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Editorial: When Graded On Its Own Rules, SEC Fails Miserably

Scott S. Cohen | July 27, 2004

SEC chairmen, including current chair William Donaldson, have had a propensity to quote Justice Louis Brandeis in speeches. So allow me to throw one back at the Commission: “Our government is the potent, the omnipresent teacher. For good or ill, it teaches the whole people by its example.”

Contrary to Brandeis’ counsel, however, if the SEC was graded on compliance with its own regulations, it would fail. And miserably.

Its disclosure practices are at best irresponsible, and, at worst, negligent. I claim “negligent” because, in its own words, the Commission is “concerned primarily with promoting disclosure of important information.” But time and again, it fails at communicating those disclosure requirements on a timely basis to those who must abide by its will.


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