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How Congress Is Misusing the Reporting System

Scott Taub | September 25, 2012

The closest thing The Securities and Exchange Commission has to an official motto is former Chairman William Douglas's decree: “We are the investor's advocate.”

Anyone with financial knowledge can quickly identify the target audience of SEC filings to be investors, and would describe the goal of those filings as providing information to investors to help them make better decisions. Of course, the reporting requirements are intended to balance the cost of assembling that information with its benefit to investors.

These ideas are generally well-known and widely accepted, but not by the United States Congress. I have criticized Congress before, in particular over the rollback of internal control reporting requirements that was shoehorned into the Dodd-Frank Act, apparently based on cost-benefit concerns. But some other recent Congressional actions...

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