UPDATE 1-Lifting the Lid-Calls renewed to bar broker votes

(Adds SEC comment, paragraph 8)

By Martha Graybow

NEW YORK, April 17 (Reuters) - U.S. investor rights advocates are stepping up calls for reforms of corporate director elections, saying regulators should bar "legalized ballot-box stuffing" by stock brokers who vote without instructions from their clients.

The right of brokers to cast such proxy votes -- even against their clients' interests -- has long troubled activist investors, who say that brokers typically vote in lock-step with company management's wishes and can tip the scales in contested director elections.

Director elections have become a flashpoint this year at companies hard hit by the mortgage market turmoil, including U.S. savings and loan Washington Mutual Inc (WM.N: Quote, Profile, Research).

Activist investors contend that if the broker votes were excluded, two WaMu directors failed to win a majority at the company's annual meeting this week, based on preliminary election returns.

"It's legalized ballot-box stuffing," said Michael Garland, of the Change To Win Investment Group, an adviser to labor union pension funds. "It's as if the incumbent party in the White House automatically gets New York and Florida in the Electoral College."

Investor rights groups are renewing calls for the U.S. Securities and Exchange Commission to enact an 18-month-old proposal by the NYSE Euronext's (NYX.N: Quote, Profile, Research) New York Stock Exchange to eliminate uninstructed broker votes in all director elections.

Change to Win said on Thursday it had written to SEC Chairman Christopher Cox urging prompt approval of the proposal.