ShmoopTube

Where Monty Python meets your 10th grade teacher.

Search Thousands of Shmoop Videos

See All

Finance: What is Regulation Full Disclosure? 43 Views

Share It!

Description:

What is Regulation Full Disclosure? Publicly traded companies are required by SEC rules to release full disclosure of all info related to material events of the company within legal limits and federal statutes. For example, in order to be compliant with SEC rules, Northrop Grumman could announce a new deal to supply fighter jets for the USAF and the dollar amount of the deal, as well as for how many units over what period of time. However, national security rules would prevent the need to disclose the kind of weaponry or tactical stealth capabilities that the aircraft may include.

Language:

English Language

Subjects:

Transcript

00:00
finance a la shmoop. what is regulation full disclosure or in industry parlance
00:07
reg FD ?all those whispery hallways of the 1970s and 80s
00:13
insiders muckety-mucks cheaters Liars deceivers key employees on the take [men in suits discuss stocks]
00:19
sound like the dramatic cover for a Hollywood movie and while it was and it
00:23
was real life as well. the practice of gleaning information

00:26
essentially unavailable to the average investor was a large part of the
00:30
practice of quote doing research unquote for all too many of the professional by
00:36
side investment firms of the era. the regulator's finally noticed and began to
00:42
crack down with only modest success for a while when finally reg FD was enacted
00:47
via the SEC in 2000. well that regulation massively prohibited the type of
00:53
discussions that could legally happen among analysts and company insiders. in
00:59
fact disclosure of much more than much more than the company name mailing
01:03
address and the product they sold was prohibited unless it was done in a
01:07
broadly available and well-publicized public forum that John Q public could [woman gives presentation]
01:13
participate in. the goal here was to take away free money or profits or gains from
01:18
insiders leaking information you know so that investors could make bets with way
01:25
more information on whether or not the roulette wheel of the company's
01:29
quarterly performance in earnings was going to in fact land on red twenty
01:34
three. so yeah that's what reg FD is about. trust us we've fully disclosed
01:38
everything we know about it and we're going modern here. modern era people come
01:43
on get with it. [man folds arms inside casino]
Full Transcript