July 22, 2004

CT Requests for Responses to

As happened last year when LivEdgar added responses to SEC comment letters to its database, there is an upsurge in interest about how to request confidential treatment for a company’s responses. Learn more in this interview with Burt Arrington on Confidential Treatment Requests for Responses to SEC Comment Letters or in the hordes of law firm memos on this topic in our “Confidential Treatment Requests” Practice Area.

Alan Beller, Director of Corp Fin, recently noted that the volume of blanket Rule 83 requests did not significantly rise after the LivEdgar development – and that he hoped it would not rise when comment letters begin to be publicly available. If it does, he noted that the SEC would conduct rulemaking to more closely align the availability of Rule 83 relief with its intended purpose. This is the same warning that he gave last year, which seemed to have worked given that Rule 83 wasn’t widely abused.

Greenspan on Hedge Fund Proposal

Federal Reserve Chairman Alan Greenspan gave his semiannual testimony on monetary policy to Senate Banking Committee on Tuesday. During his testimony, he stated his opposition to the SEC’s recent proposal to register hedge fund advisers with the agency.

Greenspan said that the proposal will not accomplish its goal of detecting fraud merely through registration with the SEC and periodic examination of the adviser by the SEC. “Fraud is almost always uncovered through complaints of counterparties or by accident,” he said. Further, Greenspan fears that the proposal will create restrictions that will cause many hedge funds to leave the industry, “to the significant detriment of our economy.”

More on Options Expensing

Also on Tuesday, the House of Representatives passed the Stock Option Accounting Reform Act (H.R. 3574) by a vote of 312-111. As we have previously blogged, the bill would mandate that stock options be counted as an expense on company balance sheets when they are issued to the CEO and the other four highest paid company officers, but not counted as an expense when they are issued to other employees. The bill also says that when a company is calculating the expense of the options issued to the top five, it shall assume that stock prices do not fluctuate. Small business issuers would be exempt.

Next up for the bill is consideration by the Senate.