Barron's: On Wall Street, Aug. 14 is high noon: it is the appointed moment when the wrongdoers are to show their faces to the fearful populace. But unlike in the powerful Gary Cooper film, the identities of the bad guys aren't even known.
That is the date by which the SEC is requiring CEOs of 945 of the largest companies to attest to the accuracy and propriety of all company financial documents dating back to their 2001 annual reports. Thereafter, CEOs will have to sign off personally on the veracity of their accounts, at the risk of personal liability for misstatements.
The assumption among investors is that numerous companies will have to restate prior earnings reports, or make other untoward disclosures, to comply with the regulation and potentially avoid fraud charges. Trouble is, there's no way to be sure which companies are most likely to blindside the market with ugly revisions -- a significant factor in the minds of investors who might otherwise take advantage of depressed share prices to do some buying.
For those who recall the movie "High Noon," the townspeople showed plenty of cowardice in abandoning Gary Cooper's sheriff character, even when they knew it was the killer Frank Miller, and only Frank Miller, who was set to arrive for mayhem-making on the noon train.
Without the knowledge of which corporate villains might emerge to shoot holes in their portfolios, investors are in no position to show much backbone before the bad guys are taken out. Still, braver buyers could take advantage of the month until Aug. 14 to step forward and collect some attractively priced shares while others cower behind the curtains.
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This ain't the time to be a hero...plenty of heroes lost their ass since 2001... |
