Dirt Diggers Digest No. 27

January 21, 2003

Editor: Philip Mattera

1. SEC disclosure roundup

2. Shareholder coalition presses utilities on global warming liability disclosure

3. Commercial database access via public libraries

4. Database adds info on Chinese companies


1. SEC disclosure roundup

The SEC is expected to vote this week on whether to proceed with the

adoption of a new rule requiring mutual funds to disclose how they vote

their proxies on shareholder resolutions at the corporations in which they

have holdings. When the plan was announced in September, its adoption was

considered all but certain, but the investment management industry began

campaigning aggressively against the reform. On January 14, the CEOs of

two of the largest mutual fund companies, Vanguard Group and Fidelity

Investments, jointly published an opinion article in the Wall Street Journal

warning that disclosure would “politicize proxy voting” and “open

mutual-fund voting decisions to thinly veiled intimidation from activist

groups whose agendas may have nothing to do with maximizing our clients’

returns.” They went on to say: “The effect would be to make mutual funds the

prime pressure point for every activist group with a political or social ax

to grind with corporate America.”

Also expected soon is a decision by the Commission on a less controversial

issue: whether to formally adopt a proposed rule that would require mutual

funds to disclose the content of their portfolios quarterly rather than

semi-annually. This action will follow the completion of a 30-day public

comment period on the rule, which would require that funds report the data

in filings that would be available on the SEC’s EDGAR online system.  The

reports would also include additional information on the fees collected by

the funds. For more details on the rules, see the SEC’s press release at


The SEC also voted last month to issue proposed new rules governing the

reporting of stock trades by corporate insiders. The rules, mandated by the

Sarbanes-Oxley bill passed by Congress last summer, would finally add

Forms 3 and 4 to the list of filings including in the EDGAR electronic

database. A 45-day comment period was opened by the Commission. See

the release at http://www.sec.gov/news/press/2002-178.htm.

Earlier this month, the SEC adopted other rules manadated by Sarbanes-Oxley,

including a requirement that companies that issue financial results using

methods not included in generally accepted accounting principles, or GAAP,

explain in detail how such pro forma numbers differ from GAAP results.

Another provision will require companies to disclose the content of any code

of ethics established for executives. Details can be found in the release at



2. Shareholder coalition presses utilities on global warming liability disclosure

Last week a coalition of institutional investors, including the State of

Connecticut Retirement Plans and members of the Interfaith Center on

Corporate Responsibility, announced an initiative to pressure five large

utilities to disclose to their investors the potential legal liabilities

associated with their high levels of greenhouse gas emissions. The groups

have introduced a resolution at each of the five companies--American Electric

Power, Cinergy Corp., Southern Company, TXU Corp. and Xcel Energy Inc.--that

would require the utilities to disclose both the economic risks associated

with the emissions and the economic benefits of committing to a substantial

reductions of those emissions. The text of the resolution, which will be

voted on at the companies’ forthcoming annual meetings, can be found at


In a statement supporting the initiative, Connecticut State Treasuer Denise

L. Nappier said: “The lesson we must learn from Enron and the scandals that

followed is that management must provide shareholders with clear and

accurate information about the current and future health of the company--and

this goes beyond accounting…The electric utility industry is a great example

of an industry that has material financial risk not currently sufficiently

disclosed in a big picture way to its investors.” Her full statement, along

with other documents, can be found at at the website cited above.


3. Commercial database access via public libraries

A recent article by Gary Price on the website Search Engine Watch highlights

a little known research fact: the websites of many public libraries provide

free access to a wealth of commercial databases. These services can be

accessed either in the library or via a remote computer by anyone holding a

valid library card. In the article (available at

http://searchenginewatch.com/searchday/03/sd0115-databases.html) Price notes

that these services often include archives of full-text news articles,

though the service is more likely to be InfoTrac or ProQuest rather than

Nexis or Dow Jones Interactive (which, by the way, will soon disappear in

favor of Factiva, a Dow Jones joint venture with Reuters).

Dirt Diggers will be especially interested in a resource called Business &

Company Resource Center, which is available, for example, at the websites of

the public libaries of New York, Los Angeles and Washington, DC. Produced by

the Gale Group (a subsidiary of The Thomson Corporation), the Resource

Center assembles corporate profile information from a variety of sources,

including other Thomson properties such as the Investext archive of stock

analyst reports.

Price doesn’t mention it in his article, but it should be noted that many

university libraries offer faculty and students access to an even more extensive

array of commercial database services.


4. Database adds info on Chinese companies

Bureau van Dijk, a European-based producer of  business information

databases, has announced that its OSIRIS service now includes financial data

on all companies listed on stock exchanges in China. A spokesman for the

company claimed that OSIRIS <http://osiris.bvdep.com> is the first database

to contain such information on all Chinese publicly traded companies.


-- Philip Mattera <pmattera@goodjobsfirst.org>