Shareholder Meetings and Freedom Rides: The Story of Peck v Greyhound

36 Pages Posted: 28 Jun 2021 Last revised: 17 Sep 2021

See all articles by Harwell Wells

Harwell Wells

Temple University - James E. Beasley School of Law

Date Written: June 21, 2021

Abstract

In 1947 the civil rights pioneers James Peck and Bayard Rustin, members of the radical religious group the Fellowship of Reconciliation and its offshoot the Congress of Racial Equality (CORE), prepared to embark on the Journey of Reconciliation an interracial protest against segregated busing in the American South. But first they did something else radical: they bought shares in a corporation. A year later, after their travels in the South had led to terror, death threats, beatings, and in Rustin’s case a term on a chain gang, they brought their civil rights activism to a new site of protest, the shareholder meeting of that corporation, Greyhound. Invoking the shareholder proposal rule adopted a few years before by the Securities and Exchange Commission (SEC), Peck and Rustin insisted that as shareholders they had a right to voice their opinions about Greyhound’s segregation policies and to poll other shareholders on the issue. When Greyhound refused to send their proposal to other shareholders in its proxy statement, they brought the case that became known as Peck v Greyhound. In 1952, to end the case and future litigation, the SEC changed its rules and held that shareholders could not use the shareholder proposal mechanism “primarily for the purpose of promoting . . . racial, religious, or social or similar causes.” In this landmark case we see the collision of race and the corporate and securities laws, as radicals attempted to use those laws to pursue social justice while those charged with administering them insisted that race had no role to play in the corporation—in the process paradoxically writing race into the nation’s securities laws.

Keywords: corporate, securities, financial law, interdisciplinary, shareholders, legal history

JEL Classification: G30, G3, K22, K10, G34, O16, B30, G01

Suggested Citation

Wells, Harwell, Shareholder Meetings and Freedom Rides: The Story of Peck v Greyhound (June 21, 2021). Temple University Legal Studies Research Paper No. 2021-29, Available at SSRN: https://ssrn.com/abstract=3873430 or http://dx.doi.org/10.2139/ssrn.3873430

Harwell Wells (Contact Author)

Temple University - James E. Beasley School of Law ( email )

1719 N. Broad Street
Philadelphia, PA 19122
United States
215-204-1183 (Phone)
215-204-1185 (Fax)

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