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Disclosure in Publications, Presentations, and Grant Proposals
Demonstrating transparency and objectivity in research is important for higher education, academic journals, and professional organizations in order to maintain credibility and influence. When an RCOI Management Plan is in place, its purpose is to mitigate a potential or perceived research conflict of interest by describing a set of controls and transparency requirements, but it does not eliminate it. The potential research conflict of interest (real or perceived) exists for as long as the significant financial interests and/or outside activities generating it are in place. Therefore, it would be incorrect for an individual with an RCOI Management Plan to say or consider that they "do not have a conflict of interest" simply due to RCOI disclosure to the University or having an active RCOI Management Plan.
Sponsoring agencies, research journals, professional societies, and conference presentations may have general or specific rules for recognizing potential research conflicts of interest. These can be broadly based disclosure requirements or specific to the subject matter. In instances where a potential RCOI may impact (or be perceived to impact) an activity with these organizations or their processes, individuals must disclose their RCOI in accordance with the requirements of their approved Management Plan in addition to the requirements of these organizations. Sometimes, disclosures require judgment on a case-by-case basis depending on the relationship between the activity (proposal submission, planned publications, etc.) contemplated and its relevance to the individual's RCOI. For example, in the case of submitting proposals to sponsoring agencies, since the RCOI Committee is not reviewing all proposals submitted by researchers with Management Plans, the initial assessment is the responsibility of the individual with the RCOI to consider the content, specific aims, and collaborators of the proposal in order to determine if an RCOI disclosure must be made to the granting agency according to their rules and requirements. This assessment must take place independently for each proposal since the determination is specific to the project and its subject matter. The RCOI Committee can provide assistance if the faculty member is unsure about the relatedness or need for disclosure. However, in this instance; judgment is based on the substance of the proposal and its potential relevance to the RCOI, and by no means is the potential conflict absolved or no longer in existence simply because a Management Plan is in place.
Therefore, it is important that authors, editors, and reviewers provide full disclosure to mitigate or eliminate perception of any financial or personal gain that may be obtained through research described in publications, presentations, or grant proposals. Many publications and organizations have specific requirements and standards for disclosure of related financial interests and board service relationships.
When to Provide Disclosure
When a potential research conflict of interest exists and a disclosure is required in publications, presentations, and grant proposals, it must be provided in cases of real and perceived RCOIs:
- Real Research Conflicts of Interest: Real RCOIs include significant financial interest, IP, or other relationships that could potentially bias the research being reported in the publication/presentation. Service on a board such as CEO or President of a company is considered a financial interest. These RCOIs could be possible in cases of outside employment, being a consultant, ownership in a private company, income from intellectual property, board service, or similar relationships/interests of your spouse and/or dependents.
- Perceived Research Conflicts of Interest: Any of the interests or relationships described above, if they could be perceived to be related to your UTA research or responsibilities. If the outside activities are focused on or working with an outside entity that focuses on products or research that could be perceived by a reasonable person to be related to what you do at UTA, then a disclosure should be provided in the publication/presentation to alleviate the potential RCOI and provide transparency.
How to Provide Disclosure
- Publications: In publications, you must comply with the RCOI disclosure policies of the publisher or journal. If the publisher/journal does not have an explicit policy on disclosing conflicts of interest, you should provide disclosure whenever possible in order to provide full transparency and protect the integrity of your work. See "Example Disclosure Statement" below for guidance; however, the statement may need to be altered in order to fit the context or guidelines of the particular journal.
- Presentations: In presentations, you must provide a disclosure statement in your presentation for any real or perceived RCOIs as defined above. See "Example Disclosure Statement" below for the minimum information to be included. You may add additional details as you deem necessary.
- Grant Proposals: In grant proposals, you must disclose your RCOI in accordance with the requirements of your approved Management Plan in addition to the requirements of the granting agency. The RCOI Committee does not review proposals submitted by all researchers with Management Plans. The initial assessment is the responsibility of the individual with the RCOI to consider the content, specific aims, and collaborators of the proposal in order to determine if an RCOI disclosure must be made to the granting agency in accordance with their rules and regulations.
Example Disclosure Statement
[Dr. /Mr. /Ms. name] has a potential research conflict of interest due to a financial interest with company [name of entity]. A management plan has been created to preserve objectivity in research in accordance with UTA policy.
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Promoting Research Security and Integrity Compliance largely depends on submitting accurate, complete and consistent disclosures to promote transparency and maintain compliance.
In particular, the federal agencies continue to investigate discrepancies and failures to disclose in grantees, which have resulted in some cases, criminal and civil charges and employment terminations. These discrepancies were often discovered when the federal agencies compared disclosures from publications, conflict of interest, conflict of commitment, grant applications and annual progress reports.
- Understand your disclosure requirements as a researcher and UCI employee (review General Disclosure Requirements below)
- Maintain an updated CV
- Master Log is a tool and example of the types of information you need to maintain and track
General Disclosure Requirements
As a researcher, there are a number of general disclosure requirements depending on your role and the types of activities you are involved in at UCI. The following table highlights some of the key disclosure requirements that the federal government is looking at related to research security and integrity.
- National Science Foundation Disclosure Guidance
NSF and Federal Resources
- NSF Proposal and Award Policies and Procedures Guide (PAPPG 23-1) – Effective January 30, 2023
- NSF FAQs on Current and Pending Support [PDF]
- NSF Pre-Award and Post-Award Disclosures Relating to the Biographical Sketch and Current and Pending Support
- SciENcv : Science Experts Network Curriculum Vitae
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- VPR/RAS NSF MIT-Specific Guidance – Proposal Prep Checklists
- NSF Disclosure Guidance Checklist [PDF] – September 22, 2021
- Awards and Pending Proposals Report (requires MIT certificate and KC roles)
Last updated: January 23, 2023
NSF requires full disclosure of current and pending support, which includes domestic support and any foreign support or engagement.
