Corporate Governance

Both Ways Atkins

By J. Robert Brown

Last week, the WSJ included an op ed piece written by Commissioner Atkins at the SEC.  We will not bother to analyze his position that shareholders and investors benefit from the Supreme Court's decision in Stoneridge.  Suffice it to say that  the vast categories of investors had different views as the amicus briefs filed on behalf of petitioners in Stoneridge illustrate.  As for his purported effort to speak on behalf of the best interests of shareholders, he should go back and reexamine his decision to vote against access to the company's proxy statement for shareholder nominations to the board.  He is no friend to shareholders no matter how much he purports to say otherwise.

But what we really want to comment on is his attempt in the editorial to have it both ways.  On the one hand, he asserts that had Stoneridge come out differently, it would have harmed US competitiveness.  On the other hand, he claims that the SEC has sufficient authority to go after vendors that violate the antifraud provisions.  But if the SEC is rigorously enforcing the law against vendors, won't that harm US competitiveness?  Won't the same foreign vendors be hesitant to do business in the US because of concern over prosecution? 

Atkins is trying to have it both ways.  He knows that Stoneridge exonerated deceptive conduct that challenges the integrity of the corporate disclosure process.  He tries to overcome this result by pointing to the SEC.  But in the end, the SEC will cause the same concern that he uses to justify Stoneridge.  You can't have it both ways.  As an exam grade, this one gets an F. 

Full post as published by The Race to the Bottom on January 28, 2008 (boomark / email).