Institutional Shareholder Services faced a lawsuit Wednesday from four Republican state Attorneys General who claim the proxy adviser deceived investors by marketing its voting recommendations as objective. West Virginia, Iowa, Texas, and Nebraska AGs allege ISS's advice reflects ESG ideological concerns rather than genuine financial analysis.

Nebraska AG Mike Hilgers stated in the complaint that ISS coordinates its recommendations closely with ESG activists rather than serving clients' best interests. Glass Lewis and ISS have long operated with minimal oversight despite mounting criticism over political bias and conflicts of interest.

Former U.S. AG Bill Barr's Torridon Law firm represented the states in the case. This legal action represents a serious challenge to the proxy advisory duopoly, which has historically faced little regulatory scrutiny despite persistent complaints about their political leanings.