Statement By SEC Chairman Arthur Levitt Concerning NASD Board Decision

Chairman Arthur Levitt today made the following statement concerning an NASD Board decision: The NASD Board’s decision today to support greater disclosure of conflicts of interest by analysts who make stock recommendations in print or on television is an important and commendable step. The Commission looks forward to developing rules with the NASD and the New York Stock Exchange in short order that will establish a fair and workable disclosure regime that promotes public confidence.

Knowing whether an analyst’s employer underwrote a recommended stock or whether his or her firm has a significant position in a recommended stock is important information. Investors deserve to know what possible incentives an investment services professional may have in making a particular recommendation. This can only improve the credibility of those who make recommendations to the public – credibility that has come under attack in recent months.