Nanotechnology Now

Our NanoNews Digest Sponsors


Heifer International

Wikipedia Affiliate Button


DHgate

Home > Press > Asbestos Litigation Disaster for Investors Could be Repeated With Nanotechnology Unless SEC and FASB Close Eight Major Loopholes Now Preventing Honest Disclosure

Abstract:
Investor Environmental Health Network Analysis Finds Disturbing Asbestos-Nanotech Parallels That Could Saddle Investors with a Major New Round of Costly Mega-Litigation

Asbestos Litigation Disaster for Investors Could be Repeated With Nanotechnology Unless SEC and FASB Close Eight Major Loopholes Now Preventing Honest Disclosure

Washington, DC | Posted on June 16th, 2009

Billions of dollars in potential asbestos-like litigation risks for nanotechnology companies and investors are now hidden due to weak regulations governing disclosures of liabilities, according to a major new report from the Investor Environmental Health Network (IEHN). Nanotechnologies are now commonly found in sunscreen, cosmetics, food, clothing, sporting goods and packaging. Yet some of these technologies are showing signs of posing serious hazards to human health and the environment, including the same kind of grave threats resulting from exposure to asbestos, according to the IEHN report.

The good news for investors is that the U.S. Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB) are now in the process of examining disclosure requirements and could remedy the eight securities and accounting loopholes identified in the report. IEHN is a partnership of investment managers overseeing more than $25 billion in assets.

The report and a related video interview with the author are now available online at www.iehn.org.

Report author Sanford Lewis, counsel to IEHN, said: "In the midst of the current crisis of investor confidence, our report flags a major new argument for demanding honest accounting. Investors cannot afford the repetition of another asbestos-like wiping out of billions of dollars of equity when it comes to new technologies like nanotechnologies that are seeking investment dollars now. This report is a call to action for regulators to bolster the integrity of securities disclosure and financial reporting, and to restore credibility to the investing marketplace. Based on the identified loopholes in securities and accounting rules, the credibility of corporate reports as a means of assessing the financial value of companies is in doubt. The FASB and SEC must act quickly and decisively to close the eight loopholes identified in the report."

Commenting on the report, David Rejeski, director, project on emerging nanotechnologies, Woodrow Wilson International Center for Scholars, and former federal agency representative, White House Council on Environmental Quality, said: "While billions of dollars have been devoted to developing nanomaterials and introducing them into commerce, much less effort has been devoted to assessing their toxicity and developing governance systems for them. IEHN's new report identifies major holes in existing rules for addressing financial liabilities and offers constructive suggestions for filling them. Ultimately, a regulatory system that does not address the liabilities of existing nanotechnologies puts consumers, investors, shareholders, and the environment at risk and compromises the future promise of the technology."

The new IEHN report concludes: "As a result of weak regulations, companies do not assess, quantify or disclose potential and pending liabilities on a timely basis …. [S]hareholders and analysts are unable to use existing disclosures for a realistic evaluation of many companies. Today, as potentially ultrahazardous nanotechnologies enter the market, the same regulatory weaknesses that allowed asbestos manufacturers to conceal information from investors are being abused once again to conceal information regarding the newer technologies. Regulators must act now to prevent a repeat of past financial disasters, and to ensure that investors' expectations of forthright accounting are met. Although our report focuses on product-related liabilities, many of our findings are equally applicable to the broader array of contingent liabilities that appear in disclosure reports and financial statements."

BACKGROUND ON NANOTECH RISKS

Nanotechnology is a rapidly growing force in the marketplace, with worldwide sales of nanotechnology-based products doubling annually. According to Lux research, the medical, pharmaceutical, materials, coatings, catalysts, food and food processing industries, as well as green energy organizations, will spend more than $1 trillion developing products based on nanotechnology by 2015. Current annual worldwide investment in nanotechnology research is over $9.6 billion, and more than two million people work in the development, production, or use of nanomaterials.

This widespread deployment of nanotechnologies in the marketplace is taking place despite evidence that the different size and surface area of nanoparticles may result in dramatically enhanced toxicity and harm to living organisms. Evaluation of the impact on human health and the environment is lagging the rapid introduction of these products to the marketplace, with future liabilities one likely result.

A recent European Agency for Safety and Health at Work (EU-OSHA) report titled "Expert Forecast on Emerging Chemical Risks" identifies the main groups of substances which could pose new and increasing risks to workers. It puts nanoparticles at the top of the list of substances from which
workers need protection.

