The Investor Environmental Health Network (IEHN) has requested that the Securities & Exchange Commission (SEC) include in its 2010 2015 strategic plan the development of guidance for public companies requiring narrative disclosures in their annual financial reports about emerging risks such as nanotechnology. Attached to the IEHN November 15, 2009, letter is a report titled Bridging the Credibility Gap: Eight Corporate Liability Accounting Loopholes that Regulators Must Close that focuses on asbestos and nanomaterials “to assess the effectiveness of the existing financial disclosure regulations, and to develop recommendations for improvements.”

According to IEHN, the report “found some companies heavily investing in nanomaterials today that appear to be engaging in inadequate or misleading disclosures related to potential hazards and the resultant financial implications. In particular, some of the materials being developed by nanomaterials companies have already been found to bear significant hazard similarities to asbestos, but this information is not contained in any registrants’ disclosure statements.”

IEHN contends that the SEC’s planned deference to principals proposed by the Financial Accounting Standards Board (FASB) would not adequately protect the public given the FASB’s apparent “back-pedaling on corporate disclosure of contingent liabilities.” The November 15 letter states, “under fire from the registrant community and their attorneys, the board recently stated that it would reevaluate its proposal and consider ways of moving forward while avoiding requirements for disclosure of ‘predictive’ information, because of concern that it
could be potentially prejudicial in litigation.”

IEHN calls for the SEC to “instead encourage FASB to shape its guidance to ensure that the categories of information required to be disclosed are those for which disclosure would be, as a general matter, ‘more probative than prejudicial.’” IEHN, a “collaborative partnership of investment managers, advised by nongovernmental organizations, concerned about the financial and public health risks associated with corporate toxic chemicals policies,” also calls for the SEC to improve the shareholder resolution process by “empowering investors to use the process to address germane issues, including emerging risks.”

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For decades, manufacturers, distributors and retailers at every link in the food chain have come to Shook, Hardy & Bacon to partner with a legal team that understands the issues they face in today's evolving food production industry. Shook attorneys work with some of the world's largest food, beverage and agribusiness companies to establish preventative measures, conduct internal audits, develop public relations strategies, and advance tort reform initiatives.

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