International Organization for Standardization

Source: Wikipedia

International Organization for Standardization Organisation internationale de normalisation Международная организация по стандартизации [1]
English language logo of the ISO
List of members
Formation	23 February 1947
Type	NGO
Purpose/focus	International standardization
Headquarters	Geneva, Switzerland
Membership	163 members[2]
Official languages	English, French and Russian
Website	www.iso.org

The International Organization for Standardization (French: Organisation internationale de normalisation, Russian: Международная организация по стандартизации, tr. Mezhdunarodnaya organizaciya po standartizacii),^[1] widely known as ISO, is an international standard-setting body composed of representatives from various national standards organizations. Founded on February 23, 1947, the organization promulgates worldwide proprietary industrial and commercial standards. It has its headquarters in Geneva, Switzerland.^[3] While ISO defines itself as a non-governmental organization, its ability to set standards that often become law, either through treaties or national standards, makes it more powerful than most non-governmental organizations. In practice, ISO acts as a consortium with strong links to governments.

Name and abbreviation

The organization's logos in two of its official languages, English and French, include the word ISO, and it is usually referred to by this short-form name. ISO asserts that ISO is not an acronym or initialism for the organization's full name in either official language; rather, the organization adopted ISO based on the Greek word isos (ἴσος), meaning equal -- recognizing that the organization’s initials would be different in different languages, the organization's founders chose ISO as the universal short form of its name.^[4] However, one of the founding delegates, Willy Kuert, recollected the original naming question with the comment "I recently read that the name ISO was chosen because 'iso' is a Greek term meaning 'equal'. There was no mention of that in London!"^[5]

History

The organization which today is known as ISO began in 1926 as the International Federation of the National Standardizing Associations (ISA). This organization focused heavily on mechanical engineering. It was disbanded in 1942 during the second World War but was re-organized under the current name, ISO, in 1946.
ISO is a voluntary organization whose members are recognized standard authorities, each one representing one country. The bulk of the work of ISO is done by the 2700 technical committees, subcommittees and working groups. Each committee and subcommittee is headed by a Secretariat from one of the member organizations.

[edit] International Standards and other publications

See also: List of International Organization for Standardization standards

ISO's main products are the International Standards. ISO also publishes Technical Reports, Technical Specifications, Publicly Available Specifications, Technical Corrigenda, and Guides.^[6][7]
International Standards are identified in the format ISO[/IEC][/ASTM] [IS] nnnnn[:yyyy] Title, where nnnnn is the number of the standard, yyyy is the year published, and Title describes the subject. IEC for International Electrotechnical Commission is included if the standard results from the work of ISO/IEC JTC1 (the ISO/IEC Joint Technical Committee). ASTM (American Society for Testing and Materials) is used for standards developed in cooperation with ASTM International. The date and IS are not used for an incomplete or unpublished standard, and may under some circumstances be left off the title of a published work.
Technical Reports are issued when "a technical committee or subcommittee has collected data of a different kind from that which is normally published as an International Standard".^[6] such as references and explanations. The naming conventions for these are the same as for standards, except TR prepended instead of IS in the report's name. Examples:

• ISO/IEC TR 17799:2000 Code of Practice for Information Security Management
• ISO/TR 19033:2000 Technical product documentation — Metadata for construction documentation

Technical Specifications can be produced when "the subject in question is still under development or where for any other reason there is the future but not immediate possibility of an agreement to publish an International Standard". Publicly Available Specifications may be "an intermediate specification, published prior to the development of a full International Standard, or, in IEC may be a 'dual logo' publication published in collaboration with an external organization".^[6] Both are named by convention similar to Technical Reports, for example:

• ISO/TS 16952-1:2006 Technical product documentation — Reference designation system — Part 1: General application rules
• ISO/PAS 11154:2006 Road vehicles — Roof load carriers

ISO sometimes issues a Technical Corrigendum. These are amendments to existing standards because of minor technical flaws, usability improvements, or to extend applicability in a limited way. Generally, these are issued with the expectation that the affected standard will be updated or withdrawn at its next scheduled review.^[6]
ISO Guides are meta-standards covering "matters related to international standardization".^[6] They are named in the format "ISO[/IEC] Guide N:yyyy: Title", for example:

• ISO/IEC Guide 2:2004 Standardization and related activities — General vocabulary
• ISO/IEC Guide 65:1996 General requirements for bodies operating product certification

Standardization process

A standard published by ISO/IEC is the last stage of a long process that commonly starts with the proposal of new work within a committee. Here are some abbreviations used for marking a standard with its status:^{[8][9][10][11][12][13][14]}

• PWI - Preliminary Work Item
• NP or NWIP - New Proposal / New Work Item Proposal (e.g., ISO/IEC NP 23007)
• AWI - Approved new Work Item (e.g., ISO/IEC AWI 15444-14)
• WD - Working Draft (e.g., ISO/IEC WD 27032)
• CD - Committee Draft (e.g., ISO/IEC CD 23000-5)
• FCD - Final Committee Draft (e.g., ISO/IEC FCD 23000-12)
• DIS - Draft International Standard (e.g., ISO/IEC DIS 14297)
• FDIS - Final Draft International Standard (e.g., ISO/IEC FDIS 27003)
• PRF - Proof of a new International Standard (e.g., ISO/IEC PRF 18018)
• IS - International Standard (e.g., ISO/IEC 13818-1:2007)

Abbreviations used for amendments:^{[8][9][10][11][12][13][14][15]}

• NP Amd - New Proposal Amendment (e.g., ISO/IEC 15444-2:2004/NP Amd 3)
• AWI Amd - Approved new Work Item Amendment (e.g., ISO/IEC 14492:2001/AWI Amd 4)
• WD Amd - Working Draft Amendment (e.g., ISO 11092:1993/WD Amd 1)
• CD Amd / PDAmd - Committee Draft Amendment / Proposed Draft Amendment (e.g., ISO/IEC 13818-1:2007/CD Amd 6)
• FPDAmd / DAM (DAmd) - Final Proposed Draft Amendment / Draft Amendment (e.g., ISO/IEC 14496-14:2003/FPDAmd 1)
• FDAM (FDAmd) - Final Draft Amendment (e.g., ISO/IEC 13818-1:2007/FDAmd 4)
• PRF Amd - (e.g., ISO 12639:2004/PRF Amd 1)
• Amd - Amendment (e.g., ISO/IEC 13818-1:2007/Amd 1:2007

Other abbreviations:^{[12][13][15][16]}

• TR - Technical Report (e.g., ISO/IEC TR 19791:2006)
• DTR - Draft Technical Report (e.g., ISO/IEC DTR 19791)
• TS - Technical Specification (e.g., ISO/TS 16949:2009)
• DTS - Draft Technical Specification (e.g., ISO/DTS 11602-1)
• PAS - Publicly Available Specification
• TTA - Technology Trends Assessment (e.g., ISO/TTA 1:1994)
• IWA - International Workshop Agreement (e.g., IWA 1:2005)
• Cor - Technical Corrigendum (e.g., ISO/IEC 13818-1:2007/Cor 1:2008)
• Guide - a guidance to technical committees for the preparation of standards

International Standards are developed by ISO technical committees (TC) and subcommittees (SC) by a process with six steps:^[10][17]

• Stage 1: Proposal stage
• Stage 2: Preparatory stage
• Stage 3: Committee stage
• Stage 4: Enquiry stage
• Stage 5: Approval stage
• Stage 6: Publication stage

The TC/SC may set up working groups (WG) of experts for the preparation of a Working Drafts. Subcommittees may have several working groups, which can have several Sub Groups (SG).^[18]

Stages in the development process of an ISO standard^{[9][10][11][14][15][17]}

Stage code	Stage	Associated document name	Abbreviations	Description
00	Preliminary stage	Preliminary work item	PWI
10	Proposal stage	New work item proposal	NP or NWIP, NP Amd/TR/TS/IWA
20	Preparatory stage	Working draft(s)	AWI, AWI Amd/TR/TS, WD, WD Amd/TR/TS
30	Committee stage	Committee draft(s)	CD, CD Amd/Cor/TR/TS, PDAmd (PDAM), PDTR, PDTS
40	Enquiry stage	Enquiry draft	DIS, FCD, FPDAmd, DAmd (DAM), FPDISP, DTR, DTS	(CDV in IEC)
50	Approval stage	Final draft International Standard	FDIS, FDAmd (FDAM), PRF, PRF Amd/TTA/TR/TS/Suppl, FDTR
60	Publication stage	International Standard	ISO TR, TS, IWA, Amd, Cor
90	Review stage		ISO TR, TS, IWA, Amd, Cor
95	Withdrawal stage

