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July 11, 2012
Experiment in Proxy Access for Retail Investors to End
    by Robert Kropp

Citing persistent regulatory obstructions, Moxy Vote announces that it will cease operations on July 31st, ending a service to help individual investors vote their proxy ballots.


Moxy Vote, the online platform for the voting of their proxy ballots by retail investors, announced yesterday that it will cease operations at the end of this month. Despite having gained some 200,000 registered users since it launched in 2009, Moxy Vote indicated that regulatory barriers to the involvement of individual investors in the US proxy system was the primary cause for its demise.

In a statement posted on Moxy Vote's home page, co-founder Mark Schlegel wrote, "Although we accomplished a great deal, we leave with a sense of disappointment at not being able to fully realize our vision for Moxy Vote. While we hope to revive Moxy Vote at some point in the future, we must first focus on regulatory change if Moxy Vote, or any individual investor-focused proxy voting platform, is to succeed."

The regulatory changes to which Schlegel refers were documented in Moxy Vote's submission to the Securities and Exchange Commission (SEC) in 2010, when the Commission invited public comment on its Concept Release on the US Proxy System. Schlegel documents Moxy Vote's comments as follows:

1. Individual shareholders have no legal grounds to compel their brokers to deliver ballots electronically to internet voting platforms. And, unfortunately, many brokerage firms have stated clearly to us that they will send them only when required to do so by regulators.
2. Proxy distribution/collection agents are presently charging significant fees to internet voting platforms for vote collection - a fee that should be paid by public companies and one that proves substantially more burdensome to individual voters than institutional voters.

As a result, Schlegel continued, "It's not sustainable for Moxy Vote to keep its operations alive while it seeks resolution on these issues, given that both must be addressed to generate the user growth needed to achieve profitability."

James McRitchie, a corporate governance advocate, told Reuters, "The more successful Moxy Vote was at getting people to vote on their platform, the more money they lost."

The sustainability focus of Moxy Vote can be seen in its list of advocates, which includes a number of sustainable institutional investors.

In April, Moxy Vote encouraged individual investors to support shareowner resolutions addressing hydraulic fracturing at Chevron and Exxon Mobil, inviting them to join As You Sow and Green America in calling on the companies to produce reports "outlining the potential hazards, effects and necessary precautions surrounding hydraulic fracturing."

 

 
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