The Securities and Exchange Commission is looking to hire five full-time staff members to take a hard look at companies with ties to rogue nations.

The staff will work for the new Office of Global Security Risk, the Wall Street Journal reported. Congress, in its fiscal 2004 funding bill, required the SEC to identify companies operating in countries linked to terrorists and provide investors with information about the activities.

The idea is to help investors who don’t want their money tied to companies that do business in countries that sponsor terrorists or violate human rights. The change was brought about by human rights advocate Rep. Frank Wolf, R-VA, chair of the House Appropriations subcommittee that oversees the SEC's budget.

The new office will work under the corporation finance division, which reviews the financial reports of more than 12,000 U.S. public companies. SEC managing director Laura Cox said that if the reviews turn up any red flags, the agency will inform the State Department and the Treasury Department’s Office of Foreign Assets Control.

Wall Street firms have objected that the new office may add politics to SEC reviews. In addition, the Council of Institutional Investors warns that not all companies should be tainted if they simply do business in one of the seven countries designated by the State Department as supporting terrorism. It said firms that sell food or medicine in such places are different from those arming terrorists.

The Iowa Public Employees' Retirement System supports the move. It said it hopes the SEC's actions "will help us to know which companies are indirectly supporting terrorist activities."

Many investors want to steer clear from any connection to rogue nations. For example, New York police and firefighters don’t want their pension money invested where it might support terrorism and have questioned ConocoPhillips about business ventures in Iran and Syria. ConocoPhillips responded that it won't approve operations in sensitive countries "unless it is convinced that it can do so legally and within the spirit of U.S. laws."

Alan Beller, SEC’s corporation finance division director, told the Journal that hundreds of U.S. firms operate in overseas hot spots and some disclose little information. Some firms insist that their operations in rogue nations are so small as to be immaterial to investors. Now, that information must be revealed, regardless of the size of the venture. Congress says even small operations can affect a company’s stock price and should be revealed to investors.

"We haven't changed the definition of materiality here. It is what it's always been," Beller said. But, given the Sept. 11, 2001, terrorist attacks on the U.S., he added, "what may not have been material in August 2001 might be material today."