Council of Institutional Investors

Delaware Judge’s Ruling Contradicts SEC No-Action Decision
Thursday, December 11, 2014
by: Rosemary Lally

Section: CII Governance Alert

A U.S District Court for the District of Delaware ruled late last month that Wal-Mart Stores wrongly excluded a shareholder proposal on gun sales filed by Trinity Church from its 2014 proxy statement.

The SEC granted the company no-action relief from the proposal on the basis that it pertained to Wal-Mart’s ordinary business. The proposal asked the company’s governance committee to more closely examine the sale of products that might endanger public safety, including guns with clips holding more than 10 rounds.

In addition to upending the SEC’s no-action decision, U.S. District Judge Leonard Stark in Wilmington, Delaware, granted Trinity an injunction preventing Wal-Mart from excluding the proposal from proxy materials for its 2015 annual meeting, saying a vote would serve the public interest.
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