How SEC Chair Mary Jo White Gave Congolese Warlords Some Unexpected Help – by Zach Carter (Huffington Post – August 20, 2015)

http://www.huffingtonpost.com/

Finally, some good news for brutal militias.

WASHINGTON — Warlords in the Democratic Republic of Congo got some help from two conservative judges on Tuesday, when a federal appeals court for the District of Columbia ruled against part of a key regulation on conflict minerals.

But they also got an unlikely assist from Securities and Exchange Commission Chairwoman Mary Jo White, whose very agency was defending the rule before the court.

Armed militias in eastern Congo have long relied on the mining of tantalum, tin, tungsten and gold to finance more than a decade of violence, much of it targeting civilians. But militia access to mining wealth was dramatically curbed in 2012, when the SEC adopted a new regulation requiring U.S. companies to audit their supply chains for conflict minerals. The agency also required corporations to disclose the findings of those audits to consumers in simple language that explains whether their products are “DRC conflict free.”

Congress directed the SEC to write the rule as part of the 2010 Dodd-Frank financial reform law. The bipartisan measure was designed to embarrass companies that purchase minerals from mines controlled by violent groups.

But White criticized the regulation in a speech shortly after she took over as SEC chairwoman in 2013, bemoaning congressional mandates that “seem more directed at exerting societal pressure on companies to change behavior, rather than to disclose financial information that primarily informs investment decisions.” Those comments appear to have undermined her own agency’s efforts to defend its work.

In Tuesday’s decision, the federal court concluded that the consumer disclosure aspect of the rule violated corporations’ First Amendment rights to free speech. Companies, the court ruled, cannot be legally obligated to criticize their own products — even if the required disclosures are factually accurate.

It’s a sweeping view of corporate personhood that the SEC could challenge in an appeal. But in making his case against the agency, the court opinion by Judge A. Raymond Randolph directly quotes from White’s 2013 speech in a footnote:

For the rest of this article, click here: http://www.huffingtonpost.com/entry/mary-jo-white-congolese-warlords_55d5e88ce4b055a6dab3179f

Comments are closed.