SEC head says to review TARP company disclosures

By Martha Graybow and John Poirier

WASHINGTON (Reuters) - The U.S. Securities and Exchange Commission plans to review the public disclosures made by financial companies that have received bailout money from the government, the agency's top official told Reuters.

SEC Chairman Mary Schapiro said the review into what companies participating in the $700 billion Troubled Asset Relief Program have revealed to investors would be part of a general assessment of disclosures by corporations.

"We will be looking obviously at corporate disclosure generally," Schapiro told the Reuters Global Financial Regulation Summit in Washington on Tuesday. "We will be looking particularly at TARP-recipient firms and the quality of their disclosures."

Shareholders have grown increasingly concerned over whether they are getting enough information from companies about aspects of the bailout.

Last week, New York Attorney General Andrew Cuomo said Bank of America Corp (BAC.N) Chief Executive Kenneth Lewis was pressured by senior government officials Henry Paulson and Federal Reserve Chairman Ben Bernanke in mid-December to keep quiet about losses at Merrill Lynch ahead of the closing of their merger on January 1.

Cuomo said Lewis testified he was asked to minimize disclosure and that Paulson, then the U.S. Treasury Secretary, wanted the Merrill acquisition to go through "to stem a financial disaster" in the markets. The testimony came as part of Cuomo's probe into the circumstances of $3.6 billion of bonuses to Merrill executives before the buyout went through.

Schapiro declined to comment when asked if the SEC was reviewing Bank of America's disclosures surrounding those discussions. The talks occurred before Schapiro took over as SEC chairman this year.

She said, however, that "there is nothing in TARP nor anywhere else that I know of that overrides corporations' duty under federal securities laws to disclose material to shareholders."