Corporate lawyers are seeking broad exemptions to several post-Enron Corp. market reforms proposed by regulators, ahead of key votes by the Securities and Exchange Commission set for Wednesday.
Attorneys for major companies want certain types of shares exempted from a rule meant to bar insider stock sales during so-called pension fund blackout periods, when employees cannot sell their shares.
Also, the attorneys want news releases exempted from rules designed to fight misleading corporate profit reports.
The SEC is scheduled to vote on these and numerous other rules that Congress ordered the commission to write under the sweeping Sarbanes-Oxley Act passed last summer amid financial scandals at former energy trader Enron, telecom giant WorldCom Inc. and other firms.
Corporate lawyers are seeking to tweak the rules to make them less burdensome for the companies, executives, accountants and others they would affect.
Warning of an attempted rollback of Sarbanes-Oxley, Consumers Union spokesman David Butler said, "After months of near silence, special interests are now gearing up to weaken the corporate accountability law."
Butler's group publishes Consumer Reports magazine.
Under orders from Congress, the SEC on Oct. 30 proposed barring executives from selling company stock when employees are unable to do so because of pension plan blackout periods.
The rule stemmed from allegations that top executives at some scandal-ridden firms unloaded thousands of their shares during blackout periods when employees could not sell.
Arguing that Congress did not intend to bar all insider stock sales during blackouts, an American Bar Assn. committee has asked the SEC to exempt insider transactions involving gift stock; stock held in so-called 10b5-1 plans used by well-to-do executives; stock involved in mergers, deaths and divorces; and stock obtained through some option and rights plans.
In another measure, the SEC has proposed rules to crack down on pro forma profit reports.
The rules were meant to stem reporting of profits that depart from nationally recognized Generally Accepted Accounting Principles, or GAAP.
Under the rule, companies could not report pro forma results to the SEC or in other announcements, such as news releases, without saying how they differ from GAAP results.
Lawyers for major corporations have proposed numerous adjustments to the proposed rules, including exempting news releases from them in some circumstances.
"We have serious doubts about whether the commission has the authority to regulate the content of press releases, which we believe is not good policy in any event," said Gerald Blackman, chairman of the securities regulation committee of the New York State Bar Assn., in a letter to the SEC.
The commission also is expected to vote on proposed rules forcing companies to disclose more about internal controls and codes of ethics, and whether their boards' audit committee includes any financial experts among the directors.
Finally, a rule requiring brokerage stock analysts to certify their research reports is expected to come up for a vote.