Capitalism is a simple bargain: you provide cash and in exchange you receive a share of ownership. Owning property comes with rights, the right to vote on who will represent you on the board of directors, the right to request and receive information needed to decide if you want to sell or buy more shares, and the right to have a dialogue with management to raise material concerns that affect the value of your asset.
This implicit bargain fueled the greatest engine of wealth creation in human history. However, under the current Administration, the “capital” is being stripped out of capitalism.
In a recent conversation with Reuters, I warned that the White House and the SEC are effectively disassembling the machinery of our public markets. By threatening to roll back Regulation S-K, refusing to adjudicate shareholder resolutions, not allowing shareholders with less than $5million to file exempt solicitations, and not requiring disclosure of material risks, they are transforming public corporations into private fiefdoms with no accountability. The Administration is telling owners of capital—you, me, retirees, pension funds, and endowments—that we have no recourse. We are expected to write checks and not ask questions.
