Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Saturday, July 21, 2007

SEC Takes Down Website Link on Business with Terrorist States

Just a month ago, the SEC posted on its website a list of companies that do business with countries that are considered state sponsors of terror, with links to the descriptions in the corporate documents.  The S.E.C. list named 29 companies whose 2006 annual reports had mentioned doing business in Cuba, 57 in Iran, 8 in North Korea, 35 in Sudan and 24 in Syria.   “No investor should ever have to wonder whether his or her investments or retirement savings are indirectly subsidizing a terrorist haven or genocidal state,” the S.E.C. chairman, Christopher Cox, said at the time. 

Last night, however, the SEC took down the tool, after a storm of criticism about its accuracy.  Companies complained  that they were listed even if they disclosed minimal contacts that had been discontinued.  Both the Chair and ranking Republican member of the House Financial Services Committee wrote to the SEC and criticized the list as unfair and ill-conceived. While the SEC said it was temporarily suspending the site, it added that it might conclude that it was not necessary after all.  NYTimes, S.E.C. Rethinks Lists Linking Companies and Terrorist States; WSJ, SEC Halts Watch List Tool.

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