It is possible to omit certain stages, if there is a document with a certain degree of maturity at the start of a standardization project - for example a standard developed by another organization. ISO/IEC Directives allow also the so-called "Fast-track procedure". In this procedure a document is submitted directly for approval as a draft International Standard (DIS) to the ISO member bodies or as a final draft International Standard (FDIS) if the document was developed by an international standardizing body recognized by the ISO Council.^[10]
The first step - a proposal of work (New Proposal) is approved at the relevant subcommittee or technical committee (e.g., SC29 and JTC1 respectively in the case of Moving Picture Experts Group - ISO/IEC JTC1/SC29/WG11). A working group (WG) of experts is set up by the TC/SC for the preparation of a Working Draft. When the scope of a new work is sufficiently clarified, some of the working groups (e.g., MPEG) usually make open request for proposals - known as "Call for proposals". The first document that is produced for example for audio and video coding standards is called a Verification Model (VM) (previously also called a Simulation and Test Model). When a sufficient confidence in the stability of the standard under development is reached, a Working Draft (WD) is produced. This is in the form of a standard but is kept internal to working group for revision. When a Working Draft is sufficiently solid and the working group is satisfied that it has developed the best technical solution to the problem being addressed, it becomes Committee Draft (CD). If it is required, it is then sent to the P-members of the TC/SC (National Bodies) for ballot.
The CD becomes Final Committee Draft (FCD) if the number of positive votes is above the quorum. Successive committee drafts may be considered until consensus is reached on the technical content. When it is reached, the text is finalized for submission as a draft International Standard (DIS). The text is then submitted to National Bodies for voting and comment within a period of five months. It is approved for submission as a final draft International Standard (FDIS) if a two-thirds majority of the P-members of the TC/SC are in favour and not more than one-quarter of the total number of votes cast are negative. ISO will then hold a ballot with National Bodies where no technical changes are allowed (yes/no ballot), within a period of two months. It is approved as an International Standard (IS) if a two-thirds majority of the P-members of the TC/SC is in favour and not more than one-quarter of the total number of votes cast are negative. After approval, only minor editorial changes are introduced into the final text. The final text is sent to the ISO Central Secretariat which publishes it as the International Standard.^[8][10]

ISO document copyright

ISO documents are copyrighted and ISO charges for copies of most. ISO does not, however, charge for most draft copies of documents in electronic format. Although useful, care must be taken using these drafts as there is the possibility of substantial change before it becomes finalized as a standard. Some standards by ISO and its official U.S. representative (and the International Electrotechnical Commission's via the U.S. National Committee) are made freely available.^[19][20]

[edit] Members

A map of standards bodies who are ISO members

Key:

  members

  correspondent members

  subscriber members

  other places with an ISO 3166-1 code who aren't members of ISO

ISO has 163 national members,^[21] out of the 203 total countries in the world.
ISO has three membership categories:

• Member bodies are national bodies that are considered to be the most representative standards body in each country. These are the only members of ISO that have voting rights.
• Correspondent members are countries that do not have their own standards organization. These members are informed about ISO's work, but do not participate in standards promulgation.
• Subscriber members are countries with small economies. They pay reduced membership fees, but can follow the development of standards.

Participating members are called "P" members as opposed to observing members which are called "O" members.

Products named after ISO

The fact that many of the ISO-created standards are ubiquitous has led, on occasion, to common use of "ISO" to describe the actual product that conforms to a standard. Some examples of this are:

• CD images end in the file extension "ISO" to signify that they are using the ISO 9660 standard filesystem as opposed to another file system - hence CD images are commonly referred to as "ISOs". Virtually all computers with CD-ROM drives can read CDs that use this standard. Some DVD-ROMs also use ISO 9660 filesystems.
• Photographic film's sensitivity to light, its "film speed", is described by ISO 5800:1987. Hence, the film's speed is often referred to as its "ISO number."

ISO/IEC Joint Technical Committee 1

Main article: ISO/IEC JTC1

To deal with the consequences of substantial overlap in areas of standardization and work related to information technology, ISO and IEC formed a Joint Technical Committee known as the ISO/IEC JTC1. It was the first such joint committee. The second joint committee was created in 2009 - Joint Project Committee - Energy efficiency and renewable energy sources - Common terminology (ISO/IEC/JTC 2).^[22]

IWA document

Like ISO/TS, International Workshop Agreement (IWA) is another armory of ISO for providing rapid response to requirements for standardization in areas where the technical structures and expertise are not currently in place. The utility harmonizes technical urgency industrial wide..

Criticism

With the exception of a small number of isolated standards,^[23] ISO standards are normally not available free of charge, but for a purchase fee,^[24] which has been seen by some as too expensive for small open source projects.^[25]
The ISO/IEC JTC1 fast-track procedures ("Fast-track" as used by OOXML and "PAS" as used by OpenDocument) have garnered criticism in relation to the standardization of Office Open XML (ISO/IEC 29500). Martin Bryan, outgoing Convenor of ISO/IEC JTC1/SC34 WG1, is quoted as saying:

I would recommend my successor that it is perhaps time to pass WG1’s outstanding standards over to OASIS, where they can get approval in less than a year and then do a PAS submission to ISO, which will get a lot more attention and be approved much faster than standards currently can be within WG1.

The disparity of rules for PAS, Fast-Track and ISO committee generated standards is fast making ISO a laughing stock in IT circles. The days of open standards development are fast disappearing. Instead we are getting 'standardization by corporation'.^[26]

Computer security entrepreneur and Ubuntu investor, Mark Shuttleworth, commented on the Standardization of Office Open XML process by saying

I think it de-values the confidence people have in the standards setting process,

and Shuttleworth alleged that ISO did not carry out its responsibility. He also noted that Microsoft had intensely lobbied many countries that traditionally had not participated in ISO and stacked technical committees with Microsoft employees, solution providers and resellers sympathetic to Office Open XML.

When you have a process built on trust and when that trust is abused, ISO should halt the process ... ISO is an engineering old boys club and these things are boring so you have to have a lot of passion … then suddenly you have an investment of a lot of money and lobbying and you get artificial results. The process is not set up to deal with intensive corporate lobbying and so you end up with something being a standard that is not clear.^[27]

