FOR IMMEDIATE RELEASE
Wednesday, August 26, 2020
Contact: Pamela Russell at 202-618-6433 or prussell@bettermarkets.com
Washington, D.C. – Lev Bagramian, Senior Securities Policy Advisor at Better Markets, issued the following statement in response to the Securities and Exchange Commission’s approval of two rules friendly to corporations and Wall Street—Regulation S-K modernization and “accredited investor” definition:
“”The SEC’s approval of the changes to Regulation S-K would give companies undue flexibility on disclosure. This would negatively impact the availability, quality, completeness and timeliness of material information that investors (and all those who serve investors, including analysts, journalists and academics, among others) need to make more informed investment decisions. The premise of ‘disclosure overload’ is a myth created by the U.S. Chamber of Commerce and Wall Street and propagated by their lobbyists and their champions in the financial regulatory agencies and Congress.
“No investors, or their advocates that we know of, have complained that there is indeed too much information provided by companies. If anything, investors of all types demand detailed, comparable, consistent and machine-readable data on environmental, social and governance (ESG) related costs and risks that current companies face. And, so, instead of heeding the calls of millions of investors—who invest trillions in the U.S. markets, fueling jobs, economic growth and capital formation—and requiring the disclosure of comparable, consistent and high-quality ESG data, the Trump administration’s SEC is giving more discretion to companies to NOT disclose information that is necessary for informed investment decisions.
“The SEC’s changes to the accredited investor definition is another example of the SEC being friendly to corporations and Wall Street. For decades, the accredited investor construct has allowed the SEC to effectively draw a line between investors who have the financial means and financial knowledge to fend for themselves and those who lack such sophistication or wherewithal. This clear demarcation has helped the Commission to better protect those who need such protection and has allowed market participants, including broker-dealers, underwriters and companies, to more effectively target their solicitations and offerings.
“The SEC should not tamper with this time-tested and time-proven construct without detailed analysis, testing and data. If anything, inflation has already caused hundreds of thousands of more investors to qualify as accredited investors since the definition was set in law in 1982, and, therefore, the Commission should adjust upwards the monetary thresholds that define an accredited investor and not artificially increase their numbers.”
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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.com.
