'Toxic Stock Syndrome' Report: Many Companies Are Keeping Shareholders in the Dark...

'Toxic Stock Syndrome' Report: Many Companies Are Keeping Shareholders in the
Dark on Potential Recalls, Bans, and Other Risks

SEC Filings Show Companies Silent on Known Risks of Lead Paint in Products
Sourced in China, Asthma Risk From Products, Expected Future Bans in Europe

WASHINGTON, April 17 /PRNewswire/ -- Based on a review of SEC filings,
including detailed analysis of individual company annual reports for 2006 and
2007, major industrial and other sectors affected by product toxicity risks
are doing a poor job of informing shareholders of market risks they face due
to toxic chemicals in their products, according to a new study released today
by the Investor Environmental Health Network (IEHN), a collaboration of
investment managers with more than $41 billion in assets.

IEHN's report, Toxic Stock Syndrome: How Corporate Financial Reports Fail to
Apprise Investors of the Risks of Product Recalls and Toxic Liabilities, was
based on searches through thousands of SEC filings, and detailed review of
more than 25 companies' reports. The report examines disclosures on supply
chain weaknesses before and after the 2007 toy recalls due to lead paint, on
scientific studies showing products causing asthma, potential health risks of
nanotechnology, and on the new European chemical regulatory program, "REACH"
(Registration, Evaluation, Authorisation and Restriction of Chemicals)

According to the report's lead author, Attorney Sanford Lewis, "Our analysis
shows that the managers of these companies know much more about these product
toxicity risks than they are choosing to share with investors. The companies
are not engaging in timely investor disclosure of financially important
information on product toxicity risks."

Lewis said that the lack of disclosure "means that many of these companies are
likely to be vulnerable to shareholder suits and SEC enforcement actions for
failure to comply with the Securities Laws."

By type of risk, key findings of the report include the following:

-- Toy recalls. Toy makers did not disclose what they knew about lead paint
risks. Prior to 2007's recalls of leaded toys, neither Mattel nor Thomas the
Tank manufacturer RC2 warned investors of a tide of Chinese product recalls
dating back as far as 2001; Mattel's shareholder disclosures of lead paint
problems with its own toys lagged by weeks internal company knowledge of such
problems.

-- Likely or possible European bans. Among 10 chemical company filings
reviewed in detail, none provide meaningful quantitative data on the numbers
of their products or proportions of sales that may be locked out of European
markets under Europe's new, stringent chemical authorization requirements.
Based on electronic review of filings in the SEC's database, the report
demonstrates that most companies that sell products to Europe - from paint and
cleaning products, to toys and cosmetics - appear to be glossing over or
ignoring major requirements that go into effect this year to preregister the
contents of their products in European markets.

-- Asthma risks. Companies are not disclosing to shareholders the potential
for their products to cause or exacerbate asthma. The report notes Dow
Chemical and Procter & Gamble as two companies which sell products containing
chemicals evidenced to cause or exacerbate asthma, and which are not
disclosing these risks to investors.

-- Nanotechnology. Manufacturers are not disclosing the evidence of health
risks of nanotech products, nor the lack of adequate product testing prior to
their sales. While some nanomaterials manufacturers disclose potential
uncertainties, users of the materials in an array of products from electronics
to cosmetics are not disclosing the potential health and financial risks, even
though some of these products, known as nanotubes, have been found by
scientists to resemble asbestos fibers in structure and respiratory health
effects.

Shareholders are working to address some of these disclosure shortcomings in
the current Annual Meeting season. A shareholder resolution filed by Trillium
Asset Management at Dow Chemical Company, to be voted at Dow's annual meeting
on May 15, notes that approximately half of Dow's pesticide products (73 of
149) may be linked to asthma and other respiratory problems. It asks the
company to establish an independent panel to examine this issue and to report
on possible actions to phase out or restrict these materials. Dow does not now
disclose such risks to shareholders. The company has responded to the
resolution by contending that such an assessment is more appropriately done by
regulators than by the company. Dow is basically acknowledging that it will
defer to regulators instead of acting proactively on these product toxicity
concerns, a potential red flag for Dow investors.

A shareholder resolution filed by Calvert Asset Management Company, Inc, to be
voted at Avon's annual meeting on May 1, asks the company to report to
shareholders on Avon's product categories containing nanomaterials, and to
discuss any new initiatives or actions, aside from regulatory compliance, that
management is taking with regard to the issues raised by nanomaterials. The
company has not disclosed any hazards of nanotech used, and has asserted the
safety of its use of nanoparticles in sunscreen, despite significant gaps in
the state of scientific knowledge on sunscreen nanoparticle safety when used
with injured, broken or sunburned skin, for instance.

Additionally, the report notes that DuPont has been forced by consumer demand
to phase out the use of its controversial chemical, PFOA, despite its ongoing
assertions in its financial reports that PFOA does not harm human health.
According to the report authors, DuPont has continually failed to provide
shareholders with a balanced presentation of what is known to science
regarding PFOA hazards.

The report concludes with recommendations to companies, investors, and the
SEC, including the following:

-- Companies should provide to shareholders additional information on chemical
supply chain issues, including sources of materials, risk areas, and control
systems.

-- Investors should press for better disclosure from companies, through direct
correspondence and support of shareholder resolutions seeking such disclosure.

-- The SEC should issue new guidance to companies requiring them to more
specifically report their product lines vulnerable to Europe's REACH
regulation and should report more fully on credible adverse scientific
findings that may impact the company.

Some of the corporate disclosures reviewed in the report:

Toy Manufacturers
RC2
Mattel

Nanotechnology Manufacturers
Arrowhead Research Corporation
Luna Innovations
Nano-Proprietary, Inc.
CVD Equipment Corporation
NaturalNano, Inc.

Nanotechnology Users
Avon Products
Procter & Gamble Company

Chemical Producers regarding European REACH program
Dow Chemical Company
Hercules Chemical Company
FMC Corporation
Rohm and Haas
Celanese
Huntsman Corporation
Arch Chemicals
Chemtura Corporation
Cytec
Sealed Air Corporation

Chemical Users regarding REACH disclosures
PPG Industries
Ferro Industries

Chemical Companies regarding other issues
Dow Chemical Company (disclosure on pesticides/asthma)
DuPont (disclosure on PFOA)

The full report is available online at
http://iehn.org/publications.reports.toxicstock.php.

ABOUT IEHN

The Investor Environmental Health Network (http://www.iehn.org) is a
collaboration of investment managers encouraging companies to adopt "safer
chemicals" policies for products, to enhance shareholder value. IEHN
participants manage more than $41 billion in assets.

SOURCE Investor Environmental Health Network, Falls Church, VA

Patrick Mitchell, +1-703-276-3266, pmitchell@hastingsgroup.com, for Investor
Environmental Health Network, Falls Church, VA