Revisiting (Again) “Truth in Securities Revisited”: The SEC Disclosure Regime in the New Millennium

The system of disclosure for public companies no longer meets the needs of investors and other stakeholders. Largely put in place by the Securities and Exchange Commission in 1982, the principles underlying the system have failed to keep pace with shifts in the market and dramatic changes in technology. The system requires a paradigm shift and fundamental alterations in the principles underlying the approach to disclosure. The shift must include the integration of comparative data, the expansion of the categories subject to mandatory disclosure, and the disaggregation of financial statements. Failure to update the system of disclosure will result in investors increasingly relying on sources of information outside of the periodic reporting process, reducing the importance of required disclosure and the role of the Securities and Exchange Commission.