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We write in response to Alix Nyberg Stuart's insightful piece on interactive data ("XBR-what? " August). Based on the comments at the Securities and Exchange Commission's June roundtable, we share the author's view that companies filing their financials in XBRL may see increased attention from securities analysts. Analysts with extensive experience on both the buy-side and the sell-side reported that receiving interactive data directly from the reporting companies, without the need to re-key numbers into their spreadsheets, would save time and effort, making it easier to cover more companies.
Your article further reports that companies preparing XBRL filings have encountered only minor difficulties, and that moving to XBRL is "simpler and less costly than nearly any other data-standardization effort one could cite." We have heard the same story from a range of companies furnishing their SEC filings with interactive data, and the SEC will continue to listen to test filers to fully understand the process of providing interactive data to the markets.
Faster, easier access to more information about a public company carries obvious benefits for investors large and small. Interactive data may also offer a particularly compelling alternative for a company seeking more research coverage and eager to efficiently share its story with the markets. The Commission continues to explore the potential benefits to investors of interactive data and XBRL.
We offer the usual disclaimer that we speak only for ourselves and not for other SEC staff or commissioners.
James Freeman
Investor Advocate
Brigitte Lippmann
Attorney
U.S. Securities and Exchange Commission
Via E-mail
Toxic Torts
I am a physician/toxicologist who has been actively involved in toxic tort matters for 30 years ("Problem Solvent," August). The benzene issue is like many we have seen before-extraordinarily low doses of a potentially dangerous agent allegedly causing a serious or fatal disease. The ubiquitous nature of benzene provides an endless source of defendants for these generally meritless claims. They must, however, be addressed with good, solid science early and intensely. Motions to dismiss with solid scientific support must be filed. Absent vigorous defense approaches, these claims will expand, lead to business failures, and be enormously costly.
Ronald Gots
Via E-mail
Further Thoughts on Dividends
Your article "Learning to Love Dividends" (Insight, August) is timely and well documented. Please let me offer some further thoughts: (1) To reward investors, share buybacks should be made at depressed prices. (2) The reinvestment of dividends drives, or compounds, accumulated wealth over time. Thus, low- or no-dividend stocks very substantially inhibit wealth- building, just as spending in excess of income does. (3) Management with its eyes on option programs has no incentive to pay dividends in the near term. This is a strong argument to employ share grants that vest over many years and to eliminate option programs. (4) One-half of all companies are below average. To make a bold statement, the lesser half should pay out all earnings every year, until their returns justify reinvestment. Were they to do so, the average dividend payout ratio would be at least 50 percent.
Robert Boyd
Via E-mail
Missing the Mark on "Missing the Mark"
It appears that your September Topline article "Checkups on Providers Miss the Mark" did not consult a CPA and used a person in a competing industry as its "expert." It's not really that surprising that a security consultant who can't provide SAS-70 audits would recommend abandoning the audit in lieu of an information-security audit.
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