Notes and references

1. ^ ^{a b} The 3 official full names of ISO can be found at the beginning of the foreword sections of the PDF document: ISO/IEC Guide 2:2004 Standardization and related activities — General vocabulary
2. ^ http://www.iso.org/iso/about.htm
3. ^ "About ISO". ISO. 2010. http://www.iso.org/iso/about.htm. Retrieved 2010-11-07. 
4. ^ "ISO - Discover ISO: ISO's name". ISO. 2010. http://www.iso.org/iso/about/discover-iso_isos-name.htm. Retrieved 2010-11-07. 
5. ^ Willy Kuert (1997). "The Founding of ISO (excerpt of Friendship Among Equals)". ISO. http://www.iso.org/iso/founding.pdf. Retrieved 2011-02-11. 
6. ^ ^{a b c d e} The ISO directives are published in two distinct parts:
   * "ISO Directives, Part 2: Rules for the structure and drafting of International Standards. 5th Edition" (pdf). ISO/IEC. 2004. Archived from the original on 10 July 2007. http://web.archive.org/web/20070710135001/http://www.iec.ch/tiss/iec/Directives-Part1-Ed5.pdf. Retrieved 7 September 2007. 
7. ^ ISO. "ISO/IEC Directives and ISO supplement". http://www.iso.org/directives. Retrieved 1 January 2010. 
8. ^ ^{a b c} "About MPEG". chiariglione.org. http://mpeg.chiariglione.org/about_mpeg.htm. Retrieved 13 December 2009. 
9. ^ ^{a b c} ISO. "International harmonized stage codes". http://www.iso.org/iso/standards_development/processes_and_procedures/stages_description/stages_table.htm#s90. Retrieved 31 December 2009. 
10. ^ ^{a b c d e f} ISO. "Stages of the development of International Standards". http://www.iso.org/iso/standards_development/processes_and_procedures/stages_description.htm. Retrieved 31 December 2009. 
11. ^ ^{a b c} "The ISO27k FAQ - ISO/IEC acronyms and committees". IsecT Ltd.. http://www.iso27001security.com/html/faq.html#Acronyms. Retrieved 31 December 2009. 
12. ^ ^{a b c} ISO (2007). "ISO/IEC Directives Supplement — Procedures specific to ISO" (PDF). http://www.astm.org/COMMIT/1st_Supplement.pdf. Retrieved 31 December 2009. 
13. ^ ^{a b c} ISO (2007). "List of abbreviations used throughout ISO Online". http://www.iso.org/iso/support/faqs/faqs_list_abbreviations.htm. Retrieved 31 December 2009. 
14. ^ ^{a b c} "US TAG COMMITTEE HANDBOOK" (DOC). 2008-03. http://www.sae.org/exdomains/standardsdev/global_resources/US%20TAG%20Committe%20Handbook%206March2008.doc. Retrieved 1 January 2010. 
15. ^ ^{a b c} ISO/IEC JTC1 (2 November 2009), Letter Ballot on the JTC 1 Standing Document on Technical Specifications and Technical Reports, http://isotc.iso.org/livelink/livelink/JTC001-N-9876.pdf?func=doc.Fetch&nodeId=8498789&docTitle=JTC001-N-9876, retrieved 1 January 2010 
16. ^ ISO. "ISO deliverables". http://www.iso.org/iso/standards_development/processes_and_procedures/deliverables.htm. Retrieved 9 April 2010. 
17. ^ ^{a b} ISO (2008) (PDF), ISO/IEC Directives, Part 1 - Procedures for the technical work, Sixth edition, 2008, http://www.iec.ch/tiss/iec/Directives-Part1-Ed6.pdf, retrieved 1 January 2010 
18. ^ ISO, IEC (5 November 2009). "ISO/IEC JTC 1/SC 29, SC 29/WG 11 Structure (ISO/IEC JTC 1/SC 29/WG 11 - Coding of Moving Pictures and Audio)". http://www.itscj.ipsj.or.jp/sc29/29w12911.htm. Retrieved 7 November 2009. 
19. ^ "Freely Available ISO Standards". ISO. Last updated 2007-08-08. http://isotc.iso.org/livelink/livelink/fetch/2000/2489/Ittf_Home/PubliclyAvailableStandards.htm. Retrieved 7 September 2007. 
20. ^ "Free ANSI Standards". Archived from the original on 3 April 2007. http://web.archive.org/web/20070403014457/http://webstore.ansi.org/ansidocstore/free_standards.asp. Retrieved 19 June 2007. 
21. ^ "General information on ISO". ISO. © 2009. http://www.iso.org/iso/support/faqs/faqs_general_information_on_iso.htm. Retrieved 29 January 2009. 
22. ^ "ISO/IEC/JTC 2 - Joint Project Committee - Energy efficiency and renewable energy sources - Common terminology". http://www.iso.org/iso/standards_development/technical_committees/list_of_iso_technical_committees/iso_technical_committee.htm?commid=585141. Retrieved 1 January 2010. 
23. ^ "Freely Available Standards". ISO. http://standards.iso.org/ittf/PubliclyAvailableStandards/index.html. Retrieved 26 April 2008. 
24. ^ "Shopping FAQs". ISO. http://www.iso.org/iso/store/shopping_faqs.htm. Retrieved 26 April 2008. 
25. ^ Jelliffe, Rick (1 August 2007). "Where to get ISO Standards on the Internet free". oreillynet.com. http://www.oreillynet.com/xml/blog/2007/08/where_to_get_iso_standards_on.html. Retrieved 26 April 2008. "The lack of free online availability has effectively made ISO standard irrelevant to the (home/hacker section of the) Open Source community" 
26. ^ "Report on WG1 activity for December 2007 Meeting of ISO/IEC JTC1/SC34/WG1 in Kyoto". iso/jtc1 sc34. 29 November 2007. http://www.jtc1sc34.org/repository/0940.htm. 
27. ^ "Ubuntu’s Shuttleworth blames ISO for OOXML’s win". ZDNet.com. 1 April 2008. http://blogs.zdnet.com/open-source/?p=2222. 

See also

American National Standards Institute (ANSI) Deutsches Institut für Normung, German Institute for Standardization (DIN) British Standards Institution (BSI) Countries in International Organization for Standardization Canadian Standards Association European Committee for Standardization (CEN) Commonwealth of Independent States (CIS) set of standards (GOST) International Classification for Standards International Electrotechnical Commission (IEC) and ISO/IEC standards International healthcare accreditation International Telecommunication Union (ITU) ISO A4 ISO country code List of International Organization for Standardization standards

ISO divisions ISO/TC 37 ISO/TC 68 TC 46/SC 9 ISO/TC 211 ISO/TC 215 ISO/TC 223 Standardization Standards Australia Standards organization Terminology planning policy The International Customer Service Institute (TICSI) CARICOM Regional Organization for Standards and Quality (CROSQ) AP Stylebook (Associated Press Style) Interface 2010 (Interface Marketing Supplier Integration Institute)

U.S. Securities and Exchange Commission

Source: Wikipedia

U.S. Securities and Exchange Commission
SEC
Agency overview
Formed	June 6, 1934
Jurisdiction	Federal government of the United States
Headquarters	Washington, D.C.
Employees	3,748 (2010) [1]
Agency executive	Mary Schapiro, Chairman
Website
www.sec.gov

The U.S. Securities and Exchange Commission (frequently abbreviated SEC) is a federal agency^[2] which holds primary responsibility for enforcing the federal securities laws and regulating the securities industry, the nation's stock and options exchanges, and other electronic securities markets in the United States. In addition to the 1934 Act that created it, the SEC enforces the Securities Act of 1933, the Trust Indenture Act of 1939, the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Sarbanes-Oxley Act of 2002 and other statutes. The SEC was created by section 4 of the Securities Exchange Act of 1934 (now codified as 15 U.S.C. § 78d and commonly referred to as the 1934 Act).

Commission members

The Securities and Exchange Commission has five Commissioners who are appointed by the President of the United States with the advice and consent of the Senate. No more than three can be from a single political party. Each commissioner serves a five-year term, which are staggered so that one commissioner's term ends on June 5 of each year. Currently the SEC commissioners are chairman Mary L. Schapiro (D), Kathleen L. Casey (R), Elisse B. Walter (D), Luis A. Aguilar (D) and Troy A. Paredes (R).^[3]

Overview

The SEC was established by the United States Congress in 1934 as an independent, quasi-judicial regulatory agency during the Great Depression that followed the Crash of 1929. The main reason for the creation of the SEC was to regulate the stock market and prevent corporate abuses relating to the offering and sale of securities and corporate reporting. The SEC was given the power to license and regulate stock exchanges, the companies whose securities traded on them, and the brokers and dealers who conducted the trading.
Currently, the SEC is responsible for administering seven major laws that govern the securities industry. They are: the Securities Act of 1933, the Securities Exchange Act of 1934, the Trust Indenture Act of 1939, the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Sarbanes-Oxley Act of 2002 and most recently, the Credit Rating Agency Reform Act of 2006.
The enforcement authority given by Congress allows the SEC to bring civil enforcement actions against individuals or companies alleged to have committed accounting fraud, provided false information, or engaged in insider trading or other violations of the securities law. The SEC also works with criminal law enforcement agencies to prosecute individuals and companies alike for offenses which include a criminal violation.
To achieve its mandate, the SEC enforces the statutory requirement that public companies submit quarterly and annual reports, as well as other periodic reports. In addition to annual financial reports, company executives must provide a narrative account, called the "management discussion and analysis" (MD&A), that outlines the previous year of operations and explains how the company fared in that time period. Management will usually also touch on the upcoming year, outlining future goals and approaches to new projects. In an attempt to level the playing field for all investors, the SEC maintains an online database called EDGAR (the Electronic Data Gathering, Analysis, and Retrieval system) online from which investors can access this and other information filed with the agency.
Quarterly and annual reports from public companies are crucial for investors to make sound decisions when investing in the capital markets. Unlike banking, investment in the capital markets is not guaranteed by the federal government. The potential for big gains needs to be weighed against equally likely losses. Mandatory disclosure of financial and other information about the issuer and the security itself gives private individuals as well as large institutions the same basic facts about the public companies they invest in, thereby increasing public scrutiny while reducing insider trading and fraud.
The SEC makes reports available to the public via the EDGAR system. SEC also offers publications on investment-related topics for public education. The same online system also takes tips and complaints from investors to help the SEC track down violators of the securities laws. SEC policy is to never comment on the existence or status of an ongoing investigation.

