Partners Michael P. Canty and Francis P. McConville, along with Of Counsel William Schervish and Associate Roger W. Yamada, are the authors of the Investor Alert, “From 10-Q to 10-H? The Push for Less Frequent SEC Reporting.”  This alert examines the recent push for less frequent SEC reporting and assesses the potential ramifications that a rule change would have on companies, investors, and the securities markets.

Providing an overview on the evolution of financial reporting in the U.S.—from the SEC’s adoption of legislation requiring public companies to file quarterly financial disclosures following New York Stock Exchange crash in 1929 to the recent proposal in favor of allowing publicly traded companies to report earnings every six months—the authors posit that a change to the reporting requirements will have significant, market-wide impact.  

The authors argue that, while potential ramifications for companies may include reduced compliance burdens, promotion of longer-term investments, and delayed recognition of problems, likely repercussions for investors include a decrease in market stability and corporate transparency, lower market pricing, and an increased opportunity for fraud.