Alaskans Overreach

In a recent no-action letter, the SEC allowed Alaska Air Group to omit from proxy materials a novel attempt to rein in 10b-5 liability. The proposal would have limited damages in suits that use the fraud-on-the-market theory to show reliance. Alaska Air Group sought to exclude the proposal along with two others submitted by the same shareholder. The SEC never reached Alaska Air's substantive argument against the proposal - they relied on an informal rule that shareholders can make only one proposal per meeting.