WORKING TO RESTORE INVESTOR CONFIDENCE
This summer, we have seen the stock market of the late 90s evaporate. A wave of earnings restatements, as well as some serious cases of apparent fraud, have hit the stock market hard. Many Americans are concerned about their portfolios, retirement savings, and college funds. While this market decline has been difficult to watch, the good news is that the fundamentals of our economy are sound. Home sales are steady, unemployment is falling, and economic growth is predicted to be positive. But we have a real problem with the way some corporate leaders have operated their companies and prepared their books, and Congress is committed to making sure we protect investors and severely punish the guilty.
In the House, we have passed a series of bills aimed at protecting the pensions and retirement savings of millions of Americans and cleaning up the corporate deceit that has recently come to light.
The creation of a middle income Investor Class, with nearly half of American households building savings in equities, has been good for our economy and we don't want them to flee the market as a result of these scandals. It is critical that we act to protect and improve the rights of investors. Back in April, we passed the Pension Security Act of 2002, legislation designed to protect employees and their pensions. The bill requires companies to alert their employees 30 days before they enter a "blackout period," when they will be barred from selling their stock. It also provides increased access to investment advisors and allows employees greater flexibility in the management and sale of company stock received in their 401(k) plans.
The House also took early action by passing the Corporate and Auditing Accountability, Responsibility, and Transparency Act of 2002. This bill was designed to restore confidence in accounting practices by increasing corporate disclosures and responsibilities, strengthening the Security and Exchange Commission's ability to find and eliminate fraud, and reducing analysts' conflicts of interest. Although the Senate could have acted sooner, the House and Senate have come together on good legislation to implement commonsense protections for investors and shareholders.
While these measures aren't intended to directly spur economic growth, they send a strong signal to the wrong-doers in corporate America that fraud, deceit, and plain lying will be punished. Restoring investor confidence in corporate leadership is key to building a stronger foundation for the kind of lasting growth that is vital to the economic security of American families.
