Coca-Cola Co. and Eastman Kodak Co. are among more than 50 U.S. companies objecting to a Securities and Exchange Commission plan to speed companies' financial disclosures as a response to Enron Corp.'s bankruptcy.
The SEC rule proposal, which is being pushed by Chairman Harvey L. Pitt, would give investors faster access to quarterly and annual earnings reports of company finances. The plan supplements a separate SEC proposal, issued Wednesday for public comment, that would give companies two days to report developments on contracts, executive changes and stock market delistings.
At least 50 companies in the Fortune 500 and the four biggest U.S. accounting firms have urged the SEC to drop or scale back the quarterly report proposal. The corporations say the pressures from tighter deadlines would lead to erroneous and incomplete reports at a time when the SEC is pushing for fuller, more accurate disclosure.
"The corporations have very valid concerns, and I think the SEC will give great weight to their comments," said David B. Martin, a Washington lawyer who headed the SEC's corporation-finance unit from January 2000 to January 2002. "But while the SEC may compromise on the deadlines or the timing, I'd be surprised if they drop the proposal."
The proposal, issued for public comment in April, would require quarterly reports to be filed within 30 days of the end of the quarter, rather than 45 days. Annual reports would have to be made within 60 days of the end of the fiscal year, not the current 90.
Facing pressure from Congress and investors, Pitt has advocated fuller and faster disclosures to protect stockholders from the kind of accounting failures that led Enron to file for bankruptcy protection Dec. 2. The SEC also has opened dozens of accounting investigations in recent months, including probes of Global Crossing Ltd., WorldCom Inc. and Dynegy Inc.
The Council of Institutional Investors, which represents pension funds overseeing $1 trillion in assets, supports the SEC's plan.
"It is vitally important for council members to have timely access to clear and transparent financial information about portfolio companies," the group said.
The SEC on Wednesday proposed making firms disclose sooner when they've taken on new financial obligations or made executive changes.
The plan, which was issued for public comment for 60 days, would shorten to two days the deadline for filing disclosure forms on these and other events. The deadline now is five to 15 days.
More Newsletter Editors Are Becoming Bearish
Pessimism about U.S. stocks among investment newsletter editors rose last week to its highest since Sept. 28, according to a poll by Investors Intelligence newsletter.
The portion of editors considering themselves bearish, or pessimistic, climbed to 34.7% from 31.3% the week before. Bearishness reached a three-year high of 42.7% on Sept. 28, the second week of trading after the Sept. 11 terrorist attacks.
The portion of editors considering themselves bullish, or optimistic, declined to 42.9%, the lowest since Nov. 2. Bullishness was 48.9% a week earlier and hit a four-year low of 33.7% after the attacks.
Technical analysts, who try to predict stock moves based on price patterns and other statistical measures, see a peak in pessimism and a low in optimism as a "contrarian" sign that stocks may be poised to gain.
When the majority of investors are bearish, they already may have pulled most of their funds from the market.
Bethlehem Steel Gets New Ticker Symbol
Bethlehem Steel Corp., the third-biggest U.S. steelmaker, started to trade over the counter Wednesday with a new ticker symbol after its shares were delisted from the New York Stock Exchange.
The new ticker symbol is BHMS, changed from BS on the NYSE. The Bethlehem, Pa.-based company's shares were removed from the exchange because they had traded for less than $1 for 30 consecutive days.
Bethlehem Steel filed for bankruptcy protection in October. Last year, it had a net loss of $1.95 billion on $3.33 billion in sales because of low steel demand and competition from imports.
The firm's shares Wednesday rose 5 cents to close at 30 cents.