Texas sues Glass Lewis over proxy advice disclosures

Texas Attorney General Ken Paxton filed a lawsuit against proxy advisory firm Glass Lewis on July 29, 2026, alleging deceptive trade practices. Paxton claims the firm pushes environmental, social, and governance (ESG) ideologies rather than objective financial advice. Glass Lewis denied the allegations, defending its recommendations as grounded in long-term shareholder value. The suit utilizes the Texas Deceptive Trade Practices Act, bypassing First Amendment issues that blocked similar laws in other states.

Texas lawsuit against Glass Lewis

• ▪Glass Lewis denied the allegations in the Texas lawsuit, stating that the complaint mischaracterizes the firm's advice and business practices.
• ▪Texas Attorney General Ken Paxton filed a lawsuit against Glass Lewis in the Texas District Court for Collin County on July 29, 2026, alleging deceptive trade practices.

Proxy advisory market influence

• ▪Glass Lewis advises more than 1,300 investment managers whose clients collectively manage $40 trillion in assets across 100 markets.
• ▪Glass Lewis and Institutional Shareholder Services together control more than 90% of the proxy advisory market, giving them significant influence over institutional investor votes.

ESG factors in voting recommendations

• ▪Texas Attorney General Ken Paxton alleges that Glass Lewis falsely advertises its proxy voting advice as objective while actually weighing environmental, social, and governance factors.
• ▪The Texas lawsuit alleges that Glass Lewis's proxy voting guidelines call for every corporate board to establish a reasonably diverse nominating and governance committee.

Consumer protection law strategy

• ▪The Texas lawsuit against Glass Lewis relies on the Texas Deceptive Trade Practices Act, a state consumer protection law amended in 2025.
• ▪The Texas lawsuit differs from proxy advisor disclosure-mandate laws in Kansas and Indiana that federal courts blocked on First Amendment grounds in June 2026.

Republican opposition to ESG

• ▪Texas Attorney General Ken Paxton, who filed the lawsuit against Glass Lewis, is the Republican nominee for the U.S. Senate in Texas for the November 2026 election.
• ▪The lawsuit against Glass Lewis extends an ongoing legal conflict between Republican state officials and the two dominant firms in the proxy advisory market.

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