A federal judge has ordered the Securities and Exchange Commission to reconsider its arguments against requiring corporations to make additional disclosure of environmental and equal employment information.
Judge Charles R. Richey said Friday that the SEC's decision not to require such information from companies "was the product of a decision-making process marred by serious and fundamental defects."
The case had its origins in 1971, when the Natural Resources Defense Council and the Project on Corporate Responsibility petitioned the SEC to broaden its disclosure rules.
Other organizations, including the National Organization for Women (NOW) and three religious organizations joined the case in 1976.
In 1974, Judge Richey ordered the SEC to hold detailed hearings on whether companies should be required to file expanded information.
At the time, Richey ruled that SEC disclosure regulations in the environmental area were drawn up improperly and probably were indequate to meet provisions of the National Environmental Protection Act (NEPA) of 1970.
NEPA requires all federal agencies to review their statutory authority to advance the casue of environmental protection to the fullest possible expent.
The SEC has argued that further disclosure of employment practices and environmental efforst of corporations would not benefit investors materially. Materiality is the key to what the SEC requiers corporations should report.
In his decision last week, Richey remanded the case to the commission and ordered it to act "on the basis of an adequately developed administrative record."
The judge told the SEC to complete the rule-making process within six months.
An SEC spokesman said that the commission has not decided whether to appeal the decision.