The Securities and Exchange Commission voted today to adopt several new rules and amendments that were required under the anti-fraud legislation that became law last summer.

The commission voted to prohibit top company executives from selling or buying company stock during blackout periods, the time when pension investors cannot alter their retirement plans. It also adopted rules requiring that companies disclose whether they have a "financial expert" sitting on their audit committees. The commission defined a financial expert as, among other things, an executive with an understanding of financial statements and generally accepted accounting principles, or GAAP.

In addition, the commission adopted rules requiring that the disclosure of any pro forma financial information by a public company not mislead investors. The new rules will also require companies to promptly update investors about changes in the company’s financial condition.

The new rules fall under the Sarbanes-Oxley Act, the anti-corporate fraud legislation that was signed into law by President Bush last summer. The legislation was spawned by widespread corporate scandals, including those at Enron and WorldCom, which drained hundreds of millions of dollars from the pension funds of retirement investors. The commission has until Jan. 26 to implement the legislation’s provisions.

Next week, the SEC is expected to address additional Sarbanes-Oxley provisions, including, ratifying rules regarding auditor independence and prohibited non-audit services, minimum standards of conduct for attorneys, disclosure of off-balance-sheet transactions, and appropriate time periods to retain records.

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