History

Prior to the enactment of the federal securities laws and the creation of the SEC, there existed so-called Blue Sky Laws that were enacted and enforced at the state level and regulated the offering and sale of securities to protect the public from fraud. Though the specific provisions of these laws varied among states, they all required the registration of all securities offerings and sales, as well as of stock brokers and brokerage firms.^[4]
However, these Blue Sky laws were generally found to be ineffective. For example, the Investment Bankers Association told its members as early as 1915 that they could "ignore" Blue Sky Laws by making securities offerings across state lines through the mail.^[5] After holding hearings on abuses on interstate frauds (commonly known as the Pecora Commission), Congress passed the Securities Act of 1933 (15 U.S.C. § 77a) which regulates interstate sales of securities (original issues) at the federal level. The subsequent Securities Exchange Act of 1934 (15 U.S.C. § 78d) regulates sales of securities in the secondary market. Section 4 of the 1934 Act created the U.S. Securities and Exchange Commission to enforce the federal securities laws. Both laws are considered part of Franklin Roosevelt's "New Deal" raft of legislation.
The Securities Act of 1933 is also known as the "Truth in Securities Act" or the "Federal Securities Act” or just the "1933 Act." Its goal is to increase public trust in the capital markets by requiring uniform disclosure of information about public securities offerings. The primary drafters of 1933 Act were Huston Thompson, a former Federal Trade Commission chairman, and Walter Miller and Ollie Butler, two attorneys in the Commerce Department's Foreign Service Division, with input from Supreme Court Justice Louis Brandeis. For the first year of the law's enactment, the enforcement of the statute rested with the Federal Trade Commission, but this power was transferred to the SEC following its creation in 1934. (Interestingly, the first, rejected draft of the Securities Act written by Samuel Untermyer vested these powers in the U.S. Post Office, because Untermyer believed that only by vesting enforcement powers with the postal service could the constitutionality of the act be assured.^[5]) The law requires that issuing companies register distributions of securities with the SEC prior to interstate sales of these securities, so that investors may have access to basic financial information about issuing companies and risks involved in investing in the securities in question. Since 1996, most registration statements (and associated materials) filed with the SEC can be accessed via the SEC’s online system, EDGAR.^[6]
The Securities Exchange Act of 1934 is also known as "the Exchange Act" or "the 1934 Act". This act regulates secondary trading between individuals and companies which are often unrelated to the original issuers of securities. Entities under the SEC’s authority include securities exchanges with physical trading floors such as the New York Stock Exchange (NYSE), self-regulatory organizations such as the National Association of Securities Dealers (NASD), the Municipal Securities Rulemaking Board (MSRB), online trading platforms such as NASDAQ and ATS, and any other persons (e.g., securities brokers) engaged in transactions for the accounts of others.^[7]
President Franklin D. Roosevelt appointed Joseph P. Kennedy, Sr., father of President John F. Kennedy, to serve as the first Chairman of the SEC, along with James M. Landis (one of the architects of the 1934 Act and other New Deal legislation) and Ferdinand Pecora (Chief Counsel to the United States Senate Committee on Banking and Currency during its investigation of Wall Street banking and stock brokerage practices). Other prominent SEC commissioners and chairmen include William O. Douglas (who went on to be a U.S. Supreme Court justice), Jerome Frank (one of the leaders of the legal realism movement) and William J. Casey (who would later head the Central Intelligence Agency under President Ronald Reagan).
As part of the continuing investigation in 1974–75, Watergate scandal prosecutors offered companies that had given illegal campaign contributions to Richard Nixon's re-election campaign lenient sentences if they came forward.^[8] Many companies complied, including Northrop Grumman, 3M, American Airlines and Braniff International Airways.^[8] By 1976, prosecutors had convicted 18 American corporations of contributing illegally to Nixon's campaign.^[8] The SEC, in a state of flux after its chairman was forced to resign his post,^[8] began to audit all the political activities of publicly traded companies. The SEC's subsequent investigation found that many American companies were making vast political contributions abroad.^[8]

Chairs and commissioners

Main article: Securities and Exchange Commission appointees

Members are listed in main article by Presidential administration.
Or for alphabetized list of members who have articles written about them, see Category:Members of the United States Securities and Exchange Commission.

Organizational structure

U.S. Securities and Exchange Commission headquarters in Washington, D.C.

The SEC consists of five Commissioners appointed by the President of the United States with the advice and consent of the United States Senate. Their terms last five years and are staggered so that one Commissioner's term ends on June 5 of each year. To ensure that the SEC remains non-partisan, no more than three Commissioners may belong to the same political party. The President also designates one of the Commissioners as Chairman, the SEC's top executive. However, the President does not possess the power to fire the appointed commissioners, a provision that was made to ensure the independence of the SEC. This issue arose during the 2008 Presidential Election in connection with the ensuing Financial Crises.
Within the SEC, there are five divisions. Headquartered in Washington, D.C., the SEC has 11 regional offices throughout the United States.
The SEC's five main divisions are: Corporation Finance, Trading and Markets, Investment Management, Enforcement, and Risk, Strategy, and Financial Innovation.^[9]
Corporation Finance is the division that oversees the disclosure made by public companies as well as the registration of transactions, such as mergers, made by companies. The division is also responsible for operating EDGAR.
The Trading and Markets division oversees self-regulatory organizations (SROs) such as FINRA and MSRB, and all broker-dealer firms and investment houses. This division also interprets proposed changes to regulations and monitors operations of the industry. In practice, the SEC delegates most of its enforcement and rulemaking authority to FINRA. In fact, all trading firms not regulated by other SROs must register as a member of FINRA. Individuals trading securities must pass exams administered by FINRA to become registered representatives.^[10][11]
The Investment Management Division oversees investment companies including mutual funds and investment advisors. This division administers federal securities laws, in particular the Investment Company Act of 1940 and Investment Advisers Act of 1940. This Division's responsibilities include:^[12]

• assisting the Commission in interpreting laws and regulations for the public and SEC inspection and enforcement staff;
• responding to no-action requests and requests for exemptive relief;
• reviewing investment company and investment adviser filings;
• assisting the Commission in enforcement matters involving investment companies and advisers; and
• advising the Commission on adapting SEC rules to new circumstances.

The Enforcement Division works with the other three divisions, and other Commission offices, to investigate violations of the securities laws and regulations and to bring actions against alleged violators. The SEC generally conducts investigations in private. The SEC's staff may seek voluntary production of documents and testimony, or may seek a formal order of investigation from the SEC, which allows the staff to compel the production of documents and witness testimony. The SEC can bring a civil action in a U.S. District Court or an administrative proceeding which is heard by an independent administrative law judge (ALJ). The SEC does not have criminal authority, but may refer matters to state and federal prosecutors. The current director of the SEC's Enforcement Division is Robert Khuzami, a former federal prosecutor.
Among the SEC's offices are:

• The Office of General Counsel, which acts as the agency's "lawyer" before federal appellate courts and provides legal advice to the Commission and other SEC divisions and offices;
• The Office of the Chief Accountant, which establishes and enforces accounting and auditing policies set by the SEC. This office has played an important role in such areas as working with the Financial Accounting Standards Board to develop Generally Accepted Accounting Principles, the Public Company Accounting Oversight Board in developing audit requirements, and the International Accounting Standards Board in advancing the development of International Financial Reporting Standards;
• The Office of Compliance, Inspections and Examinations, which inspects broker-dealers, stock exchanges, credit rating agencies, registered investment companies, including both closed-end and open-end (mutual funds) investment companies, money funds and Registered Investment Advisors;
• The Office of International Affairs, which represents the SEC abroad and which negotiates international enforcement information-sharing agreements, develops the SEC's international regulatory policies in areas such as mutual recognition, and helps develop international regulatory standards through organizations such as the International Organization of Securities Commissions and the Financial Stability Forum;
• The Office of Investor Education and Advocacy, which helps educate the public about securities markets and warns investors of fraud and stock market scams; and
• The Office of Economic Analysis, which helps the SEC estimate the economic costs and benefits of its various rules and regulations.
• The Office of Information Technology, supports the Commission and staff of the SEC in all aspects of information technology. The Office has overall management responsibility for the Commission's IT program including application development, infrastructure operations and engineering, user support, IT program management, capital planning, security, and enterprise architecture.

