Call for web based library of documents in New York analysts' scandal
A USA pressure group, the Public Investors Arbitration Bar Association (PIABA) has called for regulators to produce an on-line database of relevant documents relating to the investigation into analysts' behaviour in cases where sanctions have been applied.
PIABA has written to the Securities and Exchange Commission (SEC), National Association of Securities Dealers (NASD), the New York Stock Exchange (NYSE) and the North American Securities Administrators Association (NASAA) inviting them to make such information available as a matter of course in such actions to enable investors to make informed decisions as to the bringing of actions.
However, the proposal may be a double edged sword: World Money Laundering Report: Online has made frequent comment about the race by law firms to issue class actions and the release of such documents is likely, it appears, to fuel this trend. Recently an action was brought based on documents disclosed in a regulatory investigation.
In the letter PIABA President J. Pat Sadler, an Atlanta investor arbitration attorney, wrote: "[A]bsent timely and full access to the documents that helped persuade regulators that wrongdoing had occurred, it will be difficult for investors to make their case. History has shown that the offending firms will do everything in their power to prevent disclosure. As such, we believe the time has come for an entity to step up to the plate and provide an accessible pool of evidence in this and future cases so that defrauded investors have a fair opportunity to prove their cases."
There are clearly merits in the plan but the risk of significant risk of such actions must not be underestimated.
The position in the USA is already much more open than in many other countries where even basic information about regulatory proceedings is difficult to come by. In the UK, for example, the FSA will not release, except in special cases, copies of its regulatory findings.
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