The letter by House of Representatives Financial Services Committee Chairman Barney Frank asks the regulator to consider a more accurate method for compiling the list, and argues that some of the companies on the list have dumped their ties with the terrorist states since the list was created.
“It is a significant concern to me that by developing its list without any clear criteria, the SEC’s efforts will dilute the effectiveness of publicizing the names of companies that do have material investments in the economies of rogue states,” Frank wrote in the letter.
The SEC made available to investors in June (See SEC Makes Terrorism-Link Info Available to Investors) lists of companies who have business dealings with countries the U.S. has designated as state sponsors of terrorism, such as Cuba , Iran , Syria , North Korea and Sudan .
Frank wrote: “While I acknowledge the SEC’s good intentions and the disclaimer you have added to your webpage that the companies named may not be involved in the direct financing of terrorism, the concept of a list generated in this fashion strikes me as unfair and perhaps counterproductive.
The Congressman also pointed to proposed legislation – Iran Sanctions Enabling Act – meant to deter investments in Iran by directing the Treasury Department to publicly identify companies active in that country’s energy sector.
“Disclosure is important, but in this instance it is my belief the disclosure needs to be absolutely accurate or not occur at all,” Frank wrote.