As of January 30, 2023, the following guidelines in the NSF Proposal and Awards Policies and Procedures Guide 23-1 apply.
What to Disclose
NSF requires a biographical sketch for each individual identified as senior personnel. Detailed information about the content is available in the Proposal and Award Policies and Procedures Guide (PAPPG) Chapter II.C.2.f .
Of particular note, the PAPPG requires senior personnel to list "all the individual's academic, professional, or institutional appointments, beginning with the current appointment." With regard to professional appointments, senior personnel must identify all current domestic or foreign professional appointments outside of the individual's academic, professional, or institutional appointments at the proposing organization.
When to Disclose
Required biographical sketch information must be disclosed to NSF when grant applications are submitted.
How to Disclose
The biographical sketch is currently limited to two pages. Effective October 4, 2021, the page limitation will be increased to 3 pages for each individual identified as senior personnel. The formats below are for proposals submitted October 4, 2021 and after. Approved formats for creating a biographical sketch are one of the following:
- FAQs on using SciENcv
- SciENcv Guidance on Creating an NSF Biographical Sketch , including step-by-step instructions and screenshots for each of the four required sections
- YouTube Video - SciENcv for NSF Users: Biographical Sketches
- YouTube Video - SciENcv Tutorial
- YouTube Video - Integrating with ORCID
- NSF Fillable PDF : NSF is providing a fillable PDF for use in preparation of the biographical sketch. Proposers will be able to download it from this page, complete the form, and upload it as part of their proposal via FastLane or Research.gov.
Current and Pending Support
Current and pending support information must be separately provided for each individual designated as senior personnel on the proposal. Current and pending support includes all resources made available to an individual in support of and/or related to all of his/her research efforts, regardless of whether or not they have monetary value. Current and pending support also includes in-kind contributions (such as office/laboratory space, equipment, supplies, employees, students. In-kind contributions not intended for use on the project/proposal being proposed also must be reported.
Current and pending support information must be provided for this project, for ongoing projects, and for any proposals currently under consideration from whatever source, irrespective of whether such support is provided through the proposing organization or is provided directly to the individual. A brief statement of the overall objectives of the project/proposal being proposed or in-kind contribution must be provided. The submission also should summarize potential overlap with any active or pending proposal or in-kind contribution and this proposal in terms of scope, budget, or person-months planned or committed to the project by the individual.
The total award amount for the entire award period covered (including indirect costs) must be provided, as well as the number of person-months (or partial person-months) per year to be devoted to the project by the individual.
Concurrent submission of a proposal to other organizations will not prejudice its review by NSF, if disclosed. If the project (or any part of the project) now being submitted has been funded previously by a source other than NSF, information must be provided regarding the last period of funding.
Please consult this list of Frequently Asked Questions provided by NSF for additional guidance on the disclosure of current and pending support.
Current and pending support must be disclosed to NSF when grant applications and annual and final progress reports are submitted.
- As of October 5, 2020 NSF implemented additional requirements for the Revised Research Performance Report (RPPR) , including a new question on current and pending support to be answered by PIs when submitting their annual and final reports.
- If current and pending support information hasn’t been incorporated into applications or progress reports and should have been, the PI must contact RAS as soon as possible so that revised information can be submitted to NSF. A revision of the NSF Agency Specific Requirements which became effective on October 5, 2020 requires that this information be submitted to NSF by the institution’s Authorized Organizational Representative within 30 calendar days of the identification of the undisclosed support or contribution , so it is imperative that PIs contact their RAS contract administrator immediately.
Please contact your representative in MIT Research Administration Services (RAS) or [email protected] if you have any questions.
Approved formats for creating current & pending support are one of the following:
- SciENcv Guidance on Creating an NSF Current and Pending Support , including step-by-step instructions and screenshots for the two required sections
- FAQs on what to include in Current and Pending Support - addressing policy questions and clarifications to the current and pending support coverage
Please contact your representative in MIT Research Administration Services (RAS) or [email protected] if you have any questions.
- International Activities
NSF defines an international activity as research, training, and/or education carried out in cooperation with foreign counterparts either overseas or in the U.S. using virtual technologies. If a PI is contemplating applying for NSF funding for a project that includes international activity or a subaward to a foreign organization, they should discuss with the appropriate RAS liaison before preparing or submitting a proposal.
For each proposal that describes an international activity, PIs should list the primary countries involved on the proposal cover sheet (a maximum of five countries may be listed). Proposers also should enter the country/countries with which project participants will engage and/or travel to attend international conferences. See Item 8 of NSF 23-1, Chapter II.D .
If payment to a foreign organization is being proposed, including through use of a subaward or consultant arrangement, the proposer also must enter the name of the applicable country(ies) in the International Activities Country Name(s) box described above. See Item 6 of NSF 23-1, Chapter I.E.
Other Information on Recent Policy Changes at NSF
See the MIT Office of the Vice President for Research Foreign Engagement page for recent updates and additional resources regarding foreign engagements.
Portions of the contents of this page were adapted from materials prepared by UCLA Research Policy and Compliance and are provided here with their permission.
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What Is a Disclosure? Definition in Business and How They Work
What is a disclosure explained in plain english.
Disclosure is the process of making facts or information known to the public. Proper disclosure by corporations is the act of making its customers, investors, and any people involved in doing business with the company aware of pertinent information.
Disclosures are at the center of the public's crisis of confidence when it comes to the corporate world. They should be viewed as a very important and informative part of doing business with or investing in a company. This article will define disclosure and show why it's important as it relates to companies and investors.
- Disclosure is the process of making facts or information known to the public.
- Proper disclosure by corporations is the act of making its customers, investors, and analysts aware of pertinent information.
- Companies often place disclosures that protect them in case their financial forecasts are wrong due to changing economic conditions.
- Corporate disclosures also state that investors speak with a financial advisor before investing in the stock since it might not be right for them.
