Coming Clean on Y2K

The Securities and Exchange Commission has a problem with the way companies are disclosing their year 2000 computer problems.

Last week, the agency, which regulates the nation’s stock markets, issued a statement that scolded public corporations for their lack of Y2K candor.

“While the number of companies disclosing year 2000 issues has increased dramatically,” an SEC release said, “many companies are not providing the quality of disclosure that we believe investors expect.”

The year 2000 problem stems from the inability of many computer systems to recognize dates beyond Dec. 31, 1999. Older systems were commonly programmed to use only the last two digits of a given year, meaning they may gag when those digits flip over to “00.”

The SEC has been pressuring companies to tell investors how their businesses might be affected by the notorious computer glitch.

But an SEC task force recently found that most companies have simply plopped some meaningless legalese into their financial reports.

To clarify things, the SEC even posted a document on its Web site, https://www.sec.gov, that compares “meaningful Y2K disclosure” with “boilerplate Y2K disclosure.”

The agency says most companies will be affected by year 2000 issues and that companies are obligated to disclose their state of readiness, costs and risks they face, as well as their contingency plans.