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Strategic Investigation Tips Shareholder Vote in Proxy Contest

When an activist investor and his dissident nominees engaged in a multiyear shareholder activism campaign against a publicly traded U.S. financial services company — advocating for changes to the company’s board, executive leadership and business strategy — FTI Consulting was engaged to investigate the activist, provide comprehensive research on board nominees and support informed shareholder decision-making to protect the company’s governance and growth plans.

Our Impact:

The investigation uncovered findings that enabled the client to challenge the activist’s credibility in shareholder communications, including a foreign court’s determination of civil liability for fiduciary breaches, self-enrichment without board approval and relocating a company without considering tax implications.
Significant conflicts of interest were discovered related to the activist’s investment in a competitor and his publication of stories about the company’s board in media websites he owned without disclosing his involvement.
Previously overlooked details involving fraud and bankruptcy were uncovered while vetting the company’s own nominees, leading to the withdrawal of one prospective company nominee and the avoidance of potential reputational damage.
Empowered with evidence of material conflicts, the client’s shareholders rejected the activist’s mandate for change, as well as two of three dissident nominees, in a contested proxy fight, preserving the company’s strategic continuity.

Our Role:

FTI Consulting experts conducted comprehensive investigative research into the activist, the dissident nominees and the company’s own board nominees by examining financial records, corporate filings, litigation history and business affiliations.
The team analyzed the historical performance and governance records from prior board service of all potential nominees to identify risks and track records of poor execution.
Utilizing verified information on conflicts of interest and prior legal findings, our experts produced a thorough, actionable briefing for the company’s board, management and outside counsel.
FTI Consulting experts aided the company in presenting these findings to shareholders, ensuring that key risks and investigative findings were communicated clearly and effectively to influence informed voting decisions.