By Dominic Jones | Published: July 4, 2007 | 
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My bad experience with first e-proxy notice
THE first companies to take advantage of the U.S. Securities and Exchange Commission’s new e-proxy process have sent out their notices to investors telling them where to find their annual reporting documents on the Web.
Applied Micro Circuits Corporation (NASDAQ: AMCC), a small-cap technology firm, was the first company to catch my attention when it filed its notice under the e-proxy process with the SEC on Monday, a day after the rule’s July 1 start date.
According to the company’s notice, investors can obtain AMCC’s annual report and its “Notice of Proxy Statement/Annual Report on Form 10-K” not by visiting its own website but by going to the following URL: www.investoreconnect.com
Of course, while you and I are viewing this link on our computers, most AMCC shareholders will be receiving it on paper in the mail. They have to access a computer and then type in the URL in their browsers manually.
I just did that and something happened that probably will happen to more than a few people. I typed www.investorconnect.com and landed on the strange page shown in the screenshot below.
It took me a while to figure out that this wasn’t where I was supposed to be. It’s a spam website set up for the specific purpose of fooling people into clicking on pay per click ads. At first I thought AMCC had misprinted the URL, but I figured out that I misread the URL and typed in investor connect instead of investor Econnect.
How many people do you think will make that mistake? Oh yeah, and whoever owns that spam website must be smiling because they’re going to be making money hand over fist with all the “typo traffic” they’re going to be getting courtesy of Broadridge Financial Solutions, the huge shareholder communication firm that owns the investorEconnect.com domain that shareholders are supposed to use. This past proxy season, Broadridge processed over 156 million pieces. That’s a lot of potential typo traffic!
Now here’s the thing. According to Internet registry records, Broadridge only registered its domain on May 17, 2007 (boy, were they ever racing to get ready for July 1.), while the other domain being used for the ad spam site was created on August 22, 2004.
In other words, someone at Broadridge knew, or should have known, that there was a very similar URL already on the Web. And that people make mistakes when they type in URLs from memory or from paper. A 10-year-old could tell you that. There’s an entire industry built around it.
Anyway, that was my first impression with the first e-proxy by a U.S. company. It only gets worse from there… But I’ll save that for another post.
Related:
- SEC mandates online proxy materials
- E-proxy: do it for love, not money
- Is Shareholder.com client breaching SEC privacy rules?
Related posts:
- BGC proves notice-and-access releases work
- The SEC’s requirements for online annual reports and proxy statements
- SEC’s Aguilar: Fix e-Proxy or scrap it
- 7 fixes for the SEC’s notice-and-access proxy process
- Despite poor retail vote, SEC may relax E-proxy deadline
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July 6th, 2007 at 5:04 pm
I followed the first link above and then proceeded to type the proxy URL and found myself confused, just like you did. I knew I was in the wrong place, but never thought to double-check the URL as it seemed so obvious (without the ‘e’). I chuckled once I then read your fifth paragraph and screenshot.
The really sad thing is that the “real” homepage produced by Broadridge isn’t much better at affirming the user’s visit with something that looks authentic, viable and secure.
July 9th, 2007 at 9:09 am
Gene,
You’ve hit on one of the issues I was planning to follow up with. You’re absolutely spot on. In this age of phishing and other web-based scams, why would I or anyone else trust a notice that arrived in the mail with a link to a website I’ve never heard of?
Then, if you type in the URL (correctly, we hope) you’re greeted by a page branded with Broadridge’s logo that immediately interrogates you for your control number. No indication of what will happen if you put your numbers in that little box.
Now, remember that Broadridge is not even a year old. Almost no one has heard of the company. And it sounds a little like some kind of golf course residential development or something. And their corporate colors probably reinforce that view.
It makes me sad to see companies put so little thought and effort into the e-proxy process.
