Remarks Before the Investor Advisory Committee

Thank you for that introduction, Christopher. Good morning. It is great to join the Investor Advisory Committee (IAC) today. As is customary, I’d like to note that my views are my own, and I’m not speaking on behalf of the Commission or Securities and Exchange Commission staff.

I would like to welcome the new members of this Committee. The eight of you bring a wide-ranging set of experiences to this group, coming from government, academia, funds, non-profits, and the U.S. Navy. Thank you for volunteering your time and energy on behalf of investors.

Today’s meeting marks a year since I first had the opportunity to meet with this group. The work the IAC does matters, and my team and I follow your recommendations closely. Since January of last year, you have issued five recommendations: on Self-Directed Individual Retirement Accounts (IRAs), Special Purpose Acquisition Companies (SPACs), Rule 10b5-1 plans, Credit Rating Agencies, and Minority and Underserved Inclusion in Investment and Financial Services. I have asked the staff to review your recommendations and explore all of these areas. Indeed, the SEC has proposed rules on SPACs and 10b5-1 plans. I look forward to further recommendations from this committee.

Today’s meeting features panel discussions on the accounting of non-traditional financial information as well as climate-related disclosures. Disclosures have been at the heart of our securities laws since we were founded 88 years ago this week.

Our core bargain from the 1930s is that investors get to decide which risks to take, as long as public companies provide full and fair disclosure and are truthful in those disclosures. Over the generations, the SEC has stepped in whenever there has been a significant need for the disclosure of information relevant to investors’ decisions. As technology and markets evolve, and with them the types of information relevant for investors’ decisions, this agency often has updated our disclosure regimes in kind.

We did that in 1960s when we added disclosure about risk factors. We did that in the 1970s when we first added environmental-related disclosures, which the Commission has elaborated upon over the decades. Recently, in the latest stage of this long tradition of disclosures, we put out a proposal concerning climate-related disclosures.

This is a conversation that investors and issuers are having right now. Today, hundreds of issuers are disclosing climate-related information, and investors representing tens of trillions of dollars are making decisions based on that information.[1] Companies, however, are disclosing different information, in different places, and at different times. This proposal would help investors receive consistent, comparable, and decision-useful information, and would provide issuers with clear and consistent reporting obligations.[2]

You’ve also got a panel with regard to non-traditional financial information. This is an important conversation as we continue to evaluate types of information relevant to investors’ decisions. Whether the information in question is traditional financial statement information, like components in an income statement, balance sheet, or cash flow statement, or non-traditional information, like expenditures related to human capital or cybersecurity, it’s important that issuers disclose material information and that disclosures are accurate, not misleading, consistently applied, and tied to traditional financial information. Thus, I’m looking forward to hearing your discussion.

I also look forward to today’s discussions on two potential recommendations to protect older investors and take steps to fund law school clinics.

Victims of fraud, too often, are older adults: Some have retired, others have neared it, but all have spent decades preparing their nest eggs. Today, the FBI estimates that older adults lose nearly $3 billion per year to financial scams.[3] That’s why the work you are doing on recommendations to better protect older Americans is so important.[4] So too is your work on a tool that investors of all stripes may use, including older Americans: investor advocacy clinics.

These clinics provide an essential service. In the spring, I had the opportunity to speak to the SEC Investor Advocacy Summit, featuring presentations from students assisting at law school clinics around the country.[5] Thank you to the four law school professors on this Committee for the work you do to educate and guide students. These clinics fill a vital role to provide a free, quality resource to investors and important training for budding lawyers. I look forward to the Committee’s discussion about a potential new pathway for the SEC to fund these clinics.

Before I leave you, I want to give my thanks to a special member of today’s audience, our Investor Advocate and a member of the IAC, Rick Fleming. Rick will move on to his next chapter at the end of this month, after eight years of service to the SEC as the first director of the Office of the Investor Advocate. The office has helped the agency meet investors where they are, advocate for their needs, and strive to build a marketplace worthy of their trust. Thank you, Rick, for all that you have done.

My thanks to all of you on the Committee, and I look forward to hearing more about today’s meeting.