Carbon nanotubes are one type of nanotechnology. Some forms of these materials have already been found to cause granulomas in the lining, or mesothelia, of the body cavity of laboratory animals. Granulomas are pathological responses known to be precursors of mesothelioma, one of the diseases caused by asbestos. Researchers have concluded that "long, thin carbon nanotubes showed the same effects as long, thin asbestos fibers." Despite all the growing concern, companies producing carbon nanotubes have failed to disclose to investors whether the nanotubes they are producing are in this potentially harmful form, and if so, any studies that might help quantify the potential liability exposures.

EIGHT DISCLOSURE LOOPHOLES THE SEC/FASB SHOULD CLOSE

The IEHN study identifies eight loopholes in the current system of securities and accounting regulation that currently prevent honest accounting for a firm's potential liabilities and provides practical solutions:

1. SHORTSIGHTEDNESS. Taking the short view and thereby effectively avoiding disclosure or estimation of potential longer term liabilities.

2. CONCEALED SCIENCE. Concealing emerging science that forewarns of potential liabilities in the future.

3. THE KNOWN MINIMUM. Disclosing only the "known minimum" of potential liabilities, even though a more realistic assessment might be so much larger that it would indicate the potential for a total wipe out of shareholder value.

4. PRIVILEGING SECRECY. "Privileging" concealment, by using attorney-client privileges as a shield against generating a public estimate of liability for investors.

5. INCONSISTENT ESTIMATES. Providing inconsistent liability estimates to insurers and investors, with larger estimates of liabilities typically provided to insurers than to investors.

6. HIDDEN ASSUMPTIONS. Using hidden assumptions to minimize estimates of liability.

7. MISSING BENCHMARKS. Refusing to benchmark liabilities against other companies whose published litigation results may demonstrate realistic estimates of liability.

8. RISK-FREE PROXIES. Refusing to allow shareholders to place on the annual proxy ballot questions requesting disclosure of specific risks of concern to investors.

As the IEHN report notes: "Together, the eight loopholes identified in this report allow companies to avoid estimation and disclosure of contingent liabilities. They reflect a pervasive ‘don't ask/don't tell' approach which is no longer tolerable in a public policy environment where restoring investor confidence is the priority. Current regulatory reform efforts already underway at the SEC and FASB provide opportunities to close these loopholes …"

EDITOR'S NOTE: A streaming audio replay of the news event will be available on the Web at www.iehn.org as of 6 p.m. EDT on June 16, 2009. A related interview with the report author is available online at www.iehn.org/multimedia.online.php.

####

About Investor Environmental Health
The Investor Environmental Health Network is a collaborative partnership of investment managers who manage more than $25 billion in assets and are concerned about the financial and public health risks associated with corporate toxic chemicals policies.

For more information, please click here

Contacts:
Patrick Mitchell
(703) 276-3265, or

Copyright © Investor Environmental Health

If you have a comment, please Contact us.

Issuers of news releases, not 7th Wave, Inc. or Nanotechnology Now, are solely responsible for the accuracy of the content.

Bookmark:
Delicious Digg Newsvine Google Yahoo Reddit Magnoliacom Furl Facebook

Related News Press

News and information

Animal study shows flexible, dissolvable silicon device promising for brain monitoring: Other applications include post-operative observation for vascular, cardiac, and orthopaedic procedures, finds Penn study May 5th, 2016

Speedy ion conduction in solid electrolytes clears road for advanced energy devices May 5th, 2016

Engineers create a better way to boil water -- with industrial, electronics applications May 5th, 2016

Clues on the path to a new lithium battery technology: Charging produces highly reactive singlet oxygen in lithium air batteries May 5th, 2016

Legal

SUNY CNSE and Albany Law School Partner to Create First-of-its-Kind Nanotechnology Education and Training Program November 5th, 2013

US Court of Appeals characterizes Wyatt Technology Corporation Lanham Act claims as “groundless, unreasonable, vexatious or pursued in bad faith” May 31st, 2013

Fluidigm Files Lawsuit against NanoString’s Deceptive Marketing: Fluidigm Sues NanoString for False and Misleading Advertising under the Lanham Act November 8th, 2012

Photonic gels are colorful sensors: Rice, MIT researchers create thin-film polymer metamaterial with potential for many uses October 10th, 2012

Ethics

Synthetic biology needs robust safety mechanisms before real world application: Ethics and technology hold the key to the success of synthetic biology September 17th, 2015

March 2016; 6th Int'l Conference on Nanostructures in Iran July 29th, 2015

PETA science consortium to present at Society for Risk Analysis meeting December 10th, 2014

PETA science consortium experts to present at international nanotechology workshop: PETA International Science Consortium, Ltd., Is a Sponsor of Nano Risk Analysis II September 12th, 2014

