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The Securities and Exchange Commission should require companies traded on U.S. stock exchanges to reveal any business operations tied to Sudan and to other state sponsors of terrorism, the Government Accountability Office said.

In a broad review of U.S. investment in Sudan, the GAO found state fund managers have divested or frozen $3.5 billion in Sudan-related assets since 2006 in response to the humanitarian crisis in Sudan.

Another sign of investor concern: The total value of U.S. shares invested in six key foreign companies with Sudan operations fell by almost 60 percent during two years to $5.9 billion at the end of 2009. “This decline cannot be accounted for solely by a reduction in stock prices for these companies,” the GAO said.

A total of 35 U.S. states have passed laws or adopted policies restricting Sudan-related investments. To comply with these laws, fund managers rely on nongovernmental organizations and research companies to provide lists of companies with Sudan ties. The GAO said its own comparison of three such lists — which together had 250 company names — found only 15 companies that appeared on all three.

“Research groups we spoke to said that they find information that comes directly from the companies they are examining to be particularly useful. For example, they would consider an SEC disclosure filing to be a reliable source of information,” the GAO said. The watchdog pointedly said that the SEC has the power to require publicly-traded companies to disclose any “material” information important to investors. “The strong demand for this information from states that require divestment, as well as from other investors, indicates that this information could be considered material.”

FAST FACT: In an embarrassing June 2007 experiment, the SEC created a website to give investors access to publicly-traded companies’ annual report disclosures that included any reference to business in Sudan, Cuba, North Korea, Iran, or Syria. The site was taken down one month later after companies bitterly complained that the blacklist was unfair and misled investors with old information or references taken out of context.

Other new reports released by agencies including the Government Accountability Office (GAO) and various federal Offices of Inspector General (OIG):


  • Education Dept. has taken steps to handle an anticipated jump in volume of direct student loans now that private banks no longer receive fees for acting as middlemen in federal student loans (OIG).


  • Interagency group created by the Dodd-Frank law to study carbon trading should examine how a primary carbon market could affect liquidity in a secondary market, what role the OTC markets would play, and what federal regulators need to oversee U.S. carbon markets (GAO)


  • Analysis of grants made by the National Institutes of Health, which received $8.2 billion from the stimulus law to spend on scientific research and $400 million for comparative effectiveness research (GAO).


  • About $154.8 billion of $282 billion of total funds made available by the stimulus law for programs administered by states and localities has been paid out by the federal government (GAO).
  • FBI wrongly classified some nonviolent crimes by protesters as terrorism after the Sept. 11, 2001 terror attacks and made false statements to Congress about its surveillance of an antiwar protest in 2002 (OIG).

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