Regulators weigh in with policies related to Hurricane Katrina.

• Author: Heffes, Ellen M.
• Position: Financial Reporting Select Issues Update

Soon after Hurricane Katrina's devastation of the U.S. Gulf Coast in late August, regulators issued policy announcements for issuers, preparers, investors and others impacted by the disaster.

The U.S. Securities and Exchange Commission (SEC) Chairman Christopher Cox responded to the hurricane's wrath by mobilizing SEC resources to provide emergency regulatory relief to affected investors, companies and securities firms.

"In the face of such desperate conditions, we've got to do everything humanly possible to help our fellow citizens. No one in the region should have to worry about attempting to file government documents in near-impossible circumstances," Chairman Cox said. In addition, he said the agency is working to get information from law and accounting firms with offices in the region and will soon publish a notice extending the filing deadlines for those affected by the disaster. "We are also working to ensure that individuals and families who suddenly find themselves in desperate financial circumstances have access to representatives of securities firms that hold their assets," he added.

The SEC divisions and offices that oversee publicly traded companies, accountants, mutual funds, brokerage firms and transfer agents, among others, are preparing relief measures that will include extensions of filing deadlines and suspension of requirements to deliver documents to hurricane-affected areas. The relief will also enable broker-dealers to provide access to accounts held at offices that are no longer operable. The commission is also working with banking agencies and self-regulatory organizations as appropriate.

The commission established both telephone and email hotlines to provide immediate responses to questions or to hear from those that want to advise the commission of their needs. Additionally, the SEC said it planned to consult with public companies based in the disaster area, to ensure that commission mandates do not interfere with response and recovery. Also, the commission will continue to assess the impact of the hurricane on shareholders, customers, employees and the capital markets and take all necessary steps to assist in the recovery.

To prevent additional hardship for Katrina's victims, the SEC Division of Enforcement is on the lookout for Katrina-related securities scams and reports it will vigorously prosecute those who attempt to take advantage of this tragedy.

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