Missouri secretary of state ends fight to impose 'anti-woke' investing rule
JEFFERSON CITY — Missouri Secretary of State Jay Ashcroft has dropped his appeal of a lawsuit over “woke investing” rules after a more than yearlong legal fight.
In exchange for asking a federal appeals court to dismiss the challenge, the winners of the court battle agreed to reduce their legal bills to $500,000, potentially saving state taxpayers money.
U.S. District Judge Stephen Bough signed off on the deal Monday, writing that a payment from Ashcroft’s office to attorneys with the Securities Industry and Financial Markets Association must be made within two weeks.
The judge’s order brings to an end a 2023 lawsuit filed by the association over Ashcroft’s proposed rules requiring securities firms to obtain written permission from investors before incorporating a “social objective” or other “nonfinancial objective” into their investment recommendations.
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The regulation was part of a Republican-led push to crack down on socially driven investment policies designed to account for the effects of businesses on the environment and other so-called woke issues.
During his unsuccessful campaign for the Republican gubernatorial nomination, Ashcroft railed about the alleged dangers of investing based on the environmental, social and governance practices of businesses.
“ESG investing opposes fossil fuels, pushes unionization of private companies, pushes radical racial and gender equity over merit, and flexes their influence over who is chosen to sit on corporate boards,” his campaign website said.
Bough ruled in August that Ashcroft’s proposed regulations threatened to do “irreparable harm” to financial advisers operating within Missouri.
The judge also warned against using political talking points in setting rules and regulations affecting companies and taxpayers.
Before the appeal was dropped, the securities association had said it was owed $1.3 million in legal fees from the state.
With that amount reduced, the overall cost of the election-year lawsuit is likely to be under $2 million. Rather than use the state-funded attorney general’s office to defend the case, Ashcroft hired the politically connected Graves Garrett Greim law firm.
The Kansas City-based firm has been paid $1.1 million thus far.
A spokesman for Ashcroft did not respond to a request for comment.
Learn about the secretary of state’s duties, term and salary.
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