-Applauds legislation by Congressman Frank and seeks more protection for large investors –

View Letter to Congressman Frank

New York City Comptroller William C. Thompson, Jr. today called for an important amendment to be added to Congressman Barney Frank’s recently introduced legislation, H.R. 1327, or the “Iran Sanctions Enabling Act of 2009,” that would protect state and local government institutional investors from legal liability if they decide to divest in companies who continue to do business with countries such as Iran.

Citing the grim reality that nations such as Iran continue to engage in state-sponsored terrorism, Thompson applauded Congressman Frank for the legislation, which would authorize state and local governments to divest their assets in companies that do business with Iran.  However, he advocated that additional protections for large investors be included in the bill.

In a letter to Congressman Frank, which can be viewed at www.comptroller.nyc.gov , Thompson outlined the leadership of the New York City Pension Funds in this area, but noted that shareholder resolutions can only go so far.

“Since 2002, my office and the New York City Pension Funds have urged some of our nation’s largest companies to reconsider their ties with Iran and other nations that sponsor terrorism,” Thompson said. “Despite our efforts however, we have encountered certain companies that have been unresponsive to our outreach or have simply refused to address these issues. This creates an imposing hurdle for institutional investors – such as New York City’s Pension Funds – to uphold our fiduciary responsibility to protect the long-term interests of our investors.”

Thompson applauded the bill that Congressman Frank has introduced as a step in the right direction, and is seeking additional protections for large investors.

“Although the Iran Sanctions Enabling Act of 2009 would authorize state or local governments to divest its assets from, or prohibit investment of its assets in, companies that invest in Iran, including financial institutions that extend credit to invest in Iran, it would not address certain significant legal risks associated with divestment,” Thompson wrote.

Federal law does not protect institutional investors such as state or local governments from potential legal liability associated with short-term investment losses that may be realized as a result of divestment.  Comptroller Thompson recognized the Congressman’s leadership on this issue and is advocating for more protection from legal liability for investors who seek to divest in companies doing business with Iran.

“This will help institutional investors better discharge their duties and simultaneously advance humanitarian efforts and security around the globe.

On behalf of all New Yorkers, please accept my gratitude for your tireless efforts in this area and know that my staff and I remain available to assist you in any way necessary,” Thompson concluded.

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