Investor Alert: Salesforce Counsel Blocks Board Review of Proof Mark, Inc. “Red Flag” Notices

• Will Salesforce Retaliate against PMI Despite Federal Whistleblower Protections?

SAN FRANCISCO, June 10, 2025 (GLOBE NEWSWIRE) -- In a move that may constitute a serious breach of Delaware law, Salesforce’s (NYSE: CRM) legal team has effectively blocked board-level review of 10 formal “Red Flag” notices filed by Proof Mark, Inc. (PMI), a partner and minority shareholder.

The easy question to ask is, “why would they do that?”

The notices, submitted between March and June 2025, identify material risks involving governance breakdowns, data trust erosion, and acts of partner reprisal.

Salesforce’s outside counsel refused to escalate the notices to the board in a letter dated May 2, 2025.

However, Delaware law is unambiguous: officers and counsel do not have discretion to suppress Red Flag notices sent to the board of directors. Stuart Wilson, PMI counsel, said, “Any shareholder would be interested in the fact sets and the questions posed in PMI’s Red Flags.”

Delaware Law: Suppressing Risk Notices Is a Fiduciary Breach

In Hughes v. Hu, the Delaware Chancery Court affirmed a critical board-level obligation:

“A board cannot blindly defer to the conclusions of management or counsel when credible warnings are raised… Directors have an obligation to probe, question, and act—even if management attempts to dismiss the concerns.”

“Failure to investigate red flags, even when labeled legally immaterial by insiders, constitutes bad faith.”

(Hughes v. Hu, C.A. No. 2019-0112-JTL, 2020 WL 1987029)

These omissions—failure to escalate, investigate, or act—expose directors and officers to personal liability under Caremark and McDonald’s. (re McDonald’s Corp. Stockholder Derivative Litigation, C.A. No. 2021-0324-JTL)

Suppression of Red Flags Hurts All Salesforce Shareholders

The Red Flag notices have been posted at https://www.substack.com/@proofmarkinc and submitted to SEC and DOJ. The filings detail:

• Platform coercion and retaliation
• Breakdown of internal controls
• Governance suppression and data trust failures

Potential federal violations include:

• Regulation S-K, Item 105 – failure to disclose material risks
• Exchange Act Rule 14a-9 – misleading omissions

Informatica Merger Implications

Salesforce is pursuing regulatory approval for its acquisition of Informatica, a respected enterprise data infrastructure provider. But its suppression of internal risk disclosures raises urgent concerns:

• Can a company that filters what its board can see govern a major acquisition without conflicts of interest?
• Are Salesforce’s internal escalation and compliance processes truly operational—or selectively enforced?
• If partner coercion and Red Flag suppression occurred inside the Salesforce ecosystem, what prevents similar failures from extending into Informatica’s?

Blanket Legal Representation Asserted Without Consent

In a letter dated May 28, 2025, Salesforce’s outside counsel claimed to represent the company, its board, officers, and “any employees listed” in PMI’s Red Flag disclosures. No conflict waivers or individual consents were provided.

This raises serious ethical concerns under:

• New York Rules of Professional Conduct 1.4, 1.7, 1.13
• NYC Bar Opinion 2004-02
• ABA Formal Opinion 91-361
• Delaware precedent in Oracle and Disney

Under these authorities, joint representation is impermissible without specific, informed consent—particularly when fiduciary duties may diverge or conflicts arise.

Regulatory and Investor Engagement Underway

PMI’s board has received whistleblower protections from the U.S. Securities and Exchange Commission and other federal agencies. All documents, correspondence, and legal filings are being shared with:

• Institutional investors
• Proxy advisory firms
• Governance analysts
• Federal and state regulators

Far more importantly, institutional investors, regulators, and antitrust authorities now face a direct question:

Can fiduciary oversight exist if management shields the board from shareholder-submitted risk disclosures?

Full materials are available at: https://www.substack.com/@proofmarkinc

Media: investor.relations@proof.world