How Disclosures Work
In the investing world, corporations issue disclosures to provide investors and investment analysts with information that could influence an investor's decision whether to buy a company's stock or bonds . The disclosure statement can reveal negative or positive news and financial information about the company.
Investment research reports also disclose the nature of the relationship between the equity analysts, their employer, such as the investment firm, and the company that is the subject of the research report–called the subject company . It also provides critical facts that investors should be aware of, such as warning-like statements.
The Securities and Exchange Commission (SEC) requires that all research reports contain a disclosure statement. If you are reading a research report that does not have a disclosure statement, you should disregard it, as it can not be trusted.
Why Disclosures Are Important
The disclosure is as important to a research report as footnotes are to a corporate financial report. Footnotes are used by corporations to provide investors with details of specific financial line items within the company's financial statements .
Disclosures appear at the end of a research report and usually in very small print, like footnotes to a 10-K , which is a company's annual financial report. It may take a magnifying glass and a strong cup of coffee, but when reading a disclosure, investors should be able to determine who "paid" for the research report and the degree of objectivity that may, or may not, be present.
Disclosures that are written clearly and succinctly help investors to better trust the data and findings being shared in a research report.
Disclosures in Plain English
Unfortunately, disclosure statements are quite often written by lawyers who are more concerned with protecting the brokerage firm than providing easy-to-read information for investors. Lawyers use legal boilerplate clauses that make disclosures verbose and hard to read—hence the need for the strong coffee. Disclosures are often published in small type because they tend to be lengthy.
Below are some of the key points covered, or stated, in most disclaimers:
"This report contains forward-looking statements... actual results may differ from our forecasts."
In plain English, "This is our best guess, but we may be wrong." Companies and investment analysts often forecast revenue , sales, and business development. However, things can change, such as economic conditions could deteriorate. Anytime a company or analyst makes an oral or written statement about the company's future financial performance, it'll typically include a forward-looking statement disclosure.
"This report is based on information from resources that we believe to be correct, but we haven't checked it."
In other words, we may assume that corporate financial statements contain true information about a company's operations, but no analyst can audit a company's books to verify the truth of that assumption. That is the job of the accountants .
"This report is being provided for informational purposes only, and on the condition that it will not form a primary basis for any investment decision."
Equity analysts can't provide investment advice suggesting that investors buy a company's stock. Companies will also use this disclosure. Both analysts and company executives don't know the specific financial situation of investors, such as whether they're a retiree or a millennial.
A retiree, for example, might be better off investing bonds or safe investments. There are many factors that go into an investment decision of whether to buy a stock besides the financial performance of the company. Economic conditions , the investor's risk tolerance , and asset allocation can all impact the decision.
As a result, companies and investment firms often put this disclosure to protect them from appearing that they're suggesting that an investor buy the stock solely on the information in the report.
"Investors should make their own determination of whether or not to buy or sell this stock-based upon their specific investment goals, and in consultation with their financial advisor."
This disclosure is very similar to the previous one and probably is the best bit of advice for a disclaimer. In other words, investors should consider all possible scenarios, including their financial situation and seek the help of a financial adviser in determining whether this stock is good for them.
Nature of Relationship
Investors should look for any conflicts of interest in the disclosure statements by looking for answers to these questions.
- What is the nature of the relationship between the subject company and the brokerage firm?
- Does the firm make a market in the stock and have they done investment banking for the subject company?
Brokerage firms do not produce research reports for free. Historically, income generated from trading, or investment banking, has funded research departments.
- Do the analysts and other members of the firm trade or own shares in the subject company?
It's not necessarily bad that an analyst owns a security that is being touted by the investment firm. However, it's important to disclose this information since stock ownership could impact the analyst's opinion of whether someone should buy the stock.
U.S. Securities and Exchange Commission. " Report on Review of Disclosure Requirements in Regulation S-K ," Page 8.
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Research Security and the Cost of Compliance – Phase I Report, Disclosure Requirements Now Available
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COGR conducted Phase I of the survey described in this report to quantify the considerable time and resources (financial and otherwise) that research institutions have invested (or will invest) to achieve compliance with the Disclosure Requirements. COGR is providing this Phase I report to research institutions and federal research funding agencies in the hope that it will both encourage and facilitate discussions of equitable cost allocation, as well as how “return on investment” (ROI) should be considered and measured.
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FACT SHEET: President Biden Issues Executive Order on Safe, Secure, and Trustworthy Artificial Intelligence
Today, President Biden is issuing a landmark Executive Order to ensure that America leads the way in seizing the promise and managing the risks of artificial intelligence (AI). The Executive Order establishes new standards for AI safety and security, protects Americans’ privacy, advances equity and civil rights, stands up for consumers and workers, promotes innovation and competition, advances American leadership around the world, and more. As part of the Biden-Harris Administration’s comprehensive strategy for responsible innovation, the Executive Order builds on previous actions the President has taken, including work that led to voluntary commitments from 15 leading companies to drive safe, secure, and trustworthy development of AI. The Executive Order directs the following actions: New Standards for AI Safety and Security
As AI’s capabilities grow, so do its implications for Americans’ safety and security. With this Executive Order, the President directs the most sweeping actions ever taken to protect Americans from the potential risks of AI systems :
- Require that developers of the most powerful AI systems share their safety test results and other critical information with the U.S. government. In accordance with the Defense Production Act, the Order will require that companies developing any foundation model that poses a serious risk to national security, national economic security, or national public health and safety must notify the federal government when training the model, and must share the results of all red-team safety tests. These measures will ensure AI systems are safe, secure, and trustworthy before companies make them public.
- Develop standards, tools, and tests to help ensure that AI systems are safe, secure, and trustworthy. The National Institute of Standards and Technology will set the rigorous standards for extensive red-team testing to ensure safety before public release. The Department of Homeland Security will apply those standards to critical infrastructure sectors and establish the AI Safety and Security Board. The Departments of Energy and Homeland Security will also address AI systems’ threats to critical infrastructure, as well as chemical, biological, radiological, nuclear, and cybersecurity risks. Together, these are the most significant actions ever taken by any government to advance the field of AI safety.
