Activist Nuns Strategically Buy Smith & Wesson Shares to Force Gun Control Policies
A group of activist Catholic nuns who own a small amount of Smith & Wesson stock have filed a lawsuit in hopes of stopping the company’s manufacture of “AR-15-style rifles.”
The nuns demonstrated their ignorance of firearms in the very first paragraph of the statement they issued regarding the lawsuit, saying, “These rifles have no purpose other than mass murder.”
The statement did not explain how, if that were true, virtually none of the 20 million such rifles currently in civilian hands in the U.S. has ever been used in even a single murder.
The suit claims that company leadership has exposed shareholders to potential liability by “intentionally violating federal, state and local laws and failing to respond to lawsuits over mass shootings,” according to the New York Post.
The lawsuit was filed in a state court in Nevada, where Smith & Wesson is incorporated.
The suit, which highlights a number of shooting incidents in the U.S. in which the criminal used an AR-15 or similarly styled rifle, is a “derivative” lawsuit, which allows shareholders to sue company boards if they fail to fulfill their duties to shareholders.
According to the Post, the plaintiffs cannot profit from the lawsuit; any damages the court find the board responsible for would be paid to the company itself.
“[C]courts generally find boards are protected from lawsuits for good-faith decisions,” the Post reported.
“Much like the pharmaceutical companies being hammered by civil judgments and fines after enjoying years of profits from the sale of dangerous opioids, Smith & Wesson’s Board willfully ignores the potentially ruinous exposure the Company faces from its marketing and sale of weapons designed specifically for mass killing,” attorney Jeffrey Norton, who is representing the nuns, said in a news release.
“We are proud to partner with these congregations of Catholic Sisters who have long sought corporate responsibility through their shareholder activism.”
In its 2022 annual report, Smith & Wesson alerted shareholders to the risk of “significant damages” from liability suits.
Of this lawsuit, however, the company’s CEO and president, Mark Smith, did not appear to be overly concerned, telling The New York Times that the plaintiffs were “not interested in the best interests of the company or its stockholders.”
“This frivolous lawsuit is simply another instance in their long history of attempting to hijack and abuse the shareholder advocacy process to harm our reputation and company,” Smith said.
Norton told the Times that his clients owned “more than 1,000 shares” of the company, which, even if true, would represent about .002 of 1 percent of the company’s 46 million outstanding shares.
The full statement from the congregations of Catholic Sisters appears below.
As Catholic Sisters and women of faith who believe in the sanctity of life, our hearts ache at the exponential rise in gun deaths and mass shootings in our country that have ravaged the lives of so many children, women, men, their families, and communities. AR-15-style rifles, like those manufactured by Smith & Wesson, have been the weapon of choice for killers responsible for the deadliest mass shootings in American history. By design, they inflict the greatest number of casualties with maximum bodily harm in the shortest amount of time and are easily modified for automatic fire. These rifles have no purpose other than mass murder. They are not the sporting rifles that members of our own families and other responsible gun owners value.
As Smith & Wesson stockholders – and long-time proponents of corporate responsibility in the environmental, social and governance policies of companies in which we invest – we have sponsored resolutions that provide shareholders with an understanding of the company’s practices and exposure to risk and liability regarding the manufacture of AR-15 rifles. The most recent is a resolution calling for a third-party Human Rights Impact Assessment of the company’s practices in light of the significant and costly human rights risks the company faces. While the board recommended voting against the proposal at the September 2023 shareholder meeting, 26.7% of shareholders supported it.
Today, with the help of a team of lawyers from the New York law firm Newman Ferrara LLP, we filed a derivative complaint against the members of the Board and executive officers for breach of their fiduciary duties in prioritizing short-term profit over long-term risk. The company is intent on marketing and selling AR-15 rifles in whatever manner results in the most sales – even if the marketing is illegal and attracts a dangerous category of buyers, facilitates an unrelenting and growing stream of killings, and causes the company to face an ever-increasing and substantial likelihood of liability that threatens its long-term existence.
We call on Smith & Wesson to return to the practices of its first 153 years of existence when it held itself as a successful beacon of responsible gun ownership and did not manufacture, market, or sell military-grade, mass-killing assault weapons. We pray for an end to the AR-15 mass shootings that have stolen the lives of so many innocent people and devastated communities across the nation.
“The congregations of Catholic Sisters who, as stockholders, joined in filing the derivative complaint against Smith & Wesson officers and directors are: Adrian Dominican Sisters (Adrian, Michigan), Sisters of Bon Secours USA (Marriottsville, Maryland), Sisters of St. Francis of Philadelphia (Aston, Pennsylvania), and Sisters of the Holy Names of Jesus & Mary, U.S.-Ontario Province (Marylhurst, Oregon),” according to the attorney’s news release.
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