State revises Native corporation proxy rules, shortening time to seek investigations

The Alaska Division of Banking and Securities on Wednesday revised its proposed rules for proxy campaigns at Alaska Native corporations, including a change that would leave less time to ask the state to investigate alleged violations.

Shareholders can vote by proxy in board elections and other votes, giving someone else written authority to cast their votes, and the state rules govern how proxies are sought. Under the revised proposal, a shareholder, director or officer harmed by an alleged violation would have 60 days after a shareholder vote to request an investigation, down from 90 now.

If a violation couldn't reasonably have been discovered in time, the deadline would be 60 days from discovery, also down from 90.

The rules cover only corporations with 500 or more original shareholders, under a state law that took effect in June. In a May 5 letter in the legislative record, the division counted 59 corporations under its jurisdiction. About 22 had 500 or more original shareholders, seven did not and 30 were still being researched.

The proposal also spells out when talking about a vote counts as soliciting proxies. A shareholder who isn't a "participant," the rules' term for those who carry out or finance a proxy campaign, could say how they plan to vote and urge others to vote a particular way without it counting as solicitation. Proxyholders would count as participants. People who contribute $500 or less still would not.

In 2021, the Alaska Supreme Court threw out a $1,500 penalty the division had issued to a Sitnasuak Native Corporation shareholder over a letter to the editor urging shareholders not to vote by discretionary proxy. The court found the letter wasn't a proxy solicitation and called the division's interpretation and application of its rule "unreasonable."

Board nominees already must disclose final judgments from the past 10 years finding unethical or illegal business practices or violations of fiduciary duty or securities law. The proposal adds violations of the state's ANCSA proxy and stock law.

Filings, which can now be made on paper, on digital media or electronically, would have to go through the division's online portal or another approved electronic method, unless the division waives that on written request. The proposed regulations would also repeal the current filing fee of $250 plus up to $25,000 based on assets. The division estimates the changes would cost private persons nothing to comply with.

The division first proposed changes on July 23, 2025, and said it modified them in response to comments. Public comment is open until 4:30 pm Dec. 18.