Disclosing Terrorism Risks Could Force Congress To Act

With the credibility of corporate financial statements in severe doubt following the Enron scandal, a report that the U.S. Securities and Exchange Commission might require firms without terrorism insurance to disclose that fact to investors makes sense.

The SEC's consideration of this new mandatory disclosure couldn't have come at a better time, as public skepticism about the true financial status of publicly traded companies is at its peak. With auditors allegedly corrupted by consulting contracts, and the integrity of stock analysts potentially compromised by investment banking fees, anything the SEC can do to assure full disclosure of a company's liabilities–including terrorism exposures–would be welcome.

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