Proxy materials must be filed with the division.

In addition to regulating the securities industry in Alaska, the division, through the Securities, is the recipient of filings of copies of proxy solicitation materials for qualifying ANCSA (Alaska Native Claims Settlement Act) corporations. Under AS 45.55.139 of the Alaska Securities Act, passed in 1977, proxy solicitation material being made available to at least 30 Alaska resident shareholders must be filed with the Securities, at the same time of their distribution to shareholders, if the ANCSA corporation has at least 500 shareholders and more than $1 million in total assets.

Sec. 45.55.139. Reports of corporations. A copy of all annual reports, proxies, consents, authorizations, proxy statements and other materials relating to proxy solicitations distributed, published, or made available by any person to at least 30 Alaska resident shareholders of a corporation that has total assets exceeding $1,000,000 and a class of equity security held of record by 500 or more persons and which is exempted from the registration requirements of AS 45.55.070 by AS 45.55.138, shall be filed with the administrator concurrently with its distribution to shareholders.

ANCSA corporations’ stock was exempted from registration by AS 45.55.138:

Sec. 45.55.138. Application to Alaska Native Claims Settlement Act corporations. The initial issue of stock of a corporation organized under Alaska law pursuant to 43 U.S.C. 1601 - 1628 (Alaska Native Claims Settlement Act) is not a sale of a security under AS 45.55.070 and 45.55.990(10).

First, since ANCSA corporations’ stock is not freely tradable, congress decided to exempt these companies from the proxy rules of the United States Securities and Exchange Commission (SEC). In 1971, it was thought that the shares would become tradable in 20 years, at which time the corporations would come back under the SEC’s rules. Shortly before 1991, however, the date for tradable shares became less definite in time.

Second, in the 1970s there was a consensus that some rules were needed to deal with proxy solicitation abuses involving issues such as the lack of disclosures and misleading solicitations. By requiring a filing under the Alaska Securities Act, the materials are subject to AS 45.55.160 that prohibits misleading filings with the division and subjects the filers to possible penalties under AS 45.55.920.

Sec. 45.55.160. Misleading filings. A person may not, in a document filed with the administrator or in a proceeding under this chapter, make or cause to be made an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading.

Third, in 1981 the division adopted regulations at 3 AAC 08.305-365 covering such areas as the required disclosures for a proxy solicitation (3 AAC 08.345 for board solicitations and 3 AAC 08.355 for nonboard solicitations), required form of the proxy (3 AAC 08.335), and false and misleading solicitations (3 AAC 08.315).

Anyone soliciting proxies as long as the criteria of AS 45.55.139 are met.

The materials may be filed with the division at:

(This is a temporary address change)

Department of Commerce, Community, and Economic Development
Division of Banking, Securities and Corporations
Securities
550 W. 7th Avenue, Suite 1940
Anchorage, AK 99501

The materials may be faxed to the Securities at (907) 269-8146.

Please note that filled out petitions should not be filed with the division, but only the blank petition need be filed at the same time it is made available to at least 30 shareholders.

If you believe proxy solicitation materials are false and misleading, or in some other way violate the AS 45.55.160 or the regulations at 3 AAC 08.305-365, you may file a written complaint with the Securities at the same address as where the materials are filed.

Your letter should include as much information as you need to support your allegation. You should describe specifically the material in question, providing a copy along with the complaint. You must provide a basis, or reason, for your complaint. So, for example, if you believe a statement is false, you should include evidence as to its falsity.

A complaint is assigned to a Securities Examiner who will determine if the division has jurisdiction in the alleged matter, and if there is sufficient cause to require a response from the person being complained about (called the respondent). The person filing the complaint is called the complainant. Click here for ANCSA Complaint Form.

The division’s jurisdiction is limited to enforcing the Alaska Securities Act (AS 45.55) and its proxy regulations (3 AAC 08.305-365). So, for example, the division clearly has jurisdiction regarding proxy-related materials that are made available to at least 30 resident shareholders. We have jurisdiction over allegations involving:

• False and misleading solicitations;
• The form of the proxy; and
• The disclosure items required in a proxy statement

The division does not have jurisdiction involving federal laws or Title 10 (the Corporation Code at AS 10.06). So, for example, if your complaint about a corporation involves your rights as a shareholder to access the books and records of the corporation under Title 10, that statute provides for a private right of action. That is, you may be able to sue the corporation, but not to file a complaint with the division. For these types of disputes, it is advisable to consult with legal counsel.

If the division has jurisdiction and the Examiner believes there is sufficient reason to require a response, the complaint will be sent to the respondent for a response. If necessary, further communication with the complainant may also be made. If the Examiner determines that a violation of the law or regulations has occurred, after a reasonable investigation of the matter, the division may issue an order against the respondent under AS 45.55.920. Generally, the division may issue a cease and desist order requiring the person to stop violating the Act, it may require a 10-day prefiling of proxy materials before they are distributed to shareholders, or it may void proxies both before and after their exercise (if there is a violation of AS 45.55.160). In addition, the division may levy a fine against a person who violates the Act.

If a complaint is filed against you, you will be given an opportunity to tell the division your side. You should provide as much evidence as you can to support your answer. If, after a review of the evidence of the complainant and your evidence, the division issues an order against you, you have three options:

• You may accept the order, in which case it becomes final after 15 days following its delivery to you (AS 45.55.920(d)).
• You may propose a settlement with the division. These are dependent on the circumstances of the case and not easily generalized here.
• You may request a hearing and dispute the order before a hearing officer.

If you wish a hearing, you must request one within 15 days of your receipt of the order. You must provide a basis for your hearing request (see the hearing regulations at 3 AAC 08.930). You may represent yourself or hire legal counsel.

If you lose at the hearing, you may appeal the final order to superior court under AS 45.55.940.

You should note that the temporary order remains in effect until a final order is issued as a result of a hearing or of its acceptance by the respondent. An appeal of the final order to superior court does not operate as a stay of the order unless that is specifically ordered by the court (AS 45.55.940(b))