If an analyst receives related compensation, the statement must include the source, amount, and purpose of such compensation, and further disclose that such compensation may influence the recommendation in the research report.
In addition, a broker or dealer who publishes, circulates, or provides a research report by an analyst will be required to make a record within 30 days after each calendar quarter in which the analyst made the public appearance.
"We want analysts to say what they mean, mean what they say, and sign their name to that," SEC commissioner Cynthia Glassman told Bloomberg.
Cendant Boosts Governance
Cendant Corp. announced enhancements to its corporate governance that it says were designed to strengthen its board of directors' oversight of management.
"The capital markets demand the highest level of corporate governance standards and transparency in disclosures," said Cendant chairman and CEO Henry R. Silverman in a statement.
For example:
- Cendant will require two-thirds of its directors to be independent.
- Cendant will only report GAAP earnings per share and discontinue using pro forma earnings per share beginning with the first quarter of 2003.
- Cendant will apply a stricter "independence" test to members of the compensation committee and the nominating and corporate-governance committees, even though under Sarbanes-Oxley it only is required to apply the tougher rules to audit-committee members.
- Nonemployee directors will meet without management regularly following meetings of the board.
- Cendant approved a new code of ethics to promote a level of ethical conduct from senior executives and finance officers.
- The board also established an annual self-evaluation process under which information will be gathered each year and then discussed at both board and committee meetings in February of each year.
Under the news setup, Cendant's audit committee will meet at least six times per year, and will review the company's public disclosure processes and public financial disclosures. It will also review key auditing principles and decisions, and approve the company's independent auditor and all audit and nonaudit work.
Jumbo Junk
It looks like investors are slowly warming up to large junk-bond issues.
Crown Cork & Seal Co. Thursday upped the size of its junk-bond issue to $2.05 billion from $1.75 billion, which would make it the largest U.S. junk-bond sale since February 2000, according to Reuters.
The company's management said it will use the proceeds to help eliminate its debt maturing this year, as part of a $3.1 billion refinancing plan.
In addition, auto-parts maker TRW Automotive Inc. issued about $1.58 billion of 10-year junk notes in a four-part deal through a private placement—raising 13 percent more than it had planned.
The sale was intended to help private equity firm Blackstone Group finance its $4.73 billion purchase of a 58 percent stake in TRW Auto from Northrop Grumman Corp., according to Reuters.
"The high-yield market is odd in that in the short-run, deals that get done and deals that don't are purely a function of how much cash is available," Brendan White, who invests $1.4 billion of junk bonds for Fort Washington Investment Advisors Inc. in Cincinnati, told the wire service.
In addition, two investment-grade companies completed jumbo bond offerings on Thursday.
Boeing Corp. issued $1 billion in a two-part global debt sale, up from an originally planned $750 million. It issued 10-year notes priced to yield 125 basis points over comparable Treasuries and 30-year bonds priced at 145 points over Treasuries. The issues were rated A2 by Moody's and A-plus by Standard & Poor's.
And Goldman Sachs Group Inc. issued $2 billion in 30-year global senior bonds, double its original plan. They were priced at par to yield 6.125 percent, or 132 points over comparable Treasuries. The bonds were rated Aa3/A-plus.
In what seems like a relatively puny offering, ChevronTexaco Capital Co., a unit of ChevronTexaco, raised $750 million from the sale of five-year senior notes.
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