Proxy fight at HomeStreet rejected on technicality

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An activist’s challenge against HomeStreet in Seattle has been nullified — again.

The $7 billion-asset HomeStreet disclosed Monday that Roaring Blue Lion Capital failed to get the required approval from the bank's state regulator before launching a proxy battle. The investment fund, which owns about 6% of HomeStreet’s shares, had been urging other shareholders to withhold support for directors Scott Boggs and Douglas Smith.

Roaring Blue Lion has long complained about HomeStreet’s focus on mortgage lending and bank acquisitions.

The investor did not seek approval from the Washington Department of Financial Institutions Division of Banks. As a result, votes supporting the firm’s effort could be voided under Washington’s bank regulatory laws.

Roaring Blue Lion initially tried to have its own nominees vie for board seats, but the initiative was invalidated because the investor failed to comply with HomeStreet’s advance-notice bylaw. HomeStreet’s decision was upheld by the Superior Court of King County.

Glass Lewis, a leading proxy advisory firm, recently urged shareholders to support HomeStreet’s nominees, including Boggs and Smith. Institutional Shareholder Services, another big proxy adviser, recently recommended that shareholders vote against Boggs.

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