The National Law Journal Interviews Partners Luke Brooks and Robert Rothman About New SEC Proposal to Reduce Reporting Frequency

The SEC released a proposal that would allow public companies to file semiannual reports instead of quarterly. The National Law Journal spoke with Robbins Geller Rudman & Dowd LLP partners Luke Brooks and Robert Rothman to discuss how the proposal would affect investors, if implemented. They caution that less frequent reporting could create incentives for companies to be less transparent with investors.

“You’re going to wind up potentially with problems of consistency, accuracy . . . a lot of issues that can arise when you don’t have a formal structure around the disclosures,” Brooks told The National Law Journal.

According to the SEC Chairman’s statement, the “increased regulatory flexibility” could encourage more companies to go public. Under the proposal, companies still have the option to voluntarily make disclosures such as earnings announcements quarterly. However, since the United Kingdom changed to semiannual reporting in 2014, most companies only report semiannually.

Noting that periodic reporting helps companies identify and correct small errors before they become so large that insiders engage in fraud to cover them up, Rothman said: “It’s much harder to stop a snowball that’s already halfway down a hill than it is to stop it before it crosses the ridge.”

The SEC is accepting public comments on the proposal until July 6, 2026.

To read the full article from The National Law Journal, click here.