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The Securities & Exchange Commission (SEC) wants to end the requirement that U.S. public companies file quarterly reports (10-Qs) and move to semiannual reporting on a new form dubbed the “10-S.” The change sounds obscure, but it could fundamentally change what investors know about the companies they own. So, what does this mean for the ordinary investor, and why is the Trump Administration so adamant about making the change?

BBTW columnist Peter Green spoke with Prof. Marc I. Steinberg, the Rupert and Lillian Radford Chair in Law at Southern Methodist University's Dedman School of Law and a former SEC enforcement attorney.

Right now, companies report every three months, on a form called the 10-Q, and annually on a form called the 10-K, which is essentially the firm’s annual report. What would change for ordinary investors if that became every six?

There's a provision in both the 10-Q and the 10-K called the management discussion and analysis—the MD&A. Under the MD&A, they've got to disclose adverse material information, even if it's going to arise in the future, if it's reasonably likely to occur and have a material effect on the company.

How long can a company sit on bad news today?

Suppose a company learns it's going to lose a major contract at the end of the year. Under the SEC rules, unless the company has said something about that specific contract, they don't have to disclose the loss until the 10-K is due, which would be sometime in March of next year. So they can embargo that for a good amount of time.

And under semiannual reporting?

Imagine if quarterly reports were eliminated and a company went to semiannual reporting. Suppose the company lost the contract on January 3. The year ends on June 30, and they'll have about 35 days, so they won't have to report that bad news until August 5. … We're talking about seven months.

The EU, UK and Australia already use semiannual reporting. Why isn't that a good model for the U.S.?

Those jurisdictions also require prompt disclosure of all material information, with only narrow exceptions, such as when disclosure would sink a deal. This country doesn't have that. You don't have to disclose material information unless the company has already spoken on the issue or disclosure is called for by a specific SEC form. Unless a company fits into one of those disclosure requirements—and they are comprehensive requirements—but like any other list, whether you call it a laundry list or a grocery list, we all know there are important items that aren't on it.

What does that mean for the individual investor?

It just means they don't have the quality of information they ought to have in order for the markets to be informed and price-efficient. After all, efficient market theory says the market price reflects all the material information that has been publicly disclosed. What we have here is a ton of non-disclosed information that would impact market price. So the market price is even less of an accurate indicator of a company's worth. And then it facilitates fraud, and of course more insider trading.

How does a longer reporting gap facilitate fraud?

The companies don't have to disclose for as long, which means those bent on fraud can avoid disclosing bad news. The fraud would be failure to disclose bad news, or secondary fraud: failure to disclose that they were engaged in fraud to begin with.

Don't outside directors act as a check?

It's going to be harder for outside directors to monitor insiders. It's already problematic … because we've seen again and again—before Enron and after Enron, before the financial crisis and after the financial crisis—that insiders do not like to share bad news with outside directors. … I'm not saying this happens in all companies or most companies, but it happens in enough companies to indicate that there's a real problem.

Could directors do more to protect shareholders?

Outside directors could do more if they had the wherewithal. In 1996, there was an SEC advisory committee, basically composed of corporate people and big law firm lawyers—not plaintiffs' lawyers—that recommended a company have a disclosure committee comprised of independent counsel. I make this recommendation in my book, Rethinking Securities Law, which was awarded best law book in the United States for 2021. … Nothing keeps outside directors from forming a disclosure committee comprised of outside directors and hiring their own law firm, so they'd have greater access.

Stock exchange rules define independent directors by family and financial ties, not social ties or shared background. Does that matter?

The independence of directors isn't so real.

Why don't boards bring in people like you?

I'm a former SEC enforcement attorney, and I have an active expert-witness practice. I've been engaged by both plaintiffs and big law firms in cases. You'd think someone with my background would be attractive to a corporation as a board member. I've never been asked to sit on any board. You know why? They see I've testified for plaintiffs. They see my writing. They probably think I'm going to ask tough questions, and they don't want that.

Does the same bias show up at the SEC?

