Sen. Elizabeth Warren Banking Hearing with SEC Chair White

as you know the SE C's mission is to protect investors and our capital markets and requiring companies to disclose information is a critical part of that mission publicly traded companies may not like disclosing potentially embarrassing or damaging information but the SEC job is to look out for investors not for big companies now there's a lot you could be doing to protect investors there are still twenty mandatory dodd-frank rules from 2010 that the SEC hasn't completed and there are more than a million people including countless investors and former SEC commissioners pushing the agency to require publicly traded companies to disclose their political contributions but instead of moving forward on issues intended to help investors you've actually had it in the opposite direction since your first year in office you've dedicated significant SEC time and resources to a project you invented and called the disclosure effectiveness initiative according to the 2013 speech you gave your big idea behind this project is that the SEC might be requiring companies to disclose too much information causing investors to suffer from something you call information overload now I'm all for eliminating redundant disclosures or improving the ways that information is presented but honestly I have never heard of the concept of information overload in the context of investing in stocks I've never heard of the idea that investors actually want less information that they're getting so I have a pretty simple question the SEC is an investor protection agency so when you launched your project what evidence did you have that information overload was a real problem that investors wanted you to solve it's an issue center one that the Commission's been looking at for really decades among others but the purpose of disclosure effectives and by the way it didn't it wasn't invented by me it was basically in response to a congressional mandate to do a report that reviewed our entire I'm sorry was this report that you're talking about it was it was I think presented to Congress filed with Congress in in I think in at the end of 2013 so our you know wait are you talking about the JOBS Act to report yes because that one I actually looked at that yeah and what was asked of you was that the SEC review one subset of disclosures to see if that subset should be modified as they apply to one subset of companies so-called emerging growth companies your project has gone way beyond the boundaries identified in that law yeah emerging as guys are very broad swath as you know but we've been for decades that the SEC is my point undergoing disclosure effectiveness ruin and I absolutely agree that there's nothing there's nothing more important like called the information overload this is what you identified and I just want to know what evidence you have that this is a real problem that investors have come to you and said we're worried about getting too much information just what evidence did use of all the review is not limited to duplicative or overloaded information as we make review in this 2012 Jobs Act it's no no our review it's it's meant to make disclosure more meaningful to investors and we've also gotten comments I will say recently from you know all kinds of constituting our investor Advisory Committee about identifying and really not objecting to removing things that are repetitive duplicative not useful its and the purpose of this review is to make disclosure more meaningful for investor I did not I started this by saying I don't have a problem with getting rid of duplication I don't have a problem with making it more effective the question I asked you about is whether or not this so-called information overload is a real problem identified by investors that have come to you let's be honest about this cannot find and you have not produced a single investor who has complained to the SEC about receiving too much information investors don't want less information about the companies where they put their money in fact I think that's ridiculous the SEC zone investor advisory committee which includes everyone from hedge funds to pension funds to retail investors say that recently that the current amount of disclosure and here was their word is appropriate so who wants less information to be disclosed it's pretty clear the National Chamber of Commerce which represents the giant companies that have to do the disclosing the chamber has produced a fact free report whining about this non-existent information overload problem in 2014 shortly after you launched your initiative information overload is a problem that was invented to justify a project aimed at making life easier for big companies and harder for investors in fact Heath Higgins the SE C's head of the corporation finance division and the lead on this project kind of let the cat out of the bag in 2014 when he said in a speech the aim of this project was quote to reduce the burden on companies consistent with our mission of investor protection wherever we can now I'm recognized that congressional Republicans slipped language into the must pass highway bill at the end of last year that asks the SEC to review disclosures with an eye toward eliminating ones that are unnecessary of course that doesn't justify the SEC dedicating resources to this project for two years before that but nevertheless given the views of your own investor advisory committee that the current disclosures are appropriate do you agree that the supposed information overload problem does not exist well I think if you go back to even Thurgood Marshall years ago in defining materiality under the federal securities laws the concern was expressed about you know too much information could sort of cloud the meaningful I think you're you're you're describing our disclosed our effectiveness review in a way that's much narrower than its intent and I think one of the most important things about a disclosure effectiveness review and again we're listening to every but we're also talking about adding information in this review that is needed to be added for example in foreign taxes and other things but is also the manner in which the information is being provided to investors given how they've which is a huge hearing over our time so let me just stop you there I have said now three times I think in just this brief exchange I'm fine with cutting out duplication I'm fine with making the information clear and as should be clear I'm fine with providing more information what I'm trying to identify is something that you specifically have targeted and talked about I am frustrated that at your direction the SEC has voluntarily spent two years trying to address a problem that you have no evidence exists instead of making up work to help giant corporations the SEC should do its job starting with the twenty required rules under dodd-frank that still aren't fixed six years after the law was passed your job is to look out for investors but you put the interests of the Chamber of Commerce and their big business members at the top of your priority list a year ago I called your leadership at the SEC extremely disappointing today I am more disappointed than ever thank you mister and I'm disappointed in your disappointment and could not agree disagree any more with your characterization of what we're trying to do to improve our disclosure regime for investors to make it better and when you bring the evidence of this so-called information overload that you have initiated then we can have more progress I would suggest reading the SBA concept release for the range of issues we're addressing including that well I'd like to see some evidence that there really is a problem here

Channel: Senator Elizabeth Warren

Views: 104,287

Keywords: elizabeth warren, senator warren, mary jo white, chairwoman white, chair white, Securities and Exchange Commssion, sec, banking, senate banking committee, banking committee, information overload

Id: 27ZJlH0SybE

Length: 8min 52sec (532 seconds)

Published: Wed Jun 15 2016