Banks protest to SEC over terrorism list
Campaign News | Tuesday, 10 July 2007
By Jeremy Grant in Washington
A group of big international banks has called on the US Securities and Exchange Commission to remove from its website a link displaying the names of companies and financial institutions doing business in countries designated “state sponsors of terrorism”.
The development is a sign of continuing unease at the creation of the link, unveiled by the SEC last month.
The link takes investors to a subpage of the SEC’s site showing a list of five countries deemed by the US state department to be state sponsors of terrorism - Cuba, North Korea, Iran, Sudan and Syria - with a list under each of the companies doing business there.
Some of the companies and banks listed say it unfairly associates them with regimes regarded by the US as terrorist-sponsoring, without taking into consideration whether their business dealings in those countries are “material”.
Companies have also complained at their inclusion at a time when they may have withdrawn from the targeted countries since the publication of their most recent annual reports - which the SEC uses as the source information in its link.
In letters to the SEC chairman Christopher Cox and the treasury secretary Hank Paulson, the Institute of International Bankers said it was “disappointing that this action has been taken without prior public notice or consultation with reporting companies and other interested persons”.
“This is especially so, given the highly sensitive nature of the subject matter and considering the significant potential for investor confusion and misunderstanding that can result,” wrote Lawrence Uhlick, IIB chief executive.
“It is also a matter of concern that information provided by a company in good faith pursuant to its understanding of its disclosure obligations under the federal securities laws would then be presented to investors in a manner that can be significantly misleading and unfairly prejudicial.”
The IIB represents banks from more than 30 countries that have headquarters outside the US and operations inside the US, including Deutsche Bank, Credit Suisse and Bank of Tokyo-Mitsubishi.
The SEC has cast the creation of the link as part of its investor protection mission. It says it is relying on the latest information provided by companies to investors in annual reports.
Asked whether the SEC planned to remove the lists , John Nester, its spokesman, said: “I can’t comment on the letter or the request.”
Copyright The Financial Times Limited 2007
http://www.ft.com/cms/s/96a46a48-2e42-11dc-821c-0000779fd2ac.html
