American CEOs swear to reassure investors

Washington: Chief executive officers (CEOs) of hundreds of America’s biggest companies swore by their financial results on 14 August 2002 under a government order meant to reassure investors.

As Treasury Secretary Paul O’Neill called business honesty “the new patriotism,” personal oaths from CEOs and chief financial officers (CFOs) flooded the US Securities and Exchange Commission (SEC), along with a few results restatements.

As the filings poured into the SEC, stocks soared, pushing the Standard & Poor’s 500 index up 4 per cent to its highest level in a month as reassurances of the accuracy of past results eased investor fears of corporate skulduggery.

The Dow Jones Industrial Average closed up 260 points, or 3 per cent, at 8743.31 points. Of the 942 companies covered by the SEC’s unprecedented, one-time order requiring CEO and CFO certifications of past results, 695 had to comply by the close of business on 14 August. Another 247 companies will file later.

A half-hour after the SEC’s 5:30 pm EDT cut-off, officers of 620 of the 695 companies due to certify on 14 August had done so, according to a Reuters analysis of SEC website data, the online Edgar-Online financial filing service, a private investor data service and company reports.

As nervous markets scanned for companies failing to comply, the SEC was sending investors to Edgar (www.edgar-online.com) to check whether individual company CEOs and CFOs had taken their oaths.

President George W Bush, speaking in Milwaukee, noted the SEC deadline and said: “By far the vast majority of those who run corporate America are good, honourable people. We’re not going to let the few ruin the reputations of the many.”