BUSINESS LAW
Margot Graham
In Ahmasuk v. State, Department of Commerce, Community & Economic Development, Division of Banking & Securities, 478 P.3d 665 (Alaska 2021), the supreme court held that a newspaper opinion letter submitted by a shareholder did not constitute a shareholder proxy solicitation mandating that the shareholder file the letter with the Alaska Division of Banking & Securities. (Id. at 666). Ahmasuk, a shareholder of Sitnasuak, wrote an opinion letter published in the Nome Nugget, which advocated that shareholders not vote through discretionary proxy. (Id. at 669–70). After a complaint from a director at Sitnasuak, the Alaska Division of Banking & Securities determined that Ahmasuk’s letter was a proxy solicitation and that Ahmasuk violated Alaska law by not filing a disclosure. (Id. at 670–71). The Alaska Division of Banking & Securities punished Ahmausk with a $1,500 fine and ordered him to comply with state laws and regulations. (Id. at 671). Both the Administrative Law Judge and the Superior Court upheld the Alaska Division of Banking & Securities’ order. (Id. at 671–72). On appeal, Ahmasuk argued that his letter was political speech protected under the First Amendment, did not constitute a proxy solicitation, and did not contain false or misleading information. (Id. at 671). The supreme court reversed the lower court’s decision, reasoning that the Division of Banking & Securities’ interpretation of what constitutes a proxy solicitation was too broad. (Id. at 677). The court further reasoned that this broad interpretation would be difficult to enforce evenly and would hinder free-flowing corporate governance discussions. (Id.) Since Ahmasuk did not solicit the execution or non-execution of a proxy, the supreme court determined that his letter was not a solicitation covered by the Division of Banking & Securities’ regulation. (Id. at 678). Reversing the lower court’s decision, the supreme court held that a newspaper opinion letter submitted by a shareholder did not constitute a shareholder proxy solicitation mandating that the shareholder file the letter with the Alaska Division of Banking & Securities. (Id. at 666).