- Protect against the risks of using AI to engineer dangerous biological materials by developing strong new standards for biological synthesis screening. Agencies that fund life-science projects will establish these standards as a condition of federal funding, creating powerful incentives to ensure appropriate screening and manage risks potentially made worse by AI.
- Protect Americans from AI-enabled fraud and deception by establishing standards and best practices for detecting AI-generated content and authenticating official content . The Department of Commerce will develop guidance for content authentication and watermarking to clearly label AI-generated content. Federal agencies will use these tools to make it easy for Americans to know that the communications they receive from their government are authentic—and set an example for the private sector and governments around the world.
- Establish an advanced cybersecurity program to develop AI tools to find and fix vulnerabilities in critical software, building on the Biden-Harris Administration’s ongoing AI Cyber Challenge. Together, these efforts will harness AI’s potentially game-changing cyber capabilities to make software and networks more secure.
- Order the development of a National Security Memorandum that directs further actions on AI and security, to be developed by the National Security Council and White House Chief of Staff. This document will ensure that the United States military and intelligence community use AI safely, ethically, and effectively in their missions, and will direct actions to counter adversaries’ military use of AI.
Protecting Americans’ Privacy
Without safeguards, AI can put Americans’ privacy further at risk. AI not only makes it easier to extract, identify, and exploit personal data, but it also heightens incentives to do so because companies use data to train AI systems. To better protect Americans’ privacy, including from the risks posed by AI, the President calls on Congress to pass bipartisan data privacy legislation to protect all Americans, especially kids, and directs the following actions:
- Protect Americans’ privacy by prioritizing federal support for accelerating the development and use of privacy-preserving techniques— including ones that use cutting-edge AI and that let AI systems be trained while preserving the privacy of the training data.
- Strengthen privacy-preserving research and technologies, such as cryptographic tools that preserve individuals’ privacy, by funding a Research Coordination Network to advance rapid breakthroughs and development. The National Science Foundation will also work with this network to promote the adoption of leading-edge privacy-preserving technologies by federal agencies.
- Evaluate how agencies collect and use commercially available information —including information they procure from data brokers—and strengthen privacy guidance for federal agencies to account for AI risks. This work will focus in particular on commercially available information containing personally identifiable data.
- Develop guidelines for federal agencies to evaluate the effectiveness of privacy-preserving techniques, including those used in AI systems. These guidelines will advance agency efforts to protect Americans’ data.
Advancing Equity and Civil Rights
Irresponsible uses of AI can lead to and deepen discrimination, bias, and other abuses in justice, healthcare, and housing. The Biden-Harris Administration has already taken action by publishing the Blueprint for an AI Bill of Rights and issuing an Executive Order directing agencies to combat algorithmic discrimination , while enforcing existing authorities to protect people’s rights and safety. To ensure that AI advances equity and civil rights, the President directs the following additional actions:
- Provide clear guidance to landlords, Federal benefits programs, and federal contractors to keep AI algorithms from being used to exacerbate discrimination.
- Address algorithmic discrimination through training, technical assistance, and coordination between the Department of Justice and Federal civil rights offices on best practices for investigating and prosecuting civil rights violations related to AI.
- Ensure fairness throughout the criminal justice system by developing best practices on the use of AI in sentencing, parole and probation, pretrial release and detention, risk assessments, surveillance, crime forecasting and predictive policing, and forensic analysis.
Standing Up for Consumers, Patients, and Students
AI can bring real benefits to consumers—for example, by making products better, cheaper, and more widely available. But AI also raises the risk of injuring, misleading, or otherwise harming Americans. To protect consumers while ensuring that AI can make Americans better off, the President directs the following actions:
- Advance the responsible use of AI in healthcare and the development of affordable and life-saving drugs. The Department of Health and Human Services will also establish a safety program to receive reports of—and act to remedy – harms or unsafe healthcare practices involving AI.
- Shape AI’s potential to transform education by creating resources to support educators deploying AI-enabled educational tools, such as personalized tutoring in schools.
AI is changing America’s jobs and workplaces, offering both the promise of improved productivity but also the dangers of increased workplace surveillance, bias, and job displacement. To mitigate these risks, support workers’ ability to bargain collectively, and invest in workforce training and development that is accessible to all, the President directs the following actions:
- Develop principles and best practices to mitigate the harms and maximize the benefits of AI for workers by addressing job displacement; labor standards; workplace equity, health, and safety; and data collection. These principles and best practices will benefit workers by providing guidance to prevent employers from undercompensating workers, evaluating job applications unfairly, or impinging on workers’ ability to organize.
- Produce a report on AI’s potential labor-market impacts , and study and identify options for strengthening federal support for workers facing labor disruptions , including from AI.
Promoting Innovation and Competition
America already leads in AI innovation—more AI startups raised first-time capital in the United States last year than in the next seven countries combined. The Executive Order ensures that we continue to lead the way in innovation and competition through the following actions:
- Catalyze AI research across the United States through a pilot of the National AI Research Resource—a tool that will provide AI researchers and students access to key AI resources and data—and expanded grants for AI research in vital areas like healthcare and climate change.
- Promote a fair, open, and competitive AI ecosystem by providing small developers and entrepreneurs access to technical assistance and resources, helping small businesses commercialize AI breakthroughs, and encouraging the Federal Trade Commission to exercise its authorities.
- Use existing authorities to expand the ability of highly skilled immigrants and nonimmigrants with expertise in critical areas to study, stay, and work in the United States by modernizing and streamlining visa criteria, interviews, and reviews.
Advancing American Leadership Abroad
AI’s challenges and opportunities are global. The Biden-Harris Administration will continue working with other nations to support safe, secure, and trustworthy deployment and use of AI worldwide. To that end, the President directs the following actions:
- Expand bilateral, multilateral, and multistakeholder engagements to collaborate on AI . The State Department, in collaboration, with the Commerce Department will lead an effort to establish robust international frameworks for harnessing AI’s benefits and managing its risks and ensuring safety. In addition, this week, Vice President Harris will speak at the UK Summit on AI Safety, hosted by Prime Minister Rishi Sunak.
