State of West Virginia ex rel. McCuskey v. Institutional Shareholder Services, Inc.

On May 20, 2026, the attorneys general of Iowa, Nebraska, Texas, and West Virginia each filed a lawsuit in state trial courts against the proxy adviser Institutional Shareholder Services, Inc. (ISS) alleging that ISS violated state deceptive trade practice and consumer protection laws by failing to disclose how environmental, social, and governance (ESG) considerations affected ISS’s advice to its shareholder clients. Florida previously filed a similar suit against ISS and Glass, Lewis & Co. LLC. West Virginia asserted violations of the West Virginia Consumer Credit and Protection Act. The complaint alleged that ISS “misrepresented its commercial services by claiming to provide objective, financially-driven analysis while actually subordinating client financial interests to undisclosed, non-pecuniary objectives and third-party commitments.” The alleged non-pecuniary criteria and considerations included adoption of climate change-related policies and inclusion of reports grading companies on management of greenhouse gas emissions. The complaint alleged that ISS failed to disclose the role of third-party inputs in its advice and also failed to disclose conflicts of interest created by its maintenance of a consulting service. The complaint sought declaratory and injunctive relief; civil penalties; restitution, disgorgement, or other equitable relief; and costs, fees, and expenses.