SAF has sent a letter to members of the House Financial Services Committee urging members of the Committee to oppose HR 2364, the Investor Choice Against Gun Proliferation Act. This legislation would force all publicly listed companies to disclose in their annual reports to the Securities and Exchange Commission any “substantial financial relationship” with firearms and ammunition manufactures, retailers, and distributors.
The legislation offered by Gregory Meeks (D-N.Y.) would in effect allow members of Congress who support this legislation to forgo their Congressional duties to oversee policy, including social policy, and instead have a financial regulator administer the compliance of this bill. The SEC was established to police fraud and oversee investor protection in the marketplace, not carry out the social agenda of some members.
This is not the first-time members of Congress have turned to financial regulators to provide oversight of industries they find unsavory. Under Dodd-Frank’s “Miscellaneous Provisions,” or Title XV, there has been a concerted push by some in Congress to compel the SEC to become an activist agency by forcing companies to disclose mine safety violations, resource extraction in countries abroad and “conflict minerals originating in the Democratic Republic of the Congo.”
By taking shareholder’s considerations out of their hands and forcing all publicly listed companies to disclose their relationship with completely legal businesses operating in the firearms community, the supporters of HR 2364 know this would create a public database, ripe for weaponization by those who disagree with firearms at large. Not surprisingly, it can be expected that this disclosure would fuel activists to intimidate non-firearms related businesses into terminating their relationship with those in the firearms industry. This intimidation is similar to members of Congress calling on large banks to stop banking and lending to firearms businesses.
Additionally, activist legislation like this discourages companies from going public at a time when new-IPO’s are at one of its lowest points in history and members of Congress on both sides have expressed worry about this trend. Compliance burdens like these provide little additional incentive for businesses to go public, given the increased compliance burdens.
For these reasons, Congress should reject this legislation as it would seek to undermine current and future business operations with legal entities.
Click here to see the full letter.