- Accelerate development and implementation of vital AI standards with international partners and in standards organizations, ensuring that the technology is safe, secure, trustworthy, and interoperable.
- Promote the safe, responsible, and rights-affirming development and deployment of AI abroad to solve global challenges, such as advancing sustainable development and mitigating dangers to critical infrastructure.
Ensuring Responsible and Effective Government Use of AI
AI can help government deliver better results for the American people. It can expand agencies’ capacity to regulate, govern, and disburse benefits, and it can cut costs and enhance the security of government systems. However, use of AI can pose risks, such as discrimination and unsafe decisions. To ensure the responsible government deployment of AI and modernize federal AI infrastructure, the President directs the following actions:
- Issue guidance for agencies’ use of AI, including clear standards to protect rights and safety, improve AI procurement, and strengthen AI deployment.
- Help agencies acquire specified AI products and services faster, more cheaply, and more effectively through more rapid and efficient contracting.
- Accelerate the rapid hiring of AI professionals as part of a government-wide AI talent surge led by the Office of Personnel Management, U.S. Digital Service, U.S. Digital Corps, and Presidential Innovation Fellowship. Agencies will provide AI training for employees at all levels in relevant fields.
As we advance this agenda at home, the Administration will work with allies and partners abroad on a strong international framework to govern the development and use of AI. The Administration has already consulted widely on AI governance frameworks over the past several months—engaging with Australia, Brazil, Canada, Chile, the European Union, France, Germany, India, Israel, Italy, Japan, Kenya, Mexico, the Netherlands, New Zealand, Nigeria, the Philippines, Singapore, South Korea, the UAE, and the UK. The actions taken today support and complement Japan’s leadership of the G-7 Hiroshima Process, the UK Summit on AI Safety, India’s leadership as Chair of the Global Partnership on AI, and ongoing discussions at the United Nations. The actions that President Biden directed today are vital steps forward in the U.S.’s approach on safe, secure, and trustworthy AI. More action will be required, and the Administration will continue to work with Congress to pursue bipartisan legislation to help America lead the way in responsible innovation. For more on the Biden-Harris Administration’s work to advance AI, and for opportunities to join the Federal AI workforce, visit AI.gov .
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FTC Amends Safeguards Rule to Require Non-Banking Financial Institutions to Report Data Security Breaches
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The Federal Trade Commission has approved an amendment to the Safeguards Rule that would require non-banking institutions to report certain data breaches and other security events to the agency.
The FTC’s Safeguards Rule requires non-banking financial institutions, such as mortgage brokers, motor vehicle dealers, and payday lenders, to develop, implement, and maintain a comprehensive security program to keep their customers’ information safe . In October 2021 , the FTC announced it had finalized changes to the Safeguards Rule to strengthen the data security safeguards that financial institutions are required to put in place to protect their customers’ financial information. The FTC also sought comment on a proposed supplemental amendment to the Safeguards Rule that would require financial institutions to report certain data breaches and other security events to the Commission.
“Companies that are trusted with sensitive financial information need to be transparent if that information has been compromised,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The addition of this disclosure requirement to the Safeguards Rule should provide companies with additional incentive to safeguard consumers’ data.”
The amendment announced today requires financial institutions to notify the FTC as soon as possible, and no later than 30 days after discovery, of a security breach involving the information of at least 500 consumers. Such an event requires notification if unencrypted customer information has been acquired without the authorization of the individual to which the information pertains. The notice to the FTC must include certain information about the event, such as the number of consumers affected or potentially affected.
The breach notification requirement becomes effective 180 days after publication of the rule in the Federal Register.
The Commission voted 3-0 to publish the notice amending the Safeguards Rule in the Federal Register.
The lead staffers on this matter are David Lincicum and Mark Eichorn in the FTC’s Bureau of Consumer Protection.
The Federal Trade Commission works to promote competition and protect and educate consumers . Learn more about consumer topics at consumer.ftc.gov , or report fraud, scams, and bad business practices at ReportFraud.ftc.gov . Follow the FTC on social media , read consumer alerts and the business blog , and sign up to get the latest FTC news and alerts .
Juliana Gruenwald Henderson Office of Public Affairs 202-326-2924
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Internal emails show SEC coordinated climate disclosure rules with AI firm set to financially benefit
Newly uncovered information 'highlights troubling potential ethics violations of sec employees,' says will hild of the group consumers' research.
Republicans launch full offensive on SEC's Gary Gensler over climate disclosure proposal
FOX Business senior correspondent Charlie Gasparino reports top GOP members are demanding Gary Gensler comply with their request for more information on the SEC's climate change proposal on 'The Claman Countdown.'
FIRST ON FOX: A former lead counsel at the Securities and Exchange Commission (SEC) coordinated with a private firm to craft pending climate disclosure rules which the firm is set to financially benefit from, according to internal communications obtained by FOX Business.
Kristina Wyatt — the SEC's former senior counsel for climate and ESG to the director of the Division of Corporation Finance — actively coordinated with Tempe, Arizona-based climate software developer Persefoni while helping develop the disclosure regulations, which were ultimately unveiled in March 2022. After coordinating with Persefoni on the rules, Wyatt departed the SEC and joined Persefoni as a top executive where she counsels clients on "evolving ESG disclosure requirements."
"She's working for a company that, when this rule is finalized, is ostensibly going to have an absolute gold rush of clientele and basically a captive audience," said Will Hild, the executive director of Consumers' Research, an advocacy group that analyzed the internal SEC emails revealing how the pending disclosure rules were developed behind the scenes.
"All of a sudden, all of corporate America, every publicly-listed company, is suddenly going to need this software in order to stay in compliance with SEC," Hild told FOX Business in an interview. "So, she helped write the rule that created the demand for the product at the company that she left to go work at."