Relationship to other agencies

In addition to working with various SROs such as NYSE and NASD, the Securities and Exchange Commission also works with other federal agencies, state securities regulators, international securities agencies and law enforcement agencies.^[13]
In 1988 Executive Order 12631 established the President's Working Group on Financial Markets. The Working Group is chaired by the Secretary of the Treasury and includes the Chairman of the SEC, the Chairman of the Federal Reserve and the Chairman of the Commodity Futures Trading Commission. The goal of the Working Group is to enhance the integrity, efficiency, orderliness and competitiveness of the financial markets while maintaining investor confidence.^[14]
The Securities Act of 1933 was originally administered by the Federal Trade Commission (FTC). The Securities Exchange Act of 1934 transferred this responsibility from FTC to the SEC. The main mission of the FTC is to promote consumer protection and to eradicate anticompetitive business practices. The FTC regulates general business practices, while the SEC focuses on the securities markets.
The Temporary National Economic Committee was established by joint resolution of Congress 52 Stat. 705 on June 16, 1938. It was in charge of reporting to the Congress on abuses of monopoly power. The committee was defunded in 1941, but its records are still under seal by order of the SEC.^[15]
The Municipal Securities Rulemaking Board (MSRB) was established in 1975 by Congress to develop rules for companies involved in underwriting and trading municipal securities. The MSRB is monitored by the SEC, but the MSRB does not have the authority to enforce its rules.
While most violations of securities laws are enforced by the SEC and the various SROs it monitors, state securities regulators can also enforce state-wide securities laws known colloquially as Blue sky laws.^[4] States may require securities to be registered in the state before they can be sold there. National Securities Markets Improvement Act of 1996 (NSMIA) addresses this dual system of federal-state regulation by amending Section 18 of the 1933 Act to exempt nationally traded securities from state registration, thereby pre-empting state law in this area. However, NSMIA preserves the states' anti-fraud authority over all securities traded in the state.^[16]
The SEC also works with federal and state law enforcement agencies to carry out actions against actors alleged to be in violation of the securities laws.
The SEC is a member of International Organization of Securities Commissions (IOSCO) and uses the IOSCO Multilateral Memorandum of Understanding as well as direct bilateral agreements with other countries Securities Commissions to deal with cross border misconduct in securities markets.

Related legislation

• 1934 – Securities Exchange Act of 1934, governing the secondary trading of securities
• 1938 – Establishment of the Temporary National Economic Committee 52 Stat. 705
• 1964 – Securities Act Amendments PL 88-467
• 1968 – Williams Act (Securities Disclosure Act) PL 90-439
• 1975 – Securities and Exchange Act PL 94-29
• 1980 – Depository Institutions and Deregulation Money Control Act PL 96-221
• 1982 – Garn–St. Germain Depository Institutions Act PL 97-320
• 1984 – Insider Trading Sanctions Act PL 98-376
• 1988 – Insider Trading and Securities Fraud Enforcement Act PL 100-704
• 1989 – Financial Institutions Reform, Recovery, and Enforcement PL 101-73
• 1999 – Gramm-Leach-Bliley Act PL 106-102
• 2000 – Commodity Futures Modernization Act of 2000
• 2002 – Sarbanes-Oxley Act
• 2007 – Regulation NMS
• 2010 - Dodd–Frank Wall Street Reform and Consumer Protection Act 

SEC communications

Comment letters

Comment letters are letters by the SEC to a public company raising issues and requested comments. For example, in October 2001, the SEC wrote to CA, Inc., covering fifteen items, mostly about CA's accounting, including five about revenue recognition. The chief financial officer of CA, to whom the letter was addressed, pleaded guilty to fraud at CA in 2004.
In June 2004, the SEC announced that it would publicly post all comment letters, to give investors access to the information in them. In mid-2005, Allan Beller, former head of the SEC's Division of Corporation Finance, said that the SEC believed that "it is appropriate to expand the transparency of our comment process by making this information available to an unlimited audience."
An analysis in May 2006 of regulatory filings over the prior 12 months indicates, however, that the SEC has not accomplished what it said it would do. The analysis found 212 companies that had reported receiving comment letters from the SEC, but only 21 letters (for these companies) were posted on the SEC's website. John W. White, the current head of the Division of Corporation Finance, told the New York Times: "We have now resolved the hurdles of posting the information.... We expect a significant number of new postings in the coming months."^[17]

No-action letters

No-action letters are letters by the SEC staff indicating that the staff will not recommend to the Commission that the SEC undertake enforcement action against a person or company if that entity engages in a particular action. These letters are sent in response to requests made when the legal status of an activity is not clear. These letters are publicly released and increase the body of knowledge on what exactly is and is not allowed. They represent the staff's intrepretations of the securities laws and, while persuasive, are not binding on the courts.

Regulatory action in the credit crunch

The SEC announced on September 17, 2008, strict new rules to prohibit all forms of "naked short selling" as a measure to reduce volatility in turbulent markets.^[18][19]
The SEC investigated into cases involving individuals attempting to manipulate the market by passing false rumors about certain financial institutions. The commission has also investigated into trading irregularities and abusive short selling practices. Hedge fund managers, broker-dealers, and institutional investors were also asked to disclose under oath, certain information pertaining to their positions in credit default swaps. The commission also brought about the largest settlements in the history of the SEC (approximately $51 billion in all) on behalf of investors who purchased auction rate securities from six different financial institutions.

Regulatory failures

Christopher Cox, the former chairman of the SEC, has recognized the organization's own multiple failures in relation to the Bernard Madoff fraud.^[20] Starting with an investigation in 1992 into a Madoff feeder fund which only invested with Madoff, and which, according to the SEC, promised "curiously steady" returns, the SEC did not investigate indications that something was amiss in Madoff's investment firm.^[21] The SEC has therefore been accused of missing numerous red flags and ignoring tips on Madoff's alleged fraud.^[22] As a result, Cox has said that an investigation will ensue into "all staff contact and relationships with the Madoff family and firm, and their impact, if any, on decisions by staff regarding the firm."^[23] Approximately 45 per cent of institutional investors felt that better oversight by the SEC could have prevented the Madoff fraud.^[24] Financial analyst and whistleblower Harry Markopolos complained to the SEC's Boston office in May 1999, telling the SEC staff they should investigate Madoff because it was impossible to legally make the profits Madoff claimed using the investment strategies that he claimed to use.
In 2009, the Project on Government Oversight, a government watchdog group, sent a letter to Congress criticizing the SEC for failing to implement more than half of the recommendations made to it by its Inspector General^[25] According to POGO, in the past 2 years, the SEC had taken no action on 27 out of 52 recommended reforms suggested in Inspector General reports, and still had a "pending" status on 197 of the 312 recommendations made in audit reports. Some of these recommendations included imposing disciplinary action on SEC employees who receive improper gifts or other favors from financial companies and investigating and reporting the causes of the failures to detect the Madoff ponzi scheme.^[26]
In June 2010, the SEC settled a wrongful termination lawsuit with former SEC enforcement lawyer Gary Aguirre, who was terminated in September 2005 following his attempt to subpoena Wall Street figure John J. Mack in an insider trading case involving hedge fund Pequot Capital Management.^[27] While the insider case was dropped at the time, a month prior to the SEC's settlement with Aguirre the SEC filed charges against Pequot.^[27] The Senate released a report in August 2007 detailing the issue and calling for reform of the SEC.^[28]

This section requires expansion.

