SEC looking at possible revisions to anti-fraud law, chairman says

The Securities and Exchange Commission chairman says a landmark anti-fraud law has proved too burdensome and costly for some public companies, especially smaller ones, and his agency is considering revisions of the statute.

Recent proposals and actions by the agency are raising concerns among investor advocates that it is retreating from the aggressive regulatory role it pursued after the stunning scandals at Enron, WorldCom and other major companies.

Recent accounting scandals have tainted several major European companies, including Royal Dutch/Shell Group, Italian dairy giant Parmalat and French media conglomerate Vivendi Universal. This week, Irish drug maker Elan Corp. agreed to pay $15 million to settle SEC charges that it misled investors about revenue from a joint venture.

- In mid-December, the SEC set up an advisory committee to help understand how smaller U.S. public companies are being affected by the anti-fraud law and securities laws. The action followed complaints by those businesses; in addition, business groups are pressing for a softening of the anti-fraud law.

The idea of separate, less stringent rules for small companies "is of real concern," said Barbara Roper, director of investor protection for Consumer Federation of America. "It hardly seems likely to be good for investors."

"The initiative for further reforms clearly is not there," said Joel Seligman, dean of Washington University School of Law in St. Louis and an expert on SEC matters.

But, he added, this "does not mean that the SEC has rolled over and played dead."

•	SEC looking at possible revisions to anti-fraud law, chairman says Associated Press, Thursday, Feb. 10, 2005 Byline: Marcy Gordon, AP business writer

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