Greg Walden: Global Warming and the SEC fiasco?

Walden, Barton ask SEC Chair Schapiro to explain how global warming action plan improves safety, security for investors
SEC: Never mind Madoff;What are we doing about global warming?
From Greg Walden,

WASHINGTON, D.C. – U.S. Reps. Greg Walden, (R-OR)., ranking member of the Oversight and Investigations Subcommittee, and Joe Barton, (R-TX), ranking member of the House Energy and Commerce Committee, today wrote to Securities and Exchange Commission Chairman Mary Schapiro regarding plans under consideration by the commission to call for corporations to be required to explain how they are alleviating global warming.

“We note with interest that the Securities and Exchange Commission evidently has concluded that, having permitted the now-imprisoned Bernard Madoff to bilk as much as $50 billion from trusting investors, it will now turn its investigative eye toward global warming instead of investor protection,” Walden and Barton wrote. “Had the colossal failure of the commission to notice the Madoff Ponzi scheme after six separate and substantive tip-offs not occurred, and even if you had not overlooked a top SEC official’s romantic involvement with Mr. Madoff’s niece during that disgraceful episode, we would be troubled by an undertaking which seems so transparently political and such a breathtaking waste of the Commission’s resources.”

Walden and Barton wrote that the commission is reviewing a recommendation to use an “interpretative release” as its enforcement mechanism. An interpretive release doesn’t have the full force of law but it considered by corporations as absolutely binding. It also has the advantage of effectively functioning as a rule without the formal rulemaking process, thereby skirting the collecting, reading and considering of public comments.

Walden and Barton asked Schapiro to respond to the following questions:

•        As recently reported in The Washington Post, the agency has overlooked problems that are well within its jurisdiction on repeated occasions during recent years. Are you priorities now to shift from verifiable effectiveness in exercising jurisdiction over investment matters to overseeing corporate participation in global warming abatement?

•        What is your statutory authority for assembling an interpretative release on global warming?

•        Given that there is no current federal law on the subject of global warming and no evident impact on corporate profits and losses, how does a corporation’s action on global warming relate to the safety and security of its investors? How could corporate action under these facts be material to a corporation’s financial condition and require disclosure under the securities laws?

•        On October 2, Commissioner Walter stated that the SEC is “not an agency populated with climate experts.” How many environmental scientists are currently employed at the SEC?

•        We understand that you have received petitions from organizations with extensive social agendas to abrogate your primary mission of protecting investors from corporate fraud. What is your statutory obligation to shift priorities to accommodate social action agendas?

•        Do you anticipate that registrants will be subjected to civil lawsuits for non-compliance with a global warming interpretative release?

•        Do you anticipate that registrants will be subjected to criminal penalties for non-compliance with a global warming interpretative release?

A copy of the letter can be found here.

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