Forms

Further information: SEC filing

SEC Forms List by category

• Form 4 (stock and stock options ownership and exercise disclosure)
• Form 8-K
• SEC Form 10-K
• Form S-1 (IPO)

SecuritiesLinks Links to commonly used SEC forms

See also

• Category:Financial regulation in the United States
• Category:United States federal financial legislation
• Category:United States proposed federal legislation
• Commodity Futures Trading Commission
• Securities Commission
• Chicago Stock Exchange
• Financial regulation
• List of financial regulatory authorities by country
• NASDAQ
• New York Stock Exchange
• Stock exchange
• Regulation D (SEC)

References

1. ^ Obama, Barack (2011). Budget of the United States Government: Fiscal Year 2011. Office of Management & Budget. pp. 1297. http://www.gpoaccess.gov/usbudget/fy11/index.html. 
2. ^ http://www.usa.gov/Agencies/Federal/All_Agencies/S.shtml
3. ^ Current SEC Commissioners
4. ^ ^{a b} Blue Sky Laws
5. ^ ^{a b} Seligman, Joel (2003). The Transformation of Wall Street. Aspen. pp. 45, 51–52. 
6. ^ Securities Act of 1933
7. ^ Securities Exchange Act of 1934
8. ^ ^{a b c d e} Frum, David (2000). How We Got Here: The '70s. New York, New York: Basic Books. pp. 31–32. ISBN 0-465-04195-7. 
9. ^ http://sec.gov/about/whatwedo.shtml#org
10. ^ National Association of Securities Dealers
11. ^ "How does the NASD differ from the SEC?" Investopedia. Investopedia Inc.
12. ^ How the SEC Protects Investors, Maintains Market Integrity, and Facilitates Capital Formation (Securities and Exchange Commission)
13. ^ Regulatory Structure
14. ^ U.S. Treasury
15. ^ National Archives
16. ^ NSMIA
17. ^ Gretchen Morgenson: "Deafened by the S.E.C.'s Silence, He Sued", New York Times, May 28, 2006, section 3, p. 1
18. ^ "Naked-Shorts Ban Gets Chilly Reception". http://www.thestreet.com/story/10437867/1/sec-bans-naked-short-selling.html?puc=googlefi&cm_ven=GOOGLEFI&cm_cat=FREE&cm_ite=NA. 
19. ^ Ellis, David (September 17, 2008). "Regulator enacts new ruling banning 'naked' short selling on all public companies.". CNN. http://money.cnn.com/2008/09/17/news/companies/sec_short_selling/. Retrieved May 26, 2010. 
20. ^ Financial Times: SEC chief admits to failures in Madoff case
21. ^ Moyer, Liz (December 23, 2008). "Could SEC Have Stopped Madoff Scam In 1992?". Forbes. http://www.forbes.com/business/2008/12/23/madoff-fraud-sec-biz-wall-cx_lm_1223madoff.html. Retrieved December 24, 2008. 
22. ^ Weil, Jonathan. "Madoff exposes double standard for Ponzi schemes". Bloomberg News (Greater Fort Wayne Business Weekly). http://www.fwdailynews.com/articles/2008/12/26/greater_fort_wayne/features/opinion/letters_to_the_editor/hid108593sect_34f8ccf755b92af298.txt. Retrieved 2008-12-26. ^{[dead link]}
23. ^ Serchuk, David (December 22, 2008). "Love, Madoff And The SEC". Forbes. http://www.forbes.com/intelligentinvesting/2008/12/20/intelligent-investing-madoff-sec-fraud-panelDec22.html?partner=contextstory. Retrieved 2008-12-24. 
24. ^ "Little faith in regulators and rating agencies, as LP demand for alternatives cools off, finds survey". http://www.briskfox.com/open/years/2009_q1/do_h_c44818.php. 
25. ^ Johnson, Fawn. (December 17, 2009) "Group Alleges Slack SEC Response to Internal Watchdog". [NASDAQ].
26. ^ Brian, Danielle. (December 16, 2009) "POGO Letter to SEC Chairman Mary Schapiro regarding SEC's failure to act on hundreds of Inspector General recommendations". The Project On Government Oversight Website.
27. ^ ^{a b} Blaylock D. (June 2010). SEC Settles with Aguirre. Government Accountability Project.
28. ^ Committee on Finance, Committee on the Judiciary. THE FIRING OF AN SEC ATTORNEY AND THE INVESTIGATION OF PEQUOT CAPITAL MANAGEMENT. U.S. Government Printing Office.

Microsoft is dead money for investors

By John C. Dvorak
Source: Market Watch
BERKELEY, Calif. (MarketWatch) — Investors in Microsoft Corp. must be beside themselves as the market climbs. The company seems to be dead money since 2000, and recent events aren’t rekindling any excitement.

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The company has gone conservative to an extreme. It’s time for Chief Executive Steve Ballmer to replace upper and middle management and find some of those folks like the company had in the 1990s.

Microsoft /quotes/comstock/15*!msft/quotes/nls/msft (MSFT 25.91, +0.19, +0.74%) is hardly aggressive anymore, and you almost have to beg the company for products to review. (I asked for a copy of the latest Office almost six months ago, received nothing.)

I wonder whatever happened to the old Microsoft? I think the investors wonder too. Was Gates that important?

The latest fiasco appears in the Faster Forward blog in the Washington Post and in the Mary Jo Foley posts linked within that about Microsoft. Apparently the company cannot produce any sort of competitive tablet until 2012. Read “Reports: Windows tablets in 2012, demo by June?” in the Washington Post.

This is bordering on the ridiculous, since every Tom, Dick and Harry has rolled out a tablet already — and by 2012 the market will be saturated with the things. Apple Inc. /quotes/comstock/15*!aapl/quotes/nls/aapl (AAPL 356.81, +1.45, +0.41%) is expected to roll out a third generation iPad by then.

Talk of this tablet comes on the heels of the slow-to-market Windows Phone 7 device, which was so late to the party it will never get traction, despite favorable reviews and genuine affection for the device.

I’m certain the Microsoft tablet will be outstanding too, but too late to have an impact.

The irony of this is that Microsoft was deeply involved in the first and second iteration of pad computing, and actually led an entire generation of the devices. The efforts failed, but were battling on the ground floor at least.

Let us not forget that Microsoft actually invented the smartphone. Again, the company didn’t get it right, but was on the front lines fighting. Now it has has decided to take its place in the rear. How does that help?

Somewhere along the line, Redmond has gotten gun-shy.

The most telling example of this was the short-lived Kin phone, which Microsoft released then killed just about six weeks later, before it could even attempt to get traction.

The company looks like it has an ingrained fear of failure, resulting in an incredibly cautious approach to everything. You’d think this would result in a mistake-free corporate environment, but the opposite seems true.

Generally speaking, the high-tech sector is a lot like football. Playing not to lose results in a preoccupation with losing, and eventually losing.

Microsoft is in perpetual defense: When it has the ball, the company does not want to take any risks, so runs up the middle for no yardage.

So you have Vista, the Kin, the late-to-market Phone 7 and now the late-to-market tablet. I don’t want to even get into the various online strategies.

While Microsoft does have enough cash cows to milk for decades to come, it seriously has lost its edge, and many investors realize this.

The result: dead money.

Charlie Sheen Could Teach Wall Street a Lesson

By Matthew Lynn - Mar 7, 2011 7:00 PM ET
Source: Bloomberg Business Week
It would take most of us a few dozen lifetimes to amass 2 million followers on Twitter. And yet Charlie Sheen managed it in less than a week.

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Last month, CBS Corp. (CBS) discontinued the hit comedy show “Two and a Half Men” after Sheen’s public jousting with senior management over a binge that the wild-man actor has described as “epic” and “radical.” Since then, he has become one of the biggest names on the planet.

