Key Takeaways
- • Texas Attorney General Ken Paxton dismissed with prejudice on Nov. 9, 2026 his state's lawsuit against Glass, Lewis & Co., which had alleged the proxy adviser prioritized an ESG agenda over clients' financial interests.
- • The suit alleged violations of the Texas Deceptive Trade Practices Act through "false, deceptive, and misleading practices of advertising independent and objective advice while secretly prioritizing a private agenda."
- • Glass Lewis said it "welcome[s]" the dismissal and reiterated its commitment to providing research for clients' voting decisions.
- • The dismissal comes amid broader scrutiny of proxy advisers from the Trump administration, the SEC, Republican lawmakers and state attorneys general.
- • Texas had sued rival proxy adviser Institutional Shareholder Services (ISS) on similar allegations shortly before suing Glass Lewis; ISS could not immediately be reached for comment.
Summary
Texas Attorney General Ken Paxton dismissed with prejudice on Nov. 9 a lawsuit accusing Glass, Lewis & Co. of prioritizing an ESG agenda over the financial interests of its clients, according to Pensions & Investments. The suit, which Paxton had filed earlier in 2026, alleged that Glass Lewis violated Texas law through "false, deceptive, and misleading practices of advertising independent and objective advice while secretly prioritizing a private agenda."
In response to the dismissal, a Glass Lewis spokesperson said, "We welcome the Attorney General's decision to dismiss with prejudice the State of Texas's unfounded lawsuit under the Texas Deceptive Trade Practices Act." The firm added that it "remains committed to providing our clients with the research and analysis they need to make informed voting decisions."
The dismissal is the latest development in an escalating dispute over the influence of proxy advisers. The Trump administration, the Securities and Exchange Commission, Republican lawmakers and state attorneys general have all increased scrutiny of the industry. Shortly before suing Glass Lewis, Texas sued proxy adviser Institutional Shareholder Services on similar grounds. An ISS spokesperson could not immediately be reached for comment, and a spokesperson for Paxton also could not immediately be reached.
Both lawsuits followed Texas legislation requiring ISS and Glass Lewis to flag when their recommendations consider nonfinancial factors such as ESG or diversity. However, shortly before that law was set to take effect in 2025, a federal judge halted its enforcement. The judge sided with ISS and Glass Lewis, which had filed separate federal lawsuits arguing the law violated the First and Fourteenth Amendments.
In response to the dismissal, a Glass Lewis spokesperson said, "We welcome the Attorney General's decision to dismiss with prejudice the State of Texas's unfounded lawsuit under the Texas Deceptive Trade Practices Act." The firm added that it "remains committed to providing our clients with the research and analysis they need to make informed voting decisions."
The dismissal is the latest development in an escalating dispute over the influence of proxy advisers. The Trump administration, the Securities and Exchange Commission, Republican lawmakers and state attorneys general have all increased scrutiny of the industry. Shortly before suing Glass Lewis, Texas sued proxy adviser Institutional Shareholder Services on similar grounds. An ISS spokesperson could not immediately be reached for comment, and a spokesperson for Paxton also could not immediately be reached.
Both lawsuits followed Texas legislation requiring ISS and Glass Lewis to flag when their recommendations consider nonfinancial factors such as ESG or diversity. However, shortly before that law was set to take effect in 2025, a federal judge halted its enforcement. The judge sided with ISS and Glass Lewis, which had filed separate federal lawsuits arguing the law violated the First and Fourteenth Amendments.
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