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SEC Should Keep Close Eye on HP, Whitman

Some information provided during this call may include forward-looking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of HP may differ materially from those expressed or implied by such forward-looking statements and assumptions.

That standard fare, straight from the Webcast of HP's Nov. 20 Q4 2012 earnings conference call, goes on to say what amounts to if we get it wrong, it was a big "oops" because you can never be sure about these things, and by the way, we're under no obligation to update our incredibly optimistic guidance, even if it is about to blow up.

At day's end, the SEC lets companies such as RIM and HP off the hook. They allow them to issue long-term guidance on the basis of hopes, prayers, shaky assumptions and poor visibility.

No consequences exist. No remedies for shareholders other than the ambulance-chasing, post-earnings miss class action lawsuits that rarely turn into much.

It's easy to blame the shareholder for buying RIMM or HPQ on the confidence of management vis-a-vis guidance, but that's an irrelevant point. Words from executives influence decisions, good or bad. As such, investors deserve tighter regulatory controls.

The IRS doesn't give individuals this much leeway when they prepare their tax returns. Why then does the SEC provide company executives wiggle room when they float guidance?

RIM was wrong about it's guidance. For all I know, HP might end up being right. But, if they're not, the shareholder who thought he or she was buying "value" on the notion of $3.40 to $3.60 full-year EPS has absolutely no recourse.

And unaccountable CEOs such as Whitman have absolutely nothing to lose.

-- Written by Rocco Pendola in Santa Monica, Calif.
Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.
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