What is fascinating about this whole fandango isn’t Sheen’s public dramas. It is the way he has given us a master-class in modern media promotion and how Wall Street shareholders, who ultimately own his former employer, have allowed themselves to be so completely outwitted.

Big companies seem to expect their celebrities to have stepped straight out of a 1950s suburb. From Kate Moss, to Tiger Woods, to Charlie Sheen, any hint of “inappropriate” behavior has the sponsors running faster than one of Sheen’s female companions can drop her, er, earrings.

And yet if there is a single lesson to be learned from the last decade, it is that the public -- or the customer -- is more forgiving. In fact, the more outrageously a celebrity behaves, and the less contrition he or she shows, the more we find them alluring. It pays to be bad, and slightly nutty as well.

If CBS can’t figure that out, perhaps it’s time the shareholders changed the management. Sheen clearly knows a lot more about how 21st-century business operates than they do.
‘Sober Valley Lodge’

As I write, Sheen has sent a Twitter update from “Sober Valley Lodge.” Rachel, one of the “goddesses” he lives with, has just left the building. He’s keeping his new customers -- all 2 million of them -- informed of every development.

Sheen has clearly struck a nerve. His over-the-top partying isn’t just amusing. It is the kind of escapism that audiences want. Rolling Stones guitarist Keith Richards has been an iconic figure for 40 years with his excessive lifestyle, so it wasn’t surprising to see that his autobiography topped the best-seller charts over Christmas. We don’t want celebrities who come across as drab and boring.

When British model Kate Moss was photographed taking drugs, her sponsors ran for cover. But Moss soon came back as popular as ever. Golfer Tiger Woods was dropped by many of his corporate backers after his chaotic love life was revealed. But so what? Tiger is back on the circuit, and once his swing is restored to its best, it is a fair bet the sponsors will show up again.
Bigger Than Ever

Sheen’s new army of followers on Twitter suggests his audience is rooting for his return. Anyone can see he will bounce back a bigger star than ever. CBS may well end up rehiring him. If it does, it will probably have to double or triple his pay. If it doesn’t, someone else will.

The odd thing is that they dropped him at all -- and that shareholders didn’t demand the board’s resignation. After all, the company made some catastrophic errors of judgment.

First, Sheen is entitled to a private life. He’s not an elected official and doesn’t offer moral guidance to anyone. If he wants to party like a wild animal, that’s his business. He is a fine actor, as movies such as “Platoon” (1986) and “Wall Street” (1987) showed. It’s ridiculous to expect him to behave like a Sunday school teacher. Since when were sitcom stars expected to be celibate teetotalers? There is no obligation on him to live his life by anyone else’s rules.

Companies Need Stars

Second, he’s the talent. A hedge fund wouldn’t fire the star trader if he was a drug user or an alcoholic. It would have to get rid of half the staff if it did. A publishing house doesn’t drop its biggest-selling writer because he or she keeps a bottle of vodka next to the computer. There would be far fewer books to read if it did. Media companies need stars more than stars need media companies. It’s that simple.

Third, and most importantly, they have misunderstood the way modern celebrity works. From Keith Richards to Paris Hilton to Charlie Sheen, we actually like the famous to be flamboyant, larger-than-life figures. They are fantasy characters through whom many people live vicariously. We like them to live outrageous lives. They do stuff that most of us don’t, but are happy to read about, and laugh about. It increases their appeal -- and Sheen is simply the latest example of that.

CBS doesn’t appear to get that. Neither does Wall Street. Fame is the essential raw material for any corporation in the entertainment industry. They should realize that Sheen, even with a bottle of bourbon in one hand and a porn star in the other, knows much more about business than they do.

(Matthew Lynn is a Bloomberg News columnist and the author of “Bust,” a book on the Greek debt crisis. The opinions expressed are his own.)

Experts warn of the next big virus threat

Virus experts warn the next big threat is on mobile phones and attacks beginning

The Canadian PressBy Michael Oliveira, The Canadian Press

Thu, 3 Mar, 2011 6:40 PM EST
TORONTO - Virus experts are warning that the next big security threat is on mobile phones and that the attacks have begun in earnest.

For months, security researchers have been tracking how hackers were trying to take their exploits to a new platform and infect smartphones with malware that could remotely control the devices.

Earlier this week, Symantec released a report about the spread of an infected app called "Steamy Windows" on Google's Android platform. The simple but popular app makes it look like your screen is covered with steam, which can be cleared off with finger swipes.

Unknown hackers created a copycat version of the app, secretly loaded it with malicious commands, and released it to the web on unofficial app download sites.

It's not the first time such a threat has been detected, said Symantec's principal security response manager Vikram Thakur, but it's far more sophisticated — and successful — than what was previously spotted in circulation.

"It definitely had a lot more features than we've been seeing with Android threats in the past few months," said Thakur, noting the malware enabled a hacker to retrieve data from an infected phone, send out premium rate text messages, show advertisements, and launch any website.

The attack could not force the phone to dial out, or activate a built-in camera but it's probably a matter of time until other viruses can, Thakur said.

"We expect more sophistication," he said. "It's definitely a step toward getting more and more comprehensive in their actions but I'm very certain this is not the end of it."

While the infected Steamy Windows app wasn't available through the official Android Marketplace, dozens of virus-laden apps somehow managed to get past Google's screening and were pulled offline Wednesday after being reported by users.

Among the infected apps were "Photo Editor," "Hot Sexy Videos," "Chess," "Falling Ball Dodge," "Scientific Calculator," "Advanced Currency Converter," "Spider Man," "Music Box," "Super Stopwatch & Timer" and "Color Blindness Test."

Thakur said experts were quite surprised that so many infected apps made it past Google and were available for several days before being pulled.

"The fact that Google has vetted them and made them available on Google's controlled website, it does instil a certain amount of comfort in the user," he said.

"I was pretty impressed that Google was able to pull the reported apps in less than five minutes (after being alerted) but what remains to be seen is what kind of process improvements they make on their end before they vet any application onto their marketplace, if any at all."

So far, virus threats have mostly targeted the Android platform. That's due to a few reasons, Thakur said. Apple's app vetting protocol is extremely rigorous and sneaking viruses into the App Store would likely be very difficult, he said. And because BlackBerrys are often tied to a corporate IT infrastructure with system administrators watching network traffic, evasion could also be difficult. The use of the Android platform is also growing exponentially, which allows hackers to cast a wide net when trying to infect users, Thakur added.

"For the malware author, the first thing he looks at is 'Where can I get my money' and he's going to follow wherever the honey is. The immense success of the Android platform has kind of lured the malware authors," he said.

There are a couple of ways for Android users to protect against downloading infected apps, Thakur said. There's an option in the phone's settings to only allow installs of Google-approved applications, although if more apps sneak past Google, a phone could still be affected. Thakur also recommends against downloading apps from third-party sites, especially if they promise free versions of popular apps.

If a phone is infected there are consequences.

"The worst case scenario for the common user is, let's say, loss of data, whatever is stored on the person's phone —whether it's contact information or emails — or a high monthly usage bill. If someone was able to remotely control your phone and start sending premium SMS messages all across the globe then chances are you're going to be getting a bill you were not expecting."

WikiLeaks: How the Cola war was won in Libya

WASHINGTON (Reuters) - An unpublished U.S. diplomatic cable obtained by WikiLeaks tells the previously undisclosed story of how an American corporate powerhouse -- the $35-billion Coca-Cola Co. -- got caught up in a fierce fraternal dispute between two of Libyan leader Muammar Gaddafi's sons.

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The contretemps among the freres Gaddafi over a local bottling plant escalated into a heavily armed confrontation resembling a Hollywood gangster film, as a classified 2006 U.S. cable put it.

"You know the movie 'The Godfather'? We've been living it for the last few months," a businessman involved in the dispute was quoted in the cable as telling an official from the U.S. diplomatic mission in Tripoli.

The cable, which was made available to Reuters by a third party, centers on a bottling plant in Tripoli that was shut down for three months. It had been seized by troops loyal to Mutassim Gaddafi, a son of Muammar, who at the time was feuding with one of his brothers, Mohammed. (Another State Department cable suggests a third Gaddafi son, Saadi -- better known as the family's professional soccer player -- may also have been involved in the squabble, though no details of his role are given.)

