Is the SEC the new IRS?
Will it become a scary government agency for some coal companies?
For as long as I can remember, the IRS has been seen as one of the scariest of government agencies in our popular culture: "You can mess with the rest, but watch out if the IRS is coming after you. Don't forget, that's who got Al Capone!" I don't know how true it was or is but I do think the IRS is still one of the most feared of government agencies.
But is the IRS about to be replaced by the Security and Exchange Commission? Probably not -- I'm still waiting for someone to be prosecuted for the economic meltdown of 2008. On the other hand, SEC regulations are increasingly being used against coal companies and their officials. If you're following the Don Blankenship trial in Charleston, you probably know that he faces a three count indictment: the first is for a conspiracy to violate workplace safety laws (up to five years in prison) and the second and third are for lying to the SEC and investors (up to 25 years). Yes, if Blankenship is put away for the rest of his life it won't be, for the most part, for the safety violations which led to the deaths of 29 men at Big Branch but rather for his efforts to keep Massey Energy's stock afloat.
Recently, New York Attorney General Eric Schneiderman used SEC filing regulations to force Peabody Coal to be more honest about climate change. As the Associated Press quotes him:
"As a publicly traded company whose core business generates massive amounts of carbon emissions, Peabody Energy has a responsibility to be honest with its investors and the public about the risks posed by climate change, now and in the future," Attorney General Eric Schneiderman said.
USA Today explained the results of his suit against Peabody:
The world's largest publicly-traded coal company has agreed to make fuller public disclosures about the risks climate change poses to its business in a settlement of charges that it misled investors and the public. . . .
Peabody has agreed to file revised Securities and Exchange Commission disclosures affirming that "concerns about the environmental impacts of coal combustion ... could significantly affect demand for our products or our securities," said Schneiderman, who characterized the agreement as the first of its kind.
By the way, Schneiderman's next target is Exxon Mobil.