– Attorneys general from Texas, Nebraska, Iowa and West Virginia have launched coordinated lawsuits against proxy advisory firm ISS, alleging the company misled investors while advancing ESG and DEI policies through its corporate voting recommendations. The cases accuse ISS of breaching consumer protection laws and placing political objectives ahead of shareholder value.
The lawsuits claim ISS presented its advice as independent and focused on maximizing financial returns while allegedly promoting climate and diversity goals linked to activist organizations. State officials also alleged conflicts of interest tied to the firm’s ESG consulting business, arguing ISS advised companies on improving ESG ratings while simultaneously influencing shareholder votes on related issues.
Texas attorney general Ken Paxton said ISS had pushed a ‘radical political agenda’ that harmed investors and companies. Nebraska attorney general Mike Hilgers accused the firm of disguising ‘political activism as financial advice’, while West Virginia officials said the company endangered energy security by backing anti-fossil fuel policies.
ISS rejected the allegations, saying its recommendations are based on client-selected policies and fiduciary obligations. The lawsuits follow on from similar lawsuits launched in 2025 by Glass Lewis and ISS against Texas Attorney General Ken Paxton in federal court, to block enforcement of the state’s proxy advisor law (SB 2337).
– President Donald Trump abruptly postponed a planned executive order on AI after objecting to parts of the proposal aimed at increasing oversight of advanced models.
As reported by The Financial Times (paywall), the order would have asked companies including OpenAI, Google and Anthropic to voluntarily submit AI systems for government reviews focused on national security and cyber-security risks.
‘I didn’t like certain aspects of it,’ Trump said, adding he did not want regulation to weaken the US advantage over China. The decision followed weeks of internal disagreements within the White House over the scale of AI oversight.
The proposed framework stopped short of mandatory regulation and instead relied on voluntary co-operation from leading developers. Under the plan, companies would have shared models with the government 90 days before public release.
The debate intensified after officials reviewed Anthropic’s Mythos model, which reportedly exposed vulnerabilities in parts of the US banking system.
– The US Department of Justice has secured a $30 mn settlement with PayPal following an investigation into the company’s DEI investment program. Officials said the initiative unlawfully favored Black and minority-owned businesses in violation of federal fair lending rules.
Under the agreement, PayPal will launch a new small business initiative that excludes race or national origin as eligibility criteria. The company will waive processing fees on $1 bn of transactions for eligible US small businesses, including those owned by veterans or operating in farming, manufacturing and technology. The fee waivers are valued at about $30 mn.
The investigation focused on a $530 mn fund launched in 2020 to support underrepresented communities. PayPal did not admit wrongdoing as part of the settlement. The case reflects wider scrutiny by the Trump administration of corporate DEI programs.
– Elon Musk has lost his lawsuit against OpenAI after a California jury ruled the billionaire waited too long to file claims accusing the company of abandoning its original non-profit mission.
According to Reuters (paywall), the verdict removes a major legal obstacle for OpenAI as it considers a potential initial public offering that analysts say could value the company at as much as $1 tn.
During the case, Musk alleged OpenAI and chief executive Sam Altman shifted the company toward profit at the expense of its founding commitment to develop safe AI for humanity. He sought more than $150 bn in damages and attempted to block the company’s restructuring.
OpenAI argued Musk had long known about plans to create a for-profit arm and claimed the lawsuit was driven by competition following the launch of his AI company, xAI. Musk’s legal team said he planned to appeal the decision.
– Billionaire investor Bill Ackman said his hedge fund, Pershing Square Capital Management, has built a new stake in Microsoft, betting the technology group’s AI-driven growth potential is undervalued following a recent decline in its share price.
According to The Wall Street Journal (paywall) Ackman says the investment was made during the first quarter and would be disclosed in regulatory filings.
Ackman described Microsoft’s valuation as ‘highly compelling’ and pointed to the strength of its Microsoft 365 software business and Azure cloud platform. He also highlighted the company’s partnership with OpenAI as a key driver of long-term growth.
Microsoft shares rose about 3 percent following the announcement.
– Costco Wholesale has asked a federal judge to dismiss a proposed class action lawsuit accusing the retailer of failing to refund customers for tariff-related price increases following a US Supreme Court ruling that struck down Trump’s import tariffs.
The lawsuit, filed in Illinois federal court, argues Costco should pass on any refunds it receives from the government for tariffs collected under the International Emergency Economic Powers Act. As reported by Reuters, Plaintiffs claimed consumers ultimately absorbed the higher costs through increased prices.
Costco called the claims speculative and said shoppers voluntarily paid clearly displayed prices. The company argued customers ‘got what they paid for’ and said it never promised future refunds.
Costco has said it has not yet received any refunds and has not determined how potential repayments would be shared with customers.
Natalie Bannerman
Natalie is a former telecoms and infrastructure journalist, a role she held for nearly seven years. Before this, she worked in the B2C startup space, covering lifestyle, arts and culture reporting. As senior reporter for Governance Intelligence she...
