This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Conflict Minerals Act: Good Start Or Bad Law?

The Conflict Minerals Act: Good Start or Bad Law?Last August brought the long-awaited finalization of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which details the rules and regulations under which manufacturers must disclose their use of conflict minerals. Implementation of the new regulations kicked off on January 1, 2013, and the first calendar-year “conflict mineral” reports are due on May 31, 2014. But while the regulations are a step toward curbing the the use of conflict minerals in manufactured products — most notably electronic devices such as smartphones and tablets — they are broad and leave gaping holes that are ripe for exploitation.

Under the regulations, companies that have determined that conflict minerals sourced from countries like the Democratic Republic of the Congo — which is plagued by violent, armed militia groups intent on exploiting the area's natural resources — are “necessary to the functionality or production” of one or more of their products must file a report with the US Securities and Exchange Commission (SEC).

Companies that contract out the manufacturing of products (or components) that contain conflict minerals can circumvent the required disclosure if it is deemed that the company holds no influence over the item being contracted. A company does not qualify as having influence over the manufacturing of a product if it is simply stamping its brand on the product or if it merely services a product manufactured by a third party, according to the SEC.

Essentially, if a company hands over control of the manufacturing of any component of its product, the disclosure of the materials used by the manufacturer is unnecessary. What, then, is to stop companies from outsourcing the manufacturing of their products in order to bypass SEC regulations?

1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $92.63 -0.65%
FB $118.16 0.30%
GOOG $704.79 0.48%
TSLA $209.57 -0.93%
YHOO $36.85 -0.24%


Chart of I:DJI
DOW 17,590.58 -70.13 -0.40%
S&P 500 2,042.16 -8.47 -0.41%
NASDAQ 4,689.8610 -27.2330 -0.58%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs