On July 1, 2025, the U.S. Court of Appeals for the District of Columbia Circuit upheld the February 23, 2024 judgment of the U.S. District Court for the District of Columbia that proxy voting advice does not constitute “solicitation” for purposes of Section 14(a) of the Securities Exchange Act of 1934 and related proxy rules.

From 2019 through July 2022,[1] the SEC issued interpretations and guidance regarding, and adopted amendments to, the proxy rules under the Exchange Act that extended the definition of “solicit” and “solicitation” to expressly include the furnishing of proxy voting advice for a fee, thereby extending the antifraud provisions of Rule 14a-9 under the Exchange Act to apply to proxy voting recommendations offered by proxy advisory firms. According to the SEC, because proxy advisory firms market their expertise in, and receive fees for, researching and analyzing matters submitted to a shareholder vote and providing voting recommendations, those recommendations are reasonably calculated to influence votes and should be considered a solicitation regardless of whether the recommendations are followed. In response, a proxy advisory firm filed suit contesting the SEC’s extension of the proxy rules to proxy voting advice, claiming that proxy advisory firms do not “solicit” proxies because proxy advisory firms “do not seek proxy authority or ask shareholders to vote a certain way to achieve a particular outcome.” On February 23, 2024, the U.S. District Court for the District of Columbia granted summary judgment for the proxy advisory firm and vacated certain of the SEC’s proxy rule amendments, holding that “the ordinary meaning of ‘solicit’ at the time of Section 14(a)’s enactment does not reach proxy voting advice for a fee” and therefore, by defining “solicit” and “solicitation” in such a way, “the SEC acted contrary to law and in excess of statutory authority.”

The SEC and the National Association of Manufacturers (NAM) appealed the District Court’s ruling. Subsequently, in August 2024 the SEC dismissed its appeal leaving NAM as the sole appellant defending the definitional change in the amended rule. The D.C. Circuit reviewed the District Court’s grant of summary judgement de novo and affirmed the District Court’s ruling. The Circuit Court held that the ordinary meaning of “solicit” for purposes of Section 14(a) of the Exchange Act “refers to a request for proxy authority or a directed plea to exercise such authority in a particular manner” and that proxy voting advice “rendered by a third party for a fee falls outside that definition” and is “simply a recommendation.” The Circuit Court further held that the SEC’s effort to expand the definition of “solicitation” to include proxy voting advice cannot be reconciled with the text of Section 14(a) and such effort was contrary to law.

The opinion of the U.S. Court of Appeals for the District of Columbia Circuit is available here.