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81 Fordham L. Rev. 1315 (2012-2013)
Conflict Minerals Legislation: The SEC's New Role as Diplomatic and Humanitarian Watchdog

handle is hein.journals/flr81 and id is 1343 raw text is: CONFLICT MINERALS LEGISLATION: THE SEC'S NEW ROLE AS DIPLOMATIC AND HUMANITARIAN WATCHDOG Karen E. Woody* Buried in the voluminous Dodd-Frank Wall Street Reform and Consumer Protection Act is an oft-overlooked provision requiring corporate disclosure of the use of conflict minerals in products manufactured by issuing corporations. This Article scrutinizes the legislative history and lobbying efforts behind the conflict minerals provision to establish that, unlike the majority of the bill, its goals are moral and political, rather than financial. Analyzing the history of disclosure requirements, the Article suggests that the presence of conflict minerals in an issuer's product is not inherently material information and that the Dodd-Frank provision statutorily renders nonmaterial information material. The provision, therefore, forces the SEC to expand beyond its congressional mandate of protecting investors and ensuring capital formation by requiring issuers to engage in additional nonfinancial disclosures in order to meet the provision's humanitarian and diplomatic aims. Further, the Article posits that the conflict minerals provision is a wholly ineffective means to accomplish its stated humanitarian goals and likely will cause more harm than good in the Democratic Republic of the Congo. In conclusion, this Article proposes that a more efficient regulatory model for conflict minerals is the Clean Diamond Trade Act and the Kimberly Process Certification Scheme. TABLE OF CONTENTS INTRODUCTION................................................. 1316 I. THE HISTORY OF THE SECURITIES AND EXCHANGE COMMISSION'S DISCLOSURE REQUIREMENTS......................... 1320 A. Legislative History of the 1933 and 1934 Acts...... ..... 1320 B. The Importance of Materiality.... .................. 1322 II. DODD-FRANK SECTION 1502........................ 1324 A. Legislative History and the Evolution of Section 1502........... 1325 * Karen E. Woody is a white collar criminal defense attorney in Washington, D.C. The author would like to thank Chris Brummer, Robert Miller, Ethiopis Tafara, Alexander Siercke, Mark Srere, and Margaret Ryznar for their encouragement and advice, as well as Amy Dillard for her continual support. 1315

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