Disclosure Procedure

Each year, U.S. public companies spend millions of people-hours producing the securities disclosures that undergird public capital markets. But relatively little is known about how firms produce such consequential information, including whether they are spending too much, too little, or just enough on disclosure procedures. Failures of these procedures – from the inclusion of outright falsehoods to inartful drafting – can render a firm’s disclosures misleading, potentially causing investor losses. Of course, those failures can also lead to substantial costs for firms themselves in the form of securities litigation or government investigations. All equal, higher-quality procedures would be expected to … Read more