July 10th, 2007 at 1:13 pm
Dominic, I found your EProxy (a.k.a. “Notice and Access”) bad first experience quite amusing…but there are also troubling aspects to the prevailing vendors’ EProxy sites that are likely to chase shareholders back to the paper option (undermining the good initial intent of EProxy):
The SEC ruling plainly states that urls to EProxies are to be PUBLIC, DIRECT, REQUIRING NO NAVIGATION TO ACCESS PROXY MATERIALS. The websites are also to use NO IDENTIFYING TECHNIQUES (such as cookies).
But the SEC added a twist in the final rule (likely a result of lobbying by providers) that says the “Notice” should include the personal voting code. This has been used to lead corporations into agreeing that “Access” to materials be preceded by–effectively–a login with a voting code (technical only necessary to execute–or vote–a proxy card).
This seems to me to contradict the conditions in caps above. At the minimum, the shareholder that wants to access the material without code in hand, or preliminary to a voting decision.
BTW–Broadridge used to be a part of ADP until recently spun off, so they are a well-heeled player in this market.
July 10th, 2007 at 4:57 pm
Mike,
Interesting observation. The control numbers should only be required to vote, not to access the materials to make an informed vote.
As for Broadridge and how well known it is, most shareholders won’t know, or care, who Broadridge is. Even if they said they were formerly part of ADP, it wouldn’t make much difference. It’s not like ADP is a household name either. Notice how even people who know, or should know, almost always refer to Broadridge as “formerly part of ADP.”
July 10th, 2007 at 8:38 pm
[...] My bad experience with first e-proxy notice [...]
July 18th, 2007 at 10:51 pm
I went to the investoreconnect.com and it keeps telling me I have an invalid control #. I went to the correct site and when it didn’t work, I went to the co. site, nothing there, then to the spam sites mentioned above. Back to the correct site only to be told again I have an invalid #. What gives?
July 21st, 2007 at 11:00 am
This was my first experience at trying to vote on a proxy via the internet. I feel like I have been deceived and mislead. It just re-enforced my feeling of distrust using the internet for anything personal. Thank you for your comments.
July 21st, 2007 at 8:13 pm
Alice,
Thanks for commenting about this. I know a lot of people share your concerns. I have received emails from investors and noticed a lot of people trying to find out about investorconnect.com and investoreconnect.com by seaching for more information, and then ending up here.
My suggestion to anyone concerned about the process is to contact the companies who stock you own and tell them that they should post their annual meeting materials on a website their shareholders are familiar with, such as their corporate websites, and then provide links from those materials to the voting site.
I also urge anyone who has difficulty using the online materials to contact their companies.
Of course, you can also leave a comment here and you can be sure it will be read by people who have the power to do something about it.
July 25th, 2007 at 8:34 pm
I TRIED THE WEB SITE http://WWW. INVESTORECONNECT.COM AND GOT NO WHERE. PLEASE IN THE FURUTE SEND ME A REGULAR PAPER MAIL COPY IF YOU WANT ME TO VOTE..
July 25th, 2007 at 8:36 pm
I HOPE THAT MY INVESTMENTS IN BLACKROCK DO A BETTER JOB THAN YOUR PROXY SITE
MARDINEL@AOL.COM
July 26th, 2007 at 5:48 pm
I tried to sign on to this site. But its not there. I want to vote.
So I would like to see the proxy materials.
Meeting is to be held on 8/23/07 or 9/7/07
July 26th, 2007 at 8:02 pm
Frustrating!!!!
I tried Yahoo, Firefox, and finally went back to Internet Explorer and the web site came up on first try.
ML (Blackrock) you need to specify what browser to use to make this eballot work correctly.
Have a good day.
August 1st, 2007 at 12:43 am
THE FIRST TIME I TRIED THE INVESTORECONNECT.COM SITE I GOT THROUGH THEN TRIED TO USE IT TO-DAY AND CAN’T GET ANYWHERE, WE SHOULD’NT HAVE TO WORK SO HARD TO VOTE OUR PROXY’S I THINK I WILL GO BACK TO PAPER BALLOT’S.