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Dear Friends of Moxy Vote,
It is with great disappointment today that I announce
the closing of Moxy Vote. Our last day of business will
be July 31, 2012. At this time, we want to thank all of
our clients, friends and business partners that have
supported us since our launch in 2009. Although we
accomplished a great deal, we leave with a sense of
disappointment at not being able to fully realize our
vision for Moxy Vote. While we hope to revive Moxy Vote
at some point in the future, we must first focus on
regulatory change if Moxy Vote, or any individual
investor-focused proxy voting platform, is to succeed.
It is important for us to state that we did not arrive
at this decision easily. We recognize that this step is
disruptive to our employees, clients and business
partners who had committed time and energy to building
relationships with us. We entered into many of these
relationships with great uncertainty around our product
offering and value proposition, and we are forever
grateful to all those who took a chance on us. We are
not a group of people who walk away from a challenge and
appreciate the trust offered to us by many. Moxy Vote
fought hard to make its business model a success. In
fact, we invested over $4.5 million dollars in our
operations since inception – all to advance a mission of
engaging individual investors and improving proxy
voting. Although the Moxy Vote website, moxyvote.com,
will be shut down on July 31, 2012, we plan to continue
to engage regulators and policy makers in an effort to
blaze a trail for future "Moxy Votes."
It seems appropriate at this time to explain our
rationale for closing. The simple answer is that we were
unable to make any tangible progress on several key
barriers to our success. These obstacles have been known
for some time. In fact, we documented them very clearly
nearly two years ago in our response to the Securities
and Exchange Commission's request for public comment on
its publication entitled Concept Release on the U.S.
Proxy System. For those that are interested, our
comments can be
read here.
In summary, our efforts thus far lead us to conclude
that there are two primary obstacles that will prevent
any individual investor-focused proxy voting websites
from being successful. They are the following:
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Individual shareholders have no legal grounds to
compel their brokers to deliver ballots electronically
to internet voting platforms. And, unfortunately, many
brokerage firms have stated clearly to us that they
will send them only when required to do so by
regulators.
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Proxy distribution/collection agents are presently
charging significant fees to internet voting platforms
for vote collection – a fee that should be paid by
public companies and one that proves substantially
more burdensome to individual voters than
institutional voters.
We have been working diligently on our business model
since 2007 and the same two issues that were identified
in our early analysis are still present. The unfortunate
conclusion we have recently made is that the mere
existence of our site and growth in our user-base is not
expediting regulatory change. Rather, it appears that
regulatory change can be achieved only through steady
plodding over a period of many years. We appreciate the
assistance given by many individuals at the U.S.
Securities and Exchange Commission, the New York Stock
Exchange and the Financial Industry Regulatory Authority
in helping us to reach this conclusion. It's not
sustainable for Moxy Vote to keep its operations alive
while it seeks resolution on these issues, given that
both must be addressed to generate the user growth
needed to achieve profitability. We are disappointed
that we were not able to resolve these issues.
One issue that is noticeably absent from our list is
individual investor apathy. For many years, one of the
leading arguments for the lack of meaningful
participation from individual investors is that they
simply do not care. While this statement may have been
true historically (and for many good reasons!), the
internet is revolutionizing citizen and investor
engagement. The internet has enabled individuals to
unite and thereby wield enormous influence. For example,
one doesn't have to look further than the social
activism efforts facilitated by Change.org and
Care2.com, among others, to realize that citizen
engagement is broad and effective. Moxy Vote brought
this same concept to investor engagement and proxy
voting. For example, below are a few of Moxy Vote's
accomplishments:
-
197,000 subscribers to Moxy Vote's content e-mails
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56 leading advocate organizations posting voting
advice on moxyvote.com
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30,000,000 shares voted (intelligently!) using this
advice through moxyvote.com
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64 "Letters to Management" sent by Moxy Vote readers
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275,000 signatures, in aggregate, on the Letters to
Management
In summary, we should not blame the individual
investors. The investors are ready to engage when the
policy makers are ready to give them a fair opportunity.
I want to conclude by reiterating that we are not giving
up the fight for individual investors. We plan to
continue to engage regulators and policy makers to
ensure that individual investors are given the same
opportunities as institutional investors. Moreover,
given our success in certain areas, we are actively
engaged in discussions with outside firms that have
shown an interest in continuing various aspects of our
service. Many areas of our business model showed
positive results but, given our focus on improving proxy
voting as a key area of engagement, we do not desire to
pursue these other opportunities.
We encourage the rest of you to continue with your own
efforts and to share these key issues with policy makers
if given the opportunity. Moreover, if we can be of
assistance in helping you overcome similar obstacles,
please let us know. Progress is being made, albeit more
slowly than many of us would like, and we can all look
forward to continued improvements in the future.
Best regards on behalf of the entire Moxy Vote Team,
Mark F. Schlegel
Co-Founder, Moxy Vote LLC |