BIDEN'S SEC CHAIRMAN HAS SEEN HIS NET WORTH SKYROCKET IN RECENT YEARS AMID GOVERNMENT SERVICE
SEC Chairman Gary Gensler participates in a meeting of the Financial Stability Oversight Council at the Treasury Department on July 28, 2023. (Kevin Dietsch/Getty Images / Getty Images)
The emails and attachments were obtained in litigation by Energy Policy Advocates, a federal watchdog group that has filed a dozen FOIA lawsuits to obtain information from the SEC. Consumers' Research then compiled and analyzed the emails.
Persefoni is an artifical intelligence startup founded in 2020 whose main product is the so-called Climate Management & Accounting Platform (CMAP), which enables businesses, financial institutions and government agencies the "software fabric" for managing their climate-related data, disclosures and performance.
In March 2022, the SEC, the nation's lead financial regulator, proposed the climate disclosure rules requiring publicly-listed companies to share climate-related information including their own direct and indirect carbon emissions, requirements that Republicans said would create substantial new costs. SEC Chairman Gary Gensler, who President Biden appointed in 2021, recently said his agency is expected to finalize the rules in the coming weeks.
TOP REPUBLICANS DOUBLE DOWN ON EFFORTS TO REIN IN SEC GENSLER'S CLIMATE PROPOSAL
"The SEC has no role as to climate risk itself. We, however, do have an important role in helping to ensure that public companies make full, fair, and truthful disclosure about the material risks they face," Gensler said during a House Financial Services Committee hearing in September.
"Thus, in fulfilling the Commission’s important role, we put out for comment a proposal about climate-related disclosure to bring consistency and comparability to such disclosures."
He added the SEC remains "merit neutral" and that investors ultimately decide what investments they make and risks they take "based upon those disclosures."
The Securities and Exchange Commission is expected to soon finalize the climate disclosure rules, which it first proposed in March 2022. (Evelyn Hockstein-Pool/Getty Images / Getty Images)
As a result of the proposal and eventual finalized rule, Persefoni stands to gain a significant number of new CMAP clients who will, under the new disclosure requirements, need a software to track wide-ranging climate data . In August, the Arizona company announced it had received $50 million in seed funding, and the company has a posted number of resources on its website about how companies can begin preparing for the SEC rules.
However, according to the emails and information reviewed by FOX Business, Persefoni first contacted Wyatt, the former lead SEC counsel, in September 2021 to engage about the agency's formulation of the disclosure rules. In the weeks following, Persefoni then met with SEC staff, including Mika Morse, Gensler's policy counsel, to discuss data for informing the cost of preparation of green house gas emissions reports.
BLACKROCK TURNED DOWN RECORD NUMBER OF CLIMATE PROPOSALS AMID INFLATION, ESG PUSHBACK
Wyatt continued to engage with Persefoni and, at one point in October 2021, told the company's senior vice president Mike Wallace that she had told other officials in the federal government about its platform.
"I mentioned Persefoni to some others in the government working on a project that relates to the costs of reporting and heard back that you're meeting with the [Environmental Protection Agency] next week," Wyatt told Wallace in the Oct. 2, 2021, email. "That's good."
Wallace responded that the virtual meeting went well and that, in addition to the EPA , officials from the Department of Defense, White House Office of Management and Budget, and General Services Administration also participated. He noted he had also engaged with the White House Council on Environmental Quality.
An initial exchange between Kristina Wyatt and Persefoni executives occurs in September 2021. Wyatt then invites other government officials to join in a meeting with the company weeks later. (Consumers' Research / Fox News)
Additional emails involving Yogin Kothari, a lobbyist at the firm Boundary Stone Partners which represents Persefoni, further referenced an October 2021 meeting between the SEC and Persefoni, where the "concept of the [cost] study" was discussed. Further communications reveal two more meetings, both in November 2021, between the SEC and Persefoni.
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"During the meeting, the representatives from Persefoni presented estimated ranges of costs based on their experience working with corporations that voluntarily initiate a GHG emissions disclosure program," Morse, Gensler's policy counsel who attended the meetings, wrote in an internal memo following a Nov. 30, 2021, meeting with Persefoni.
"They also provided an analysis of which S&P 500 companies that make climate-related disclosures and set GHG emissions reduction targets," Morse added. "The Persefoni team followed up the meeting by sending an email answering several questions that the SEC staff asked during the call."
Then, the emails showed, Wyatt emailed Wallace, the Persefoni executive she had been in contact with, in January 2022 thanking him for taking the time to speak with her earlier, adding that "Persefoni is clearly very exciting" and that the company is doing "such important work."
Persefoni's Kristina Wyatt, left, discusses the SEC proposed climate disclosure rule during an interview in July 2022. (GreenBiz/YouTube/Video screenshot / Fox News)
"If we do end up working together I am sure we will have great fun and work to make the world a better place for all those generations to come," she wrote to Wallace, an apparent reference to joining Persefoni.
After Wallace responded that the calls were "always a pleasure," Wyatt said in a follow-up email that she was "thrilled to be joining you!"
Five days after the email exchange, on Jan. 24, 2022, Wyatt filled out an SEC employee exit form and departed the agency. The form listed her destination as "unknown."
CONSUMER GROUP LAUNCHES CAMPAIGN TARGETING ENERGY COMPANY PUSHING ESG MEASURES
On March 7, 2022, just weeks before the SEC issued the climate disclosure rule proposal , Persefoni announced Wyatt had been hired as the company's deputy general counsel and senior vice president of global regulatory climate disclosure. The company said she would be responsible for helping ensure "that companies and their investors have the proper tools to measure, manage and report on their carbon emissions."
"The sustainability challenges that the world faces are complex and daunting, and data is the single most critical aspect in addressing the climate crisis," Wyatt said in a statement at the time. "Persefoni is addressing the single greatest impediment to progress in minimizing climate change, and offers the best technology that puts reliable, actionable data in companies', investors' and governments' hands to help them on their ESG journey and commitments."
