SEC Proposes Further Reform Under New Law

Moving quickly to implement corporate reforms ordered by Congress, securities regulators Wednesday proposed forcing companies to disclose more about their internal controls and codes of ethics.

By unanimous votes, the Securities and Exchange Commission sent the two proposed rules out for public comment, along with a third that would require companies to disclose whether their boards’ audit committee has any “financial experts” on it.

A fourth proposed measure also approved 5-0 would make it a crime to strong-arm or mislead corporate auditors into cooking the financial books.

SEC Chairman Harvey Pitt said his agency is very close to naming the five members of a new national board for policing corporate accountants.

“We will meet the Oct. 28 deadline,” Pitt said, referring to the date by which the board must be named under orders from Congress contained in the landmark Sarbanes-Oxley Act.

The SEC has a huge task in implementing Sarbanes-Oxley, passed in July as the biggest U.S. securities law overhaul since the 1930s.

The four measures sent out for comment were expected to be finalized by early next year.