* Large financial firms' disclosures eyed
* Rule change on disclosures delayed
By Dena Aubin
NEW YORK, Nov 16 (Reuters) - The U.S. Securities and Exchange Commission is asking for better disclosure from companies on potential costs of lawsuits and other contingencies, an official of the agency said on Tuesday.
"We see companies having pages and pages of information but saying very little," Wayne Carnall, chief accountant at the division of corporation finance, said at a conference sponsored by Financial Executives International in New York.
Companies should be providing estimates of reasonable losses, but some large settlements were reached without any prior disclosures, he said.
The increased scrutiny follows a jump in federal securities lawsuits seeking class-action status in recent years, partly due to the credit and financial crisis.
The number of such lawsuits is projected to reach 202 this year, down from a recent peak of 248 in 2008, but well above the 131 filed in 2006 before the crisis took hold, according to NERA Economic Consulting.
The SEC originally focused on large financial firms, but more companies will be questioned about their disclosures for loss contingencies, Carnall said.
"I can certainly appreciate if somebody files a lawsuit against a company, that a week or two later they will not be in a position to estimate (losses)," Carnall said. "I will be far more skeptical as time goes on."
The Financial Accounting Standards Board, which sets accounting rules for U.S. companies, in July proposed tighter rules on disclosures for contingencies, though it has since delayed that project.
Acting FASB chair Leslie Seidman said at the financial executives conference on Monday that her group wants to be sure the problem is not lack of compliance with existing rules.
The goal of the rule change was to provide investors more timely information, she said.
"The concern that we were hearing was, 'too little too late,'" she said. "In other words, there were too many surprises for investors in this area."
FASB's proposal drew strong opposition from corporate lawyers, who said more detailed information about amounts set aside for lawsuits could fuel litigation or hamper defenses.
"Once a company has disclosed the specific amount accrued for a litigation contingency, no plaintiff would rationally settle for a lower amount," the Association for Corporate Counsel, a group representing corporate legal departments, said in a letter to the FASB.
Carnall said he believes companies can comply with existing standards without prejudicing their case. For example, they can disclose aggregate amounts rather than disclose amounts case-by-case, he said. (Reporting by Dena Aubin; Editing by Phil Berlowitz)