Plan set to increase company disclosure

Government wants to require executives to vouch for reports

? The government moved closer Wednesday to requiring faster and broader disclosure of company changes and to having CEOs personally vouch for the accuracy of financial reports.

The Securities and Exchange Commission voted to open the proposals inspired by the collapse of Enron Corp. to public comment for 60 days. They could become final after that.

Companies also would have to report important changes in their operations much faster and report a wider group of changes under the new rules tentatively approved by the SEC.

The “8-K” form for reporting significant events or corporate changes would have to be filed with the SEC within two business days, rather than the current requirement of five days for some types of information and 15 days for others.

SEC Chairman Harvey Pitt said before the vote it was impossible to know whether the requirement for corporate chief executives to personally certify financial reports could have prevented the Enron debacle. Still, he said, “If we don’t learn from history, we’re doomed to repeat it.”

“This is not a time to be stingy with our regulatory responses to some of the chicanery and fraud” that appear to have occurred at several publicly-traded companies, Pitt said.

Many investors have been unnerved by Enron’s collapse and distrustful of the accuracy of the financial reports of big companies, contributing to a volatile stock market also roiled by sluggish earnings and terrorism fears. A broad sell-off Tuesday sent the major market indices to their lowest closes of the year.

Among the new items that would have to be reported in the 8-K: The sort of off-balance-sheet transactions that helped topple Enron; unexpected departures of top executives, senior managers or directors; defaults on company debt; and so-called “lock-out” periods during which employees are barred from selling company stock from their retirement accounts.