US SEC's Atkins frets over settlement disclosures

February 16, 2006
Reuters

A member of the U.S. Securities and Exchange Commission expressed concern on Thursday about what he called "premature" disclosures by companies of settlements with the SEC over enforcement investigations. SEC Commissioner Paul Atkins said there is no clear guidance on when companies should disclose investigations or settlements with the investor protection agency.

He said he intends to work with SEC staff to develop guidance for companies on the matter. The SEC's enforcement division investigates suspected fraud and other misconduct and then recommends to the five-member commission a course of action, but must get approval from the commissioners to bring charges or agree to a settlement.

"I find it hard to believe that the freedom of the staff to recommend settlement to the commission is by itself necessarily an event that must be reported to shareholders," Atkins said at a legal conference.