SEC Reconsidering Terrorist Tracking Tools

The SEC has now asked for public comment about “…whether to develop mechanisms to facilitate greater access to companies’ disclosures concerning their business activities in or with countries designated as State Sponsors of Terrorism by the U.S. Secretary of State.” The five nations currently designated by the U.S. Secretary of State as state sponsors of terrorism are Cuba, Iran, North Korea, Sudan and Syria.

The Commission’s request for comment comes in the form of a concept release that asks whether improvements in public access to company disclosures can be made.

Earlier this year, the SEC temporarily provided access to a Web tool that linked to portions of companies’ most recent annual reports that described their business activities in any of the five countries (see SEC Makes Terrorism-Link Info Available to Investors). However, the SEC said that since the linked reports were not always the company’s most recent disclosure, and because of other concerns with the Web tool, it was “…discontinued pending consideration of the issues set forth in the concept release.’

At the time Congressman Barney Frank (D-Massachusetts), the head of the U.S. House Financial Services Committee said that the SEC should consider a more accurate method for compiling the list, noting that some of the companies on the list have dumped their ties with the terrorist states since the list was created (see Legislator Condemns SEC’s Method for Pinpointing Terrorist State-linked Companies).

“Investors have told us they want to avoid supporting terrorism directly or indirectly through their investments,’ said SEC Chairman Christopher Cox. “Some of the information they need for this purpose is already on file with the SEC. We’re interested in ways to help investors find what they’re looking for.’