What about individual investors? These are somewhat arcane issues.
LP: You are correct that the average retail investor is certainly not understanding or really even aware of a lot of these things. Some of the topics have broken through in the public press, like, for example, [Donald] Trump’s desire, and what sounds like Chair Atkins’ desire, to move from quarterly reporting to semi-annual reporting. But some of these other things…it’s taking a little bit longer to break through.
CA: Is part of the reason that many of these changes are being conveyed in guidance, policy statements or even speeches?
LP: I think that’s very intentional because the SEC knows that if they actually issue rules, they have to open them up to public comment. And the overwhelming majority of comments are going to be negative. Not just from investors, by the way, [but] from corporations, from [directors and officers] insurers, from underwriters and accountants. There are a lot of folks who would view these proposals as really problematic.
CA: What do you think of Atkins’ contention that this effort is necessary to spur IPOs and make being a public company `cool again’?
LP: These changes are going to have the exact opposite reaction. I think you’re less likely to see IPOs. You’re going to see less investment in U.S.-based companies. People want to be able to vindicate their rights. They want to be able to get timely information to make smart investment decisions. And if we’re no longer having those rights available to us, or that information available to us in a disclosure-based regime, why invest in a U.S. company?
CA: The most controversial of these reforms might be the commission’s new policy statement that assures companies going public that they can include a mandatory arbitration clause in their bylaws. At least for now, though, the impact seems pretty limited. Do you agree?
LP: How big a deal it is depends on how many issuers take advantage of it.
CA: Will they?
LP: Companies don’t think these provisions are in their best interest. And when you think about the practical side of things, that’s self-evident.
CA: What’s the advantage for a corporation to face a class action in federal court as opposed to a private arbitration?
LP: More than 50 percent of securities cases are dismissed at the motion to dismiss stage. That is higher than any other kind of claim you could possibly bring in the United States. They also get the benefit under the [law] of no discovery obligations until a motion to dismiss is decided against them. You don’t get those benefits if you are in front of an unsophisticated arbitrator.
CA: Would there be fewer claims though?
LP: [Institutional] investors have fiduciary obligations to their members. They are going to have to bring arbitrations. We’re not talking about one litigation or five litigations or 10 litigations. We are talking, in certain circumstances, likely hundreds of separate arbitrations. The defendants in these cases are the CEO, the CFO – the senior executives are the witnesses. So you’re going to have your CEO deposed 200 times? That is not a manageable way to conduct business.
CA: Why are class actions good for investors?
LP: They benefit from not having to be an active participant [in the litigation]. The vast bulk of investors are absent class members who get to recover as part of any settlement or judgment without having to do anything. Part of the problem of arbitration is that all of those pension funds, all of those investors who don’t bring litigation…they’re going to have to file in arbitration.
CA: And if they don’t?
LP: They are going to lose out on the money that they would otherwise obtain through the class process.
CA: There’s also an argument that class actions serve as a complement to government enforcement. Was that your experience?
LP: As a former regulator, I really believe in the importance of regulators, both the SEC and state. They play a critical role. But in terms of actually providing financial recovery to investors, it’s not even close. The overwhelming majority of successful securities cases, the SEC never brings [and] no state regulator brings. So absent a class action, those claims are not brought. Even when there is a pending SEC action or state action, the amount recovered by the private bar on behalf of investors is seven, 10, sometimes 20 times more. Even in the most egregious of frauds.
CA: Government overseers also have limited budgets.
LP: I saw that firsthand. There’s no question that we did not have the resources necessary to police the markets by ourselves, and that the private bar played an absolutely crucial role in helping deter fraud and then recover money for investors.
CA: Why do you think the SEC’s majority took this step? Republicans have long complained about the trial bar bringing frivolous cases.
LP: That’s a good question. You might have to ask them.…We’ve recovered hundreds of billions of dollars for investors. These are not frivolous cases.
CA: What do you make of Atkins’ efforts to discourage, or perhaps do away with, shareholder proposals?
LP: Like a lot of things with this administration, it seems to be a remedy in search of a problem. I don’t think that companies are overwhelmed by shareholder proposals.
CA: How so?
LP: A lot of companies welcome – and find value in – hearing from their investors about ways in which they could properly manage or disclose things. Various funds have really made an effort behind the scenes to encourage companies to take certain actions. And companies [may say], `We weren’t focused on that issue, but you’re right.’ They affirmatively change their policies or their practices or their disclosures because they recognize these things are problematic.
Read the article in full, courtesy of Capitol Account.
Read Countering an Administration `Hell-Bent on Attacking Investor Rights’.