SOX Center

A shareholder activist has asked the Securities and Exchange Commission to open an enforcement investigation of Bear Stearns Cos. (BSC) for not promptly notifying him of its efforts to block a proposal he wants to put to a shareholder vote.

Conservative pundit Steven Milloy, who co-manages the Free Enterprise Action Fund, a Potomac, Md., mutual fund, sought to offer a “Sarbanes-Oxley Right-to-Know” resolution at Bear Stearns’ annual meeting this year. Milloy said he’s concerned the law may be harming U.S. investment-banking business and his resolution calls for Bear Stearns to report this fall on the impact of the 2002 law.

Bear Stearns sought to exclude the resolution and submitted a written “no-action” request to SEC staffers on Dec. 20 to that effect. Milloy said he didn’t receive the letter until asking for it Wednesday, even though the correspondence showed he’d been sent a copy.

Milloy said the 28-day delay violates U.S. laws requiring such letters be sent simultaneously to the SEC and to the shareholder making the proposal. He said an outside lawyer for Bear Stearns told him the bank is “looking into why it fell through the cracks.”

MarketWatch: Shareholder activist seeks SEC inquiry into Bear Stearns

Debate about whether the Sarbanes-Oxley Act is harming U.S. investment banking business could be on the agenda when Wall Street firms hold annual meetings in 2007.

Conservative pundit Steven Milloy, who co-manages the Free Enterprise Action Fund, a Potomac, Md.-based mutual fund, is pressing U.S. investment banks to provide more disclosure on the effects of the 2002 law, aimed at cleaning up corporate accounting. He’s asked Wall Street firms to offer a resolution requiring them to report to shareholders by next fall on what it costs them to comply with the Sarbanes-Oxley Act, or SOX, its benefits, and its impact on their investment banking business.

“Shareholders have a right to know how SOX impacts the Company so they can take appropriate action if warranted,” according to the petition for a “Sarbanes-Oxley Right-to-Know Report.” Milloy’s firm made the same request to Bear Stearns Cos. (BSC), Lehman Brothers Holdings Inc. (LEH), Merrill Lynch & Co. (MER) and Morgan Stanley (MS).

Market Watch: Wall Street firms asked to detail Sarbanes-Oxley’s impact