Eventually, the American diplomatic mission in Tripoli, known then as the U.S. Liaison Office, sent a firm protest to the Libyan government. The document states that around the same time, Mohammed Gaddafi, possibly under pressure from his sister Aisha, a family peacemaker, apparently agreed that shares owned by the Libyan Olympic Committee, which he led, would be sold to a third party.

Shortly afterward, the cable says, Mutassim's men left the Coke plant, ending the family standoff, but not before employees of the plant received threats of bodily harm and a Gaddafi cousin was stuffed in the trunk of a car.


U.S. FREEZES FAMILY ASSETS

The Coca-Cola confrontation is among numerous tales about endless squabbling within the Gaddafi clan recounted in State Department cables. Among other things, the incident underlines the difficulties faced by foreign companies operating in Libya even after the U.S. and United Nations began to scale back sanctions following Muammar Gaddafi's decision in late 2003 to abandon his nuclear weapons program.

A spokesman for Coca-Cola acknowledged there had been "some uncertainty" surrounding Coke distribution arrangements in Libya during the period described in the cable. But the problem was "resolved amicably" by the end of 2006, the spokesman said, and since then, Coca-Cola had been operating normally in Libya until the onset of the current unrest.

A spokesman for the State Department said: "We will decline to comment on any particular cable. The U.S. has taken aggressive action in recent days to freeze the assets of the Qaddafi family. Thus far, more than $30 billion in assets have been blocked."

WORKERS THREATENED, PLANT MATERIALS DESTROYED

Back when Libya was isolated by economic sanctions, its Coca-Cola supply was limited to consignments of the beverage bottled at a plant in Tunisia and transported to Tripoli and Benghazi.

After U.S. and international trade embargoes on Libya began to ease, the Tripoli plant was established. It was co-owned by what the cable describes as a British company called Ka'Mur -- whose name was a reference to two embargo-era Libyan soft-drinks -- and by the Libyan Olympic Committee, headed by Mohammed Gaddafi.

Immediately after this joint venture was set up, the State Department cable says, the embargo-era Libyan distributor of bottled Coke sued the group behind the newly-opened plant, alleging breach of contract. A complaint was also sent to Coca Cola International alleging that the bottling plant operators had "stolen the franchise" from the previous distributors, according to the cable. The bottling plant operators counter-sued.

Then, on December 28, 2005 -- two weeks after the Tripoli plant began turning out locally-bottled batches of Coke -- "two military cars carrying armed personnel without clear identification illegally broke into the facility, asked the employees to leave the premises and shut down the plant," according to an account of the incident a businessman gave to U.S. diplomats.

The U.S. mission in Libya learned from other sources that the troops were loyal to Mutassim Gaddafi, who, after the Coca-Cola dispute was resolved, was named Libya's national security adviser.

According to the State Department cable, Mutassim bore a grudge against his brother because he had "taken over" the embargo-era domestic soft-drink business in the late 1990s when Mutassim had been exiled to Egypt for "insubordination" against their father. (Another cable says the "rumor" was that Mutassim had been linked to a coup attempt.)

COUSINS ASSAULTED

Sporadic violent incidents continued to erupt in the weeks after Mutassim's forces occupied the bottling plant.

Early in the siege, a businessman affected by the squabble told American diplomats, the occupation force would allow plant managers to enter the building alone or in pairs. But later employees were barred from the facility.

During the weeks that followed, according to the State Department account, anonymous callers threatened three Coca-Cola employees, all Jordanian citizens, with "political problems" and bodily harm. Complaints to police, and later to Muammar Gaddafi himself, were met with indifference. The Libyan leader, according to the cable, "declined to get involved personally" yet urged plant owners to do "everything within (their) power to resolve the matter according to Libyan law."

Then, shortly before the plant reopened, Mutassim's men "abducted and assaulted" one of Mohammed Gaddafi's in-laws to "send a signal," according to the cable.

Earlier that day, it reported, one of Mohammed's associates, after hearing Mutassim "raging," phoned one the bottling plant's founder to warn him to "leave the city immediately" because Mutassim's men were coming to get him.

That night, a posse of Mutassim's associates turned up outside his brother's home and began shouting for Mohammed Gaddafi to come outside. When they got no response, the cable reports, Mutassim's men grabbed "one of Mohammed's cousins," who they proceeded to stuff into the trunk of one of their cars. The cable does not report the cousin's ultimate fate.

About a month later -- soon after the bottling plant had reopened -- two more violent incidents involving Mutassim Gaddafi occurred, according to the cable.

On one occasion, according to a witness who talked to American diplomats, Mutassim personally "assaulted" an unnamed cousin of Mohammed Gaddafi ("on his mother's side", according to the cable) who was a member of the Libyan Olympic Committee headed by Mohammed. A day earlier, the cable said, Mutassim had assaulted another of Mohammed's cousins. (The cable does not make clear whether either of these cousins might have been the cousin who earlier had been stuffed in a car trunk.)

It was in the wake of these episodes that one of the U.S. diplomatic mission's contacts offered the comment comparing his situation to "The Godfather." In a "hushed voice," the cable reports, the contact advised his American interlocutor that while he had heard "stories" about doing business in Libya, he had "never imagined" that what had occurred was still possible.

"ALL PARTIES" WANTED STORY HUSHED UP

After the bottling plant returned to operation, according to the State Department's account, some contacts of U.S. diplomats said that a settlement between Mohammed and Mutassim Gaddafi had been brokered by their sister Aisha, described in other cables as a frequent arbiter of disputes among her fractious siblings. But other embassy contacts said that Mohammed Gaddafi decided on his own to lessen tensions with Mutassim by selling the Olympic Committee's shares to a third party.

The U.S. mission in Libya claimed some credit for helping to defuse the standoff. The cable says that because the principal company involved in operating the Tripoli bottling plant was not an American entity, U.S. diplomats were limited in what they could do.

But in an effort to "protect the broad interests of a brand representing several million USD in annual sales to a U.S.-based company," U.S. diplomats did contact influential Libyan officials to urge that the brotherly dispute be resolved: the U.S. mission sent what the cable describes as a "strongly worded diplomatic note" expressing "serious concern over the plant closure and noting the growing risk of severe damage to U.S. investor confidence in Libya."

Two days later, the plant reopened.

The State Department cable describes the Coca-Cola conflict as a "case study in the involvement of Qadhafi (sic) family members directly influencing the flow, pace and nature of economic activity. Family members squabble over personal financial interest with little regard to the possible impact on foreign investors or international public opinion."

The Coca-Cola case, the cable adds, "is typical of the power struggles likely to continue as the Qadhafi children and other regime elite continue to define (or re-define) their respective spheres of commercial influence."

Apart from a brief mention on a website operated by Libyan dissidents, the cable adds, it was "noteworthy that the news was kept out of the press," since "all parties involved -- including the foreign companies -- had an interest in keeping things quiet as long as there seemed a possibility of a near-term solution."

(Editing by Jim Impoco and Claudia Parsons)

Ship carrying huge sum of Libyan money seized by Britain

By Indo Asian News Service | IANS – Fri, 4 Mar, 2011 8:16 AM EST
London, March 4 (IANS) A ship carrying a huge amount of Libyan money has been seized by officials and taken to a British port, the Home Office said Friday.

The vessel has been taken into Harwich docks led by HMS Vigilant.

'A vessel which had been heading to Libya returned to the UK Wednesday morning,' The Mirror quoted a Home Office spokesman as saying Friday.

'The ship was escorted into the port of Harwich by the UK Border Agency cutter HMS Vigilant.

'A number of containers were offloaded from the boat and have been taken under control of UK Border Agency and have been moved to a secure location,' he said.

'The cargo is understood to contain a significant quantity of Libyan currency, which is subject to a UN sanction.'

Some reports suggested the vessel was carrying 100 million pounds worth of the Libyan currency, the dinar.

The Home Office, however, have refused to confirm the exact value of the seized money.

It is understood the ship was intercepted after being tracked to British waters when it aborted an attempt to dock in the Libyan capital Tripoli over the weekend.

Britain has already prohibited unlicensed export of any uncirculated Libyan banknotes from the country in line with UN sanctions.