Preparing for Nano

Searching for a nanotech self-organizing principle May 1st, 2016

Nanotechnology is changing everything from medicine to self-healing buildings: Nanotechnology is so small it's measured in billionths of metres, and it is revolutionising every aspect of our lives April 2nd, 2016

Durnham University's DEEPEN project comes to a close September 26th, 2012

Technical Seminar at ANFoS 2012 August 22nd, 2012

Govt.-Legislation/Regulation/Funding/Policy

Animal study shows flexible, dissolvable silicon device promising for brain monitoring: Other applications include post-operative observation for vascular, cardiac, and orthopaedic procedures, finds Penn study May 5th, 2016

Speedy ion conduction in solid electrolytes clears road for advanced energy devices May 5th, 2016

Engineers create a better way to boil water -- with industrial, electronics applications May 5th, 2016

Clues on the path to a new lithium battery technology: Charging produces highly reactive singlet oxygen in lithium air batteries May 5th, 2016

Investments/IPO's/Splits

ORIG3N Added to Companies Presenting at Harris & Harris Group's Annual Meeting, Tuesday June 7, 2016, the New York Genome Center April 27th, 2016

Aspen Aerogels to Present at the 28th Annual ROTH Conference March 14th, 2016

Harris & Harris Group Announces Formation of Co-Investment Fund for Accredited Investors March 9th, 2016

Arrowhead to Present at Upcoming March Conferences March 1st, 2016

Nanotubes/Buckyballs/Fullerenes

Non-animal approach to predict impact of nanomaterials on human lung published Archives of Toxicology publishes workshop recommendations May 2nd, 2016

Clay nanotube-biopolymer composite scaffolds for tissue engineering May 1st, 2016

NREL finds nanotube semiconductors well-suited for PV systems April 27th, 2016

Researchers create artificial protein to control assembly of buckyballs April 27th, 2016

Materials/Metamaterials

A View Through Wood Shows Futuristic Applications: Transparent wood made at UMD could create new windows, cars and solar panels May 5th, 2016

Clay nanotube-biopolymer composite scaffolds for tissue engineering May 1st, 2016

Exploring phosphorene, a promising new material April 29th, 2016

Hybrid nanoantennas -- next-generation platform for ultradense data recording April 28th, 2016

Announcements

Speedy ion conduction in solid electrolytes clears road for advanced energy devices May 5th, 2016

Engineers create a better way to boil water -- with industrial, electronics applications May 5th, 2016

Clues on the path to a new lithium battery technology: Charging produces highly reactive singlet oxygen in lithium air batteries May 5th, 2016

Unique nano-capsules promise the targeted drug delivery: Russian scientists created unique nano-capsules for the targeted drug delivery May 5th, 2016

Environment

Team builds first quantum cascade laser on silicon: Eliminates the need for an external light source for mid-infrared silicon photonic devices or photonic circuits April 21st, 2016

Atomically thin sensor detects harmful air pollution in the home April 18th, 2016

Catalyst could make production of key chemical more eco-friendly April 10th, 2016

Nanoporous material's strange "breathing" behavior April 7th, 2016

Industrial

Engineers create a better way to boil water -- with industrial, electronics applications May 5th, 2016

Novel anti-biofilm nano coating developed at Ben-Gurion U.: Offers significant anti-adhesive potential for a variety of medical and industrial applications April 25th, 2016

Model aids efforts to reduce cost of carbon nanostructures for industry, research April 5th, 2016

Molecular-scale ALD discovery could have industrial-sized impact: New atomic layer deposition technique reduces waste March 31st, 2016

Safety-Nanoparticles/Risk management

Non-animal approach to predict impact of nanomaterials on human lung published Archives of Toxicology publishes workshop recommendations May 2nd, 2016

Scientists propose non-animal tools for assessing the toxicity of nanomaterials: Particle and Fibre Toxicology publishes recommendations from expert group meeting April 26th, 2016

The impact of anti-odor clothing on the environment March 31st, 2016

SUNY Poly, in Collaboration with the George Washington School of Medicine and Health Sciences and Stony Brook University, Demonstrates Pioneering Method to Visualize and Identify Engineered Nanoparticles in Tissue March 25th, 2016

NanoNews-Digest
The latest news from around the world, FREE




  Premium Products
NanoNews-Custom
Only the news you want to read!
 Learn More
NanoTech-Transfer
University Technology Transfer & Patents
 Learn More
NanoStrategies
Full-service, expert consulting
 Learn More











ASP
Nanotechnology Now Featured Books




NNN

The Hunger Project







Car Brands
Buy website traffic