SEC Official Backs Disclosure Rule Proposed by Columbia Law Professors

Commissioner Luis Aguilar Says SEC Should Require Public Companies to Disclose Spending on Politics to Shareholders

New York, Feb. 28, 2012—In a speech on Feb. 24, Luis Aguilar, one of five commissioners at the U.S. Securities and Exchange Commission (SEC), expressed his support for a disclosure rule proposed by Columbia Law School professors in a petition filed last summer.

The petition, organized by Associate Professor of Law Robert J. Jackson, Jr., and signed by ten leading corporate law professors from Columbia and elsewhere, urged the SEC to adopt a rule requiring publicly traded companies to disclose to shareholders the use of corporate resources for political activities
“Our petition, which was joined by a group of academics with a wide range of views on corporate law, shows that shareholders have long demanded information about corporate spending on politics,” Jackson said. “Investors need that information so that markets and the procedures of corporate democracy can help ensure that corporate political spending is in shareholders’ interest. As Commissioner Aguilar’s statement makes clear, the SEC should develop rules now to give investors the information they need to understand how shareholder money is spent on politics.”
The professors’ petition has drawn more than 42,000 public comments supporting the rulemaking initiative. The SEC has also received comment letters supporting the petition from a group of institutional investors who manage more than $600 billion in shareholder money, 15 U.S. Senators, and 43 Members of the House of Representatives.
Aguilar, a Democrat, said that the SEC should require corporations to disclose their political spending so that shareholders can see how their money is being used.
Without mandatory, uniform disclosures, “it is impossible to have any corporate accountability or oversight,” Aguilar said.
Following Aguilar’s remarks, SEC Chairman Mary Schapiro told reporters that the agency’s Staff would address the petition “at some point,” but did not elaborate on the timeframe for adopting new rules.
In addition to Jackson, the petition’s signatories included Adolf A. Berle Professor of Law John C. Coffee, Jr., Marc and Eva Stern Professor of Law and Business Ronald J. Gilson, and Richard Paul Richman Professor of Law Jeffrey Gordon.