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WASHINGTON - The U.S. Securities and Exchange Commission has suspended its online search tool to help investors identify companies active in "sponsors of terrorism" countries after lawmakers and business groups criticised the site as unfair to some companies.
SEC Chairman Christopher Cox said the agency would revamp the website tool so it would more accurately reflect a company's activities in the countries.
The site generated "exceptional public interest" with more than 150,000 hits from June 25 to July 16, and the SEC received both positive and negative comments about it, Cox said in a statement.
Before the tool was removed from the SEC website, it could be used to search for companies whose annual reports contained references to business related to Sudan, Syria, North Korea, Iran and Cuba.
The countries are designated as "state sponsors of terrorism" by the U.S. State Department.
Several lawmakers and business groups complained about the search tool. They said the unsophisticated tool tarnished some companies' reputations because listings were compiled without regard to the content of a company's disclosure or its materiality.
Cox said the complaints "focused chiefly on the lack of updated information beyond what a company has included in its most recent annual report."
Republican SEC Commissioner Paul Atkins also criticised the list in an interview last week and said the SEC should fix or drop the online tool.
Cox said the agency would revamp the tool to address concerns, including its inability to access more current data about a company's activities in a terrorist state because they may have been discontinued since the annual report.
Rep. Spencer Bachus, the top Republican on the House Financial Services Committee, applauded the SEC's decision.
Bacchus said in a statement that "retooling this website, which previously provided access to incomplete and extraneous information, will enhance its usefulness to citizens seeking to determine whether their investments are being used to finance terrorism or genocide."
Cox also said SEC staff was looking at whether the use of interactive data tags applied by companies themselves could let investors "easily discover this disclosure without need of an SEC-provided Web tool at all."
Cox has been pushing the agency to transform its database of electronic filings into an interactive database with searchable electronic tagged information in a format known as XBRL.
As the agency reconsiders the disclosures' accessibility, the information will still be available through the SEC's filing database and its full-text search tool.
- REUTERS
