Still, considering the emphasis the SEC is putting on the O/D bar as an enforcement tool, and with the increasing number of individuals bound to receive one in the coming years, it seems the commission would do well to fix the glaring hole in its new “big stick” policy. After all, anyone who has had SEC enforcement action (such as a bar or a cease-and-desist order) taken against him or her is listed in a database at the SEC. A simple computer program could cross-check those names against the names listed on all SEC filings and annual reports to spot overlap.
One reason the SEC neglects rigorous cross-checking, says Bayless, is that its resources, particularly technology resources, are limited. Another reason is that until very recently, the O/D bar was considered the death penalty of SEC punishments.
But Peloso says there really are no excuses. “The reality is that you’ll never stop people from doing things wrong if they really want to,” he states. “But this is preventable. Public corporations file with the SEC. A computer could pick this up.”
Kris Frieswick is a senior writer at CFO.
|Banned for Life
Notable recent officer and director bars.
|Date||Company||Name, Former Title|
|1/22/04 (consented)||Computer Associates International||Lloyd Silverstein, SVP finance|
|12/23/03 (sought)||Vivendi Universal||Jean-Marie Messier, CEO|
|6/5/03 (consented)||Xerox||Paul A. Allaire, CEO;
G. Richard Thoman, CEO;
Barry D. Romeril, CFO
|3/17/03 (sought)||Merrill Lynch (relating to Enron fraud)||Daniel H. Bayly,
Thomas W. Davis,
Robert S. Furst,
Schuyler M. Tilney
|3/11/03 (consented)||ImClone Systems||Samuel Waksal, CEO|
|2/26/03 (sought)||Kmart (drugstore division)||Enio A. Montini Jr., SVP;
Joseph A. Hofmeister, VP
|Various (sought)||HealthSouth||Richard Scrushy, CEO;
Angela C. Ayers, VP finance;
William T. Owens, CFO;
Weston L. Smith, CFO;
Emery Harris, controller and VP accounting