Tougher Buyout Regulations Urged

Securities and Exchange Commission Chairman David Ruder told Congress today that tougher regulation of leveraged buyouts is needed so that the investing public is not harmed by the deals.

The SEC chairman’s comments to a subcommittee of the House Energy and Commerce Committee follow intense criticism of leveraged buyouts, particularly after the record $25-billion RJR Nabisco Inc. deal that lost bond investors millions of dollars.

Ruder said his staff was studying possible new rules to ensure fairness to shareholders and adequate disclosure to bondholders in leveraged buyouts. He said specific proposals are likely in March.