COMMERCE COMMITTEE DEMOCRATS
Congressman John D. Dingell, Ranking Member

DINGELL RELEASES FINAL SEC Y2K RESPONSE

December 21, 1999

WASHINGTON -- Representative John D. Dingell (D-MI), Ranking Democrat on the House Committee on Commerce, today released a December 17, 1999 letter report from Securities and Exchange Commission (SEC) Chairman Arthur Levitt. The SEC report responds to Rep. Dingell’s request for additional information regarding Year 2000 preparations by broker-dealers and non-bank transfer agents and public company disclosures.

The key points are:

Broker-dealers. The SEC, NYSE, and NASD conducted coordinated examinations of the 38 largest broker-dealers. Problems were found, e.g., one firm lacked adequate documentation of its internal testing and another firm had conducted no integrated testing. The SEC reports that all problems have been resolved and all reviews have been successfully closed. Additionally, all self-regulatory organizations have confirmed that their members have successfully completed all SRO-mandated Y2K testing and have successfully resolved any issues that gave rise to heightened or special monitoring.

Non-bank Transfer Agents. The SEC has completed its reviews of non-bank transfer agents. SEC found poor internal controls and delays in contingency planning throughout its reviews. SEC says the problem firms have provided adequate assurances that these concerns were being addressed.

Disclosure. SEC confirms that it will consider enforcement action, including fines, cease and desist orders, or injunctions, against companies that fail to meet their Y2K disclosure obligations under the federal securities laws.

Copies of the two-page letter accompany this news release.

 (Contact: Dennis Fitzgibbons 202/225-3641)