As the Securities and Exchange Commission comes under increasing fire for failing to properly regulate the mutual fund industry, the environmental sector is now sounding off as well, claiming the commission has failed to enforce its own rules requiring companies to disclose environmental and social liabilities.
Sanford Lewis, an environmental and corporate accountability attorney, has made a film about the issue with the SEC refusing to be interviewed on camera, reported SocialFunds.com. Lewis began working on corporate underreporting of environmental and social liabilities in 1997, when he prepared a report on such obfuscation by the mining company Phelps Dodge for the United Steelworkers of America, SocialFunds.com reported.
"The United Steelworkers filed a petition for enforcement with the SEC, and then I began to look at one company after another, filing a whole series of letters with the SEC asking them to take enforcement action," said Lewis. "The word we got back from the SEC on all these letters was, 'thank you very much, we received your note, our process is secretive from this point on,' and then we never heard back from them."
"The letters fell into the SEC black hole," Lewis told SocialFunds.com.
The scandals surrounding Enron and other companies prompted Lewis to make his movie, called "Off the Books! Environment & Human Rights," to raise awareness of the problems surrounding corporate reporting and accountability.
"I basically suspended my legal work for a few months and just worked on this film without pay because I felt so strongly that this issue needed to be addressed and a film could be a powerful way to get the point across to more people," said Mr. Lewis.
Lewis isn't sure if the SEC will defend the rights of investors on this issue.
"I've met with the SEC before about these issues, and it basically comes down to what priority they give to how they allocate their resources," Mr. Lewis said. "Their outlook is, 'we've got bigger fish to fry,' and so these issues fall to the bottom of the pond--that's what they say privately."
"I think the commission knows there's increasing scrutiny, and that this issue is not going to go away, but I think it's going to take political pressure to get the SEC to actually enforce its reporting requirements," Lewis concluded.