BusinessCompany NewsInternal audit exposes SEC failings

Internal audit exposes SEC failings

Bear Stearns report highlights delays that could have affected bank's collapse

The SEC’s reviews of company filings are often delayed and not as effective
as they could be, an internal audit has found.

A report by inspector general David Kotz, released on Friday, said that a
review of the oversight of Bear Stearns had revealed the problem.

The SEC took more than 13 months to review a Bear Stearns filing about its
exposure to subprime,
Financial
Week
reported. The delay included a three and a half month filing extension
that the SEC had granted.

The information could have helped ‘dispel the rumours that led to Bear
Stearns’s collapse,’ the report said.

The SEC disputed the claim. John White, who heads the division of corporation
finance at the SEC, said: ‘I believe it is inappropriate for you to have reached
conclusions, and to have made recommendations, about our program based upon your
examination of our review of just one company’s filings.’

Further Reading:

Read
the Financial Week story

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