UK Task Force Provides Recommendations to Boost Pensions’ Voting Powers

A UK pension task force is calling on regulators, asset managers, and the government to remove stewardship barriers that prevent pension funds from voting on issues such as climate risk management, diversity, or pay.

Currently, when UK pensions invest in pooled funds, they give up their rights to vote at the annual general meetings of the companies they invest in, according to the Taskforce on Pension Scheme Voting Implementation (TPSVI), which was established last December. Additionally, it said the vast majority of asset managers in charge of pooled funds have not always been prepared to engage with their clients’ voting preferences.

“Today, resolutions on topics like climate are sometimes requisitioned by shareholders, the owners of the company,” the task force said in a recently published report. “It is our view that motions of that type are likely to increase in number and to gain increasing public attention. It is making sure that the voting system can cope with increased scrutiny from stakeholders and the public that has shaped much of our work.”

For more stories like this, sign up for the CIO Alert newsletter. 

The report also includes two dozen recommendations to regulators and pension fund trustees on working to remove stewardship barriers. The three main recommendations are:

Pension trustees should either set a voting policy of their own, or explicitly accept responsibility for those policies exercised on their behalf by their asset managers.
All asset managers should offer asset owners the opportunity to set an “expression of wish” as to how votes are exercised on their behalf.
The Financial Conduct Authority (FCA) should clarify that acting on an expression of wish is not in breach of fund rules; set expectations of asset managers for better disclosure of voting policies; and provide more “granular and comparable” reporting of how votes are cast and more comprehensive explanations for those votes.

“I see no reason why trustees shouldn’t be able to determine their own high level policies—on areas such as climate risk management, diversity, or pay—and find an asset manager to implement it,” Minister for Pensions and Financial Inclusion Guy Opperman said in a statement.

The TPSVI is chaired by Simon Howard, former CEO of the UK Sustainable Investment and Finance Association, and includes representatives of asset owners, insurers, and the government.

“Voting matters in terms of how companies are run, who is appointed to run them, and how they act,” the report said. “Good voting, used as part of broader stewardship, can help secure better financial returns for pension savers and that is a significant factor in seeking to improve the system.”

Related Stories:

Union Threatens Strike Over Cuts at UK’s Largest Pension

Some of the UK’s Largest Asset Managers Back Diversity Initiative

14 UK Pension Funds Sign Prince of Wales’ Climate Pledge

Tags: Department for Work and Pensions, DWP, engagement, FCA, Financial Conduct Authority, Pension, pooled funds, stewardship, Taskforce on Pension Scheme Voting Implementation, UK, voting

The US Securities and Exchange Commission (SEC) has charged Puerto Rico-based Back to Green Mining and its two managing members for running a fraudulent and unregistered offering in a purported “green” mining venture.

According to the SEC’s complaint, Back to Green President and CEO José Jiménez Cruz and Managing Member Manuel Portalatin allegedly offered and sold to retail investors the opportunity to share in the profits of a purported “green” gold and platinum mining operation in Colombia. The SEC said the offering, which was not registered with the regulator, was part of a scheme that fraudulently raised more than $2.7 million from approximately 150 investors.

Want the latest institutional investment industry news and insights? Sign up for CIO newsletters. 

Jiménez allegedly was in charge of collecting and disbursing funds from investors, and he had sole control of the Back to Green accounts into which he deposited the $2.7 million. During this same period, from 2016 to 2019, the SEC alleges Jiménez withdrew every dollar that investors deposited into the Back to Green accounts and disbursed the money to himself, Portalatin, and family members.

“While the defendants appear to have spent some investor funds on actual mining operations,” said the complaint, “the amount invested does not represent even close to the $2.7 million contributed by investors.” It added that company records “do not include sufficient business documentation to confirm that [mining] equipment was actually delivered to the site, in working order, and necessary to the particular needs of the operation.”

Jiménez and Back to Green also allegedly placed advertisements promising investors what the SEC says were “exorbitant” 40% monthly returns that would begin to flow in within months of investing with Back to Green. They also allegedly presented investors with materials that falsely stated that they had obtained all permits necessary to mine in Colombia.

The SEC is seeking permanent injunctions, disgorgement of allegedly ill-gotten gains plus interest, and civil penalties against Back to Green and Jiménez. Without admitting or denying the allegations in the SEC’s complaint, Portalatin has offered to settle and accept permanent injunctions from future violations of the charged provisions and from participating in securities offerings not registered with the SEC. He has also agreed to pay disgorgement of just over $600,000 plus prejudgment interest of more than $64,000 and a civil penalty of $160,000. The settlement is subject to the approval of the district court.

Related Stories:

SEC Settles With Eight Firms Over Inadequate Cybersecurity Measures

‘Crypto Mom’ Pushes Back Against SEC Over Poloniex Fine

VC Fund President Gets Nearly 5 Years in Prison for Securities, Wire Fraud

Tags: Back to Green Mining, Fraud, green mining, Jose Jiménez, Manuel Portalatin, SEC, Securities and Exchange Commission, Settlement, unregistered offering