Securities and Exchange Commission Historical Society

In the Midst of Revolution: The SEC, 1973-1981

What the SEC Expects

A Mixed Success

- November 1977 SEC Advisory Committee on Corporate Disclosure

The SEC issued a March 1974 release that held that a conviction under the Federal Election Campaign Act required a corporate disclosure to shareholders. Stanley Sporkin argued that any illegal payment required full disclosure because it required falsification of the corporate books, and thus constituted a material event directly related to the integrity of the corporate board.(48)

As the scope of the corporate payments scandal under Congressional investigation expanded, the SEC's disclosure position appeared inadequate. SEC Chairman Roderick Hills advocated in his speeches and Congressional testimony that more control and regulation of corporate boards was needed. However, he would not recommend or support a new federal law establishing corporate board responsibilities.

In 1976, the SEC formally published its "Report on Questionable and Illegal Corporate Payments and Practices." The report recommended establishing new accounting record keeping and stricter management practices. While those limited recommendations were enacted by Congress in the 1977 Foreign Corrupt Practices Act, they failed to establish any formal rules that would ensure the independence and integrity of corporate board members.(49)

The 1976 election of President Carter, who ran against Washington corruption evidenced by the Watergate scandal, seemed to portend an opportunity for change. However, SEC Chairman Harold Williams failed to support proposals for national corporate governance legislation. Instead, he proposed that the SEC hold hearings to study the "rules relating to shareholder communication, shareholder participation in the corporate electoral process, and corporate governance generally." Near the end of his chairmanship, the SEC would issue its 1980 "Staff Report on Corporate Accountability."(50)

To be fair, the changes many sought may have raised questions as to whether the federal government or the states could lawfully regulate corporate board conduct. In addition, the U.S. Supreme Court, under the leadership of Justice Lewis Powell, reversed four decades of precedent which had allowed the SEC to use Rule 10b-5 to regulate the behavior of directors.

SEC Chairman Williams kept the issue of a federal role in corporate board governance alive in the face of strong countervailing forces that might have otherwise ended the discussion.(51) However, the outcome of the SEC response to the corporate payments scandal and other problems inherent in the lax standards for corporate board governance was limited reform between 1974 and 1981. Given the significant reform impetus surrounding the Watergate scandal, the SEC's response to corporate governance concerns left many advocates calling for more comprehensive changes.

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Related Museum Resources


July 7, 1975
transcript pdf (Arthur F. Burns Papers, Courtesy of the Gerald R. Ford Library)
March 25, 1976
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
August 23, 1976
image pdf (Roderick Hills Papers, Courtesy of the Gerald R. Ford Library)
January 22, 1980
document pdf (Courtesy of Theodore A. Levine)
January 30, 1980
document pdf (Courtesy of Theodore A. Levine)
February 12, 1980
document pdf (Courtesy of Theodore A. Levine)
March 1980
image pdf (Courtesy of the Library of Congress)
September 4, 1980
image pdf (Courtesy of the Library of Congress)
December 18, 1980
document pdf (Courtesy of David B.H. Martin, Jr.)


November 1977
Presentation of report from the SEC Advisory Committee on Corporate Disclosure
November 1977
(standing, left to right) Mary "Mickey" Beach, Philip A. Loomis, Jr., John R. Evans, Robert Karmel and Harold Williams; (seated) Alan Levenson, (unidentified), A.A. Sommer, Jr., (unidentified) and John "Sandy" Burton
May 2, 1978
David Ferber (seated - third from right); Paul Gonson (seated - third from left); Harvey Pitt (seated - fourth from right); Robert Pozen (seated - far right); Alan Rosenblat (seated - second from left); James Schropp (seated - far left); Jacob Stillman (seated - second from right); Michael Wolensky (standing - far right)
Late 1970s
John R. Evans (second from right); Richard H. Rowe (second from left); Harold M. Williams (center)
(Courtesy of Richard Rowe )
(Courtesy of Charles Leber )

Oral Histories

08 April 2009

Anne Flannery

15 February 2008

Edward F. Greene

Ed Greene served at the SEC from 1978 to 1982, first as director of the Division of Corporation Finance under Chairman Harold Williams, then as General Counsel under Chairman John Shad. He was involved in several ground-breaking projects. As director of Corporation Finance, he led efforts to integrate and improve disclosures around Initial Public Offerings (IPOs), and spearheaded efforts to create faster access to markets for shelf registrations. As general counsel, he negotiated the agency’s first Memorandum of Understanding (MOU), which became a template for future cooperative agreements between governments. Mr. Greene was a founding trustee of the SEC Historical Society.

02 June 2009

John Huber

14 January 2003

Alan Levenson

24 May 2004

Richard Rowe

  • - Part 1
  • - Part 2
  • - Part 3
  • edited transcript (pdf)
18 February 2009

Lee Spencer


17 April 2007

Fireside Chat - Courts and the SEC

Moderator: Theresa Gabaldon
Presenter(s): Paul Gonson, Mark Kreitman
21 March 2002

Roundtable on the Integration of the 1933 and 1934 Acts

Moderator: Richard Phillips, Richard Rowe
Presenter(s): Alan Beller, Edward Greene, John Huber, Brian Lane, Alan Levenson, David Martin, Linda Quinn, Richard Rowe


Fair To All People: The SEC and the Regulation of Insider Trading

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