An end to the secret “love” letters…
Although the SEC officially began releasing comment letters last year, actually finding those comment letters on the site has been a bit like searching for hen’s teeth. Or old love letters from high school. Even when the company in question disclosed in one of its filings that it had received a comment letter from the SEC (as I footnoted here regarding Ford Motor Co. (F)), it was impossible to find the letter on the SEC site. That’s changing dramatically, as shown here (hat tip to TheCorporateCounsel.net for catching the change).
Now, with over 14,000 comment letters available so far for 2006 — many of them added to the site in the past few weeks — the trick is finding what you’re looking for. A quick search for F and "upload" — the SEC-code for letters that they send to a company (the response from the company is called "corresp") — returns these four letters, the first of which dates back to June 16. Remember, Ford first disclosed the existence of these letters in the 8-K it filed on Oct. 20.
Maybe this seems like a bit of inside baseball — the type of thing that only a true SEC geek could get excited about. After all, it didn’t take a genius to figure out that Ford’s in a bit of trouble. But a quick check of a far more healthier company like IBM (IBM) shows that the company has received two comment letters this year. Yet a quick search of IBM’s filings shows that the company never disclosed the existence of those letters in any of its other filings. Ditto for Apple Computer (AAPL), which has received two SEC comment letters since August, but hasn’t disclosed either of those in its filings based on a quick search of its other filings.
With all of those letters floating around out there — the majority of them added to the SEC database in the past few weeks — there’s lots of new searching to be done. Let’s hope this puts an end to most of those secret love letters.
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December 6th, 2006 at 3:36 pm
Uncover SEC Comment Letters…
Michelle Leder shows us how to find those “hidden” SEC comment letters. These comment letters have been available for about a year, but they have been almost impossible to find until now.
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December 6th, 2006 at 3:41 pm
Thank you for sharing this SEC search tip. Now what interesting tid bits should I be looking for in these SEC comment letters?
I wonder if the companies that I track that are going through the process of going private have SEC comment letters. I have noted many of their filings discuss responding to SEC concerns. I always wondered exactly what those concerns were. Maybe I’ll be able to find out now?
December 6th, 2006 at 6:59 pm
Actually there will probably be some phone extension changes as part of this process. Have reviewed Berkshire’s and a few others and they have the direct phone lines for the respondant and SEC point of contact listed in the letters.
December 6th, 2006 at 11:47 pm
Thanks Michelle, how timely. Articles in NT Times about the SEC hearings so looking like old boy net is still active. Post captures the level of distrust out there. SEC isn’t the rock
to build any confidence upon. Thus the premise that scanning SEC for insights can only go so far. In the end the markets set the tone. Price action will often act in advance of negative disclosures.
Interesting story today that Corp insiders have been net share sellers 16:1 lately. What could they possibly know?
D.C. MACK ATTACK
By RODDY BOYD NY Post
December 6, 2006 — Capitol Hill lawmakers grilled Securities and Exchange Commission officials yesterday, confronting the Wall Street cops with charges they went easy on politically connected Morgan Stanley boss John Mack in an insider-trading investigation.
The Senate Judiciary Committee held hearings yesterday to examine whether Mack’s political influence protected him from being investigated in an insider-trading case involving hedge fund giant Pequot Capital Management.
“At best, it looks like an extraordinary lack of oversight [by the SEC],” Pennsylvania Sen. Arlen Specter said. “At worst, it looks like some sort of cover-up.”
The charges of favoritism at the SEC exploded into view when former SEC lawyer Gary Aguirre told Senate investigators his supervisors – who had just given him a promotion – fired him to protect Mack, who raised at least $200,000 for the reelection campaign of President Bush and more recently gave at least $36,000 to the Democratic Party.
The basis of Aguirre’s charges centers on General Electric’s 2001 takeover of Heller Financial. The trading pattern of Pequot triggered SEC sensors, and eventually the case fell to Aguirre to investigate.
Aguirre argued that Mack’s role as head of Morgan Stanley in 2001 – the financial adviser to Heller Financial – and his close relationship to Pequot founder Art Samberg, merited taking his deposition.
Soon after, Aguirre was fired for what officials called unprofessional conduct.
However, a former colleague of Aguirre, enforcement branch chief Eric Ribelin, offered testimony that generally supported Aguirre’s contention that the SEC soft-pedaled its handling of Mack.
Earlier this week, the SEC announced that it formally dropped the investigation into Pequot without filing any claims.
Also, a case-closing memorandum provided by the SEC in the Pequot matter said that Mack had no knowledge of the GE-Heller deal when he moved to CSFB from Morgan in 2001.
Aguirre’s former supervisor, enforcement-division branch chief Robert Hanson, yesterday was tongue-tied when confronted with an incriminating e-mail in which he described John Mack as “another bad guy.”
The SEC’s Hanson first said he did not remember the basis for writing the e-mail, which was dated 18 months ago, then said it was a reference to Mack’s nickname as a cost-cutter, “Mack the Knife.”
Shortly thereafter, Hanson said, “In hindsight, it was probably to encourage, probably, the investigation to wherever it led.”
roddy.boyd@nypost.com
December 7th, 2006 at 9:16 am
Cool! Thanks! Wouldn’t it be cool if a search engine could search the contents of the SEC letters for interesting topics such as “revenue recognition”?