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Editor’s Note: Stopping firms from doing business with states that sponsor terrorism seems like an obvious priority for the U.S. government. However, efforts to use bodies such as the Securities and Exchange Commission can create unexpected problems. Bill Mayew, Robert Hills and Matt Kubic (of Duke, Penn State, and the University of Texas, respectively) argue that the SEC’s focus on terrorism has made it more likely to miss more traditional financial misreporting.
Daniel Byman
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The mission of the Securities and Exchange Commission (SEC) is “to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.” In the years following the 9/11 attacks, Congress instructed the SEC to review firm disclosures regarding activities in or with nations When the SEC Asks About Terrorism, It Misses Financial Misreporting