Do Firms Redact Information from Material Contracts to Conceal Bad News?

The Securities and Exchange Commission (SEC) regulates and monitors companies to increase transparency and protect investors. The securities laws consider the companies’ interests and allow them to make requests to redact certain information in SEC filings and not publicly disclose such information for a specified period of time, if the information is both proprietary and immaterial to investors – proprietary in the sense that disclosure may reveal trade secrets or information about profitability that harms companies’ competitiveness. There has been an overall uptick in confidential treatment requests in recent years.

Although prior studies provide evidence that companies use redactions to … Read more