Investors breathed a collective sigh of relief when the markets closed up on August 14, 2002 on preliminary indications the vast majority of companies had met an important deadline set by the Securities and Exchange Commission. The SEC had given CEOs and CFOs of designated large companies until the end of the day to swear to the accuracy of their companies' financial results, and many waited until the very last minute.

The SEC is still sifting through the last-minute deluge and publicly tagging statements that are inconsistent with the standard SEC format. TruServ and Enron were the first two to fall into this category. The SEC has said it does not expect to have "an intelligent assessment" of the filings until next week. But, so far, all indications are that the new rules are succeeding as planned in restoring investor confidence.

Although no major new accounting scandals were disclosed, the certification initiative did succeed in flushing out some smaller problems at a handful of the roughly 700 companies that were required to meet the August 14th deadline. During the past few days, the Interpublic Group, The Pantry, and Household International all disclosed errors in reports previously filed with the Commission.

More problems may surface in the coming week. As of yesterday, the SEC's Web site showed more than 670 companies have filed statements. Others may have provided explanations or requested extensions instead. A few (Reuters estimates that as many as 10) companies have argued that their reporting calendars allow them to certify their results later than the date shown on SEC's schedule.

The capital markets responded with cautious optimism, sending the Standard & Poor's 500 Index to its highest close in more than a month, and even the media seemed to lighten up a little. The NY Post commented, "Embattled Securities and Exchange Commission Chairman Harvey Pitt may finally have gotten something right."

-Rosemary Schlank