"I am thrilled to join Persefoni's industry-leading team and continue to forge meaningful change in helping organizations across the globe seek their carbon truth, identify new ways to operate and overall reduce their impact on the environment," she continued.
SEC's Kristina Wyatt exchanges emails with Persefoni Senior Vice President Mike Wallace about potentially joining the company, days before she ultimately departed the SEC. (Consumers' Research / Fox News)
Earlier this year, Persefoni announced Wyatt had been promoted to be the company's chief sustainability officer.
"The SEC seeks input from a wide array of market participants on all its rulemakings," an SEC spokesperson told FOX Business. "As it relates to the climate disclosure rule, the Commission placed all the sources it used in proposing the rule in the proposing release and asked for public comment."
"That transparency and opportunity for public comment is how rulemaking is supposed to work," they continued. "Indeed, the Commission received more than 16,000 comments on the benefits and costs of all aspects of the proposal. Any final rule would also cite information and the sources for information on which the Commission relied."
The spokesperson added that when SEC employees depart the agency, they "join law firms, trade associations, nonprofits, academic institutions, other parts of the government, or any number of places."
A spokesperson for the Securities and Exchange Commission tells FOX Business it seeks comment from a wide range of stakeholders and that its employees regularly depart for "any number of places." (REUTERS/Andrew Kelly/File Photo / Reuters)
After analyzing the information on Persefoni's involvement in crafting the SEC disclosure rules, Consumers' Research assembled a report, which it shared with the House Financial Services Committee. Hild penned a letter Thursday to the committee's Chairman Patrick McHenry, R-N.C., saying he hoped the report would "aid your committee in investigating the unethical and perhaps illegal interaction between SEC officials and private businesses that helped justify, promote, and implement a radical climate agenda."
REPUBLICAN STATES TAKE DRASTIC MEASURE IN LATEST SALVO AGAINST ESG MOVEMENT
"Simply put, Persefoni has a direct conflict of interest in its advocacy. The company will bear no additional operating costs if the proposed SEC climate disclosure rule goes into effect, but instead stands to reap a massive windfall, as the demand for their sole product (carbon accounting) skyrockets because of the new rule," Hild wrote to McHenry in the letter obtained by FOX Business.
"This report highlights troubling potential ethics violations of SEC employees, like former SEC Counsel on Climate and ESG Kristina Wyatt, who worked directly with Persefoni during this rulemaking process and then left the Commission to join Persefoni, a move that emails show was fully expected before her departure from the SEC," he continued.
House Financial Services Oversight and Investigations Subcommittee Chairman Bill Huizenga, R-Mich., is seen during a 2018 hearing on Capitol Hill. (Zach Gibson/Bloomberg via Getty Images / Getty Images)
In a statement, Rep. Bill Huizenga, R-Mich., who chairs the Financial Services Committee's oversight and investigations subcommittee, said the information Consumers' Research obtained would accelerate his panel's oversight of the SEC's disclosure rule.
CLICK HERE TO READ MORE ON FOX BUSINESS
"The Consumers’ Research report seems to confirm the fears of those facing the impact of the climate rule — that it was crafted without meaningful input from industry, much less average Americans," Huizenga, R-Mich., told FOX Business.
"It is clear the SEC does not have adequate economic data to support its work, and is heavily relying on a small, hand-picked group to justify its proposed climate rule," Huizenga continued. "We have been investigating the agency’s climate rule since the beginning of this Congress and this report highlights how important it is that the SEC cooperate with our ongoing investigation."
Persefoni declined to comment.
Michigan lawmakers introduce disclosure report bills with Proposal 1 deadline looming
With the deadline looming to implement new financial disclosure reports for Michigan politicians, state lawmakers held their first legislative hearing Wednesday on bills to enact the requirements voters approved last year.
A bipartisan group of lawmakers in the state Senate introduced legislation to implement Proposal 1 one day before hearing testimony on the bills. Legislation must be enacted by Dec. 31 under the constitutional amendment adopted by voters.
State Sen. Ed McBroom, R-Waucedah Township — who has long advocated for transparency and ethics changes and sponsored one bill in the package — said he wished lawmakers had begun the work earlier. "I don't think we should pat ourselves too hard on the back today given it's October and we should have brought these bills forward in January," he testified before the Senate Oversight Committee.
Michigan and Idaho are the only two states in the country that don't subject lawmakers to financial disclosure requirements according to the Center for Public Integrity . But voters in Michigan passed a constitutional amendment to change that in 2022. Proposal 1 requires the state Legislature to adopt legislation making every state lawmaker, the governor, the lieutenant governor, the secretary of state and the attorney general file annual financial disclosure reports.
State Sen. Jeremy Moss, D-Southfield, celebrated the legislation to carry out the will of voters, describing it as a key first step after decades of inaction in Lansing to improve transparency. "Is there more we can do? Absolutely," he testified. "Our Prop 1 legislation is not an end but a long overdue beginning to finally implementing transparency laws."
Secretary of State Jocelyn Benson urged lawmakers to go further. She and others have long called for moving Michigan "from worst to first" on various government transparency and ethics measures. "These bills on their own would not take us there," she testified.
Proposal 1: Last year's most popular constitutional amendment
Michigan lawmakers saved legislative action on the most popular ballot proposal approved by voters for last. Proposal 1 passed with the support of 66% of Michigan voters in last year's election, a wider margin than the abortion and voting rights proposals also on the ballot in the 2022 midterm. Earlier this year, the Democratically-controlled Legislature passed bills aimed at updating state laws to reflect the changes voters approved in those other two ballot measures before turning to the financial disclosure amendment this week.
Before it appeared on the ballot, lawmakers weakened the financial disclosure requirements sponsors included in their original proposal. If lawmakers miss the end of the year deadline for enacting legislation spelling out how politicians must file financial disclosures, any Michigan resident can sue the state Legislature and the governor in the Michigan Supreme Court to enforce the requirements of the constitutional amendment.
What Proposal 1 requires
Michigan voters changed to state constitution to require annual financial disclosures from state lawmakers and top statewide officeholders starting next April that must include the following:
- "Description of assets and sources of unearned income."
- "Sources of earned income."
- "Description of liabilities."
- "Positions currently held as an officer, director, trustee, partner, proprietor, representative, employee, or consultant of any organization, corporation, firm, partnership, or other business enterprise, nonprofit organization, labor organization, or educational or other institution other than the state of Michigan."
- "Agreements or arrangements with respect to future employment, a leave of absence while serving as a legislator or state officer, continuation or deferral of payments by a former or current employer other than the state of Michigan, or continuing participation in an employee welfare or benefit plan maintained by a former employer."
- "Gifts received and required to be reported by a lobbyist or lobbyist agent, as prescribed by state law."
- "Travel payments and reimbursements received and required to be reported by a lobbyist or lobbyist agent, as prescribed by state law."
- "Payments made by a lobbyist or lobbyist agent to a charity in lieu of honoraria."
What recently introduced legislation proposes
Senate Bill 613 introduced Tuesday would require state lawmakers and top statewide officeholders to disclose income, assets, stocks, bonds, other securities and property with a value of $1,000 or more as well as a list of liabilities exceeding $10,000.
Nicholas Pigeon, the executive director of the Michigan Campaign Finance Network, said it's not clear that politicians would have to attach specific dollar amounts to each source of earned and unearned income. That would make the legislation weaker than the laws in place in most other states. "Theoretically, it would be a larger conflict of interest if they have more to gain," he told the Free Press.
In addition to the reporting requirements in Proposal 1, Senate Bill 613 introduced Tuesday would require state lawmakers and top statewide officeholders to disclose the name and occupation of their spouses. But while politicians would have to disclose the name of any employers, they would not have to do the same for their spouses under the proposed reporting requirements.
Benson told lawmakers that the legislation currently creates too many loopholes for spouses. If lawmakers want to expand financial disclosure to encompass spouses, they should create a more meaningful requirement or none at all, Benson said.
The legislation would require politicians to disclose stocks, bonds or other forms of securities they hold jointly with their spouse.
Former state Rep. David LaGrand, D-Grand Rapids, told lawmakers he's deeply troubled by the exclusion of spousal asset reporting requirements. In theory, it would allow politicians to transfer assets to their spouses to avoid disclosure, he said. "If you don't do parallel disclosure requirements for spouses and for dependents, you are making a hole in this legislation which will invalidate the will of the people, the intent of this legislation and it will be a hole that you can drive the Titantic through," he said.
Senate Bill 614 would extend the reporting requirements under Proposal 1 and those proposed in Senate Bill 615 to candidates for public office.
Paid leave in Michigan: Legislation would give workers 15 weeks paid family leave
After the first 10 business days past the disclosure filing deadline, the legislation proposes a $25 late filing fee for each business day a politician fails to submit their report with a maximum penalty of $500. It proposes a maximum $1,000 civil fine for a politician who "knowingly files an incomplete or inaccurate report."
Senate Bills 615 and 616 would update Michigan's campaign finance law to allow the use of a candidate's campaign committee to pay a late filing fee.
State Sen. Sam Singh, D-East Lansing, who chairs the Senate Oversight Committee, said that lawmakers would consider possible changes to the legislation before planning to report the bills to the full Senate for a vote.
Contact Clara Hendrickson at [email protected] or 313-296-5743. Follow her on X, previously called Twitter, @clarajanehen.
ESG Reporting / Government / Regulators
Brazil to Require Mandatory Sustainability Reporting from 2026
Public companies in Brazil will be required to provide annual sustainability and climate-related disclosures, starting in 2026, according to a new announcement from Brazil’s Securities and Exchange Commission (CVM) and Ministry of Finance.
According to the CVM, the new reporting requirements will be based on the recently published sustainability and climate-related disclosure standards issued by the IFRS Foundation’s International Sustainability Standards Board (ISSB). The ISSB was launched in November 2021 at the COP26 climate conference, with the goal to develop IFRS Sustainability Disclosure Standards, driven by demand from investors, companies, governments and regulators to provide a global baseline of disclosure requirements enabling a consistent understanding of the effect of sustainability risks and opportunities on companies’ prospects.
Brazil is the latest in a series of jurisdictions to announce the adoption of the new standards, with recent announcements by the UK and Australia . In July, IOSCO, the leading international policy forum and standards setter for securities regulators called on regulators to incorporate the standards into their sustainability reporting regulatory frameworks.
Following the CVM’s announcement, ISSB Chair Emmanuel Faber said:
“We continue to hear strong support for the ISSB’s Standards from regulators globally and I commend the Brazilian Ministry of Finance and Comissão de Valores Mobiliários for providing clarity to companies and investors in Brazil by setting out a clear roadmap towards mandatory adoption.”
The new reporting requirements for part of Brazil’s Ecological Transformation Plan, the country’s strategy, launched earlier this year aimed at driving the transition to a green economy, which also includes $350 billion in planned public and private infrastructure investment.
According to the CVM, public companies and investment funds will be able to begin sustainability reporting following the IFRS standards in 2024 on a voluntary basis, with mandatory reporting to begin for public companies in 2026. From 2027, sustainability reporting will be required within three months after the end of the fiscal year, or simultaneously with the release of financial statements, whichever occurs first.
The CVM added that the new reporting requirements will help global investors to assess risks and opportunities, reduce information costs and optimize the allocation of capital, as well as to enable decisions aligned with sustainable and responsible values.
Brazil’s Minister of Finance Fernando Haddad said:
“This will generate a virtuous cycle of greater transparency and commitment, allowing the possibility of measuring the issue, because there needs to be a global institutional metric, so that the market is global.”
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