Look at the SEC: How many investor lawyers—lawyers who have represented investors in lawsuits—have been appointed to the SEC since its origination in 1934? Zero, in over 90 years. And that's under Democratic, pro-investor administrations. The lawyers who generally get appointed come from big law firms, whose clients are the big corporations trying to fend off the SEC, and directors and officers. How likely is it that they're going to initiate enforcement actions against CEOs and CFOs when there's misleading disclosure? I'm not implying that these people aren't men and women of integrity. I think they are, and I think they're quite intelligent. But the question is: What's their reference point? What's their background? What's their bias?

Even without wrongdoing, would longer gaps mean bigger price shocks?

It's hard to know what the result will be, whether there will be more volatility in the market. You'd think this would be more of an issue with companies that aren't as widely followed, because when these companies go to semiannual reporting, at least in the beginning, analysts are less likely to follow them as much. That means less reporting. When the news finally comes out, there's likely to be more volatility, because analysts would have to do a lot more work on their own.

Would companies that drop quarterly reports be penalized by investors?

I think at the beginning, yes. The question is what percentage of companies do this. Over the long term, if more and more companies go to it, they'll be on an equal playing field. But at the beginning, I think there's going to be a price discount because of the lack of transparency and the greater risk of volatility. I also think there's a greater risk of misconduct. I'm not going to call it fraud, because misconduct can occur without fraud.

Supporters say quarterly reports push managers to chase short-term share prices. Is that persuasive?

One of the arguments for semiannual reporting is that it takes emphasis off short-term management decisions that goose the share price at the expense of long-term business viability. And the response is that these companies are already holding analyst meetings. Professional investors are always inquiring. But remember, you've got Regulation FD to deal with, so companies can't convey material information. If they go to semiannual reporting, there's going to be a greater risk of FD violations.

What about the promised cost savings?

Even under the Commission's analysis, the cost savings are minimal—basically averaging, as I recall, less than $200,000 per issuer. It's next to nothing.

If big companies keep holding calls and meetings with analysts, doesn't that fill the gap?

Yes, they have analyst calls and so on, but again, this is all voluntary disclosure. It's not mandatory disclosure. What we don't have is mandatory disclosure of bad news. Companies are very happy to disclose good news, but when they've got bad news, the question is how many of these companies will be forthcoming when they think they can resolve the situation during the interim period? That's not what the securities laws are based on. They're based on transparency.

The SEC says it wants more companies to go public. Will this help?

The Commission is barking up the wrong tree. What they've got to do is rein in the expansive private offering rules. These companies are able to do these 506(b) offerings time and time again. We have over 1,000 unicorns in this country, and the reason is that the private offering rules are so expansive that companies can raise unlimited amounts of capital from accredited investors, who are defined very broadly, without having full disclosure. And the companies much prefer that, these unicorns, than going to the public markets. So if you want more public companies, the answer is not to go to some [semi]annual reporting. The answer is to make more restrictive the private offering rules.

What else would you change?

You've got to read my book, Rethinking Securities Law. I spent a whole book on that.

(This interview has been edited and condensed for clarity and brevity)

—Peter S. Green

Big Businesses mentioned this week:

$BAC ( ▲ 0.56% )  $FUN ( ▼ 4.36% )  $AAPL ( ▼ 0.1% )  $OPEAZZX ( ▲ 1.19% )  $NVDA ( ▼ 1.54% )  $LEN ( ▲ 5.64% )  $KBH ( ▲ 3.77% )  $SKYD ( ▲ 2.83% )  $NFLX ( ▲ 3.0% )  $ABS ( ▼ 0.38% )  $KR ( ▼ 0.6% )  $AMZN ( ▲ 0.39% )  $BMBL ( ▼ 0.67% )  $DELL ( ▼ 6.8% )  

This week, big business!

• The Usual Suspects

• The Short Stack

• Want more Cheddar?

The Usual Suspects

• Bank of American Trouble: Karma is a force that banks and bankers often think they can ignore. But Bank of America $BAC ( ▲ 0.56% ) just learned the hard way that sometimes the U.S. Treasury keeps watch. Its shares fell 8.5% after reporting a $1.2 billion fine for “egregious and continued” money laundering and sanctions violations, helping to slash the bank’s net income to $6.9 billion in the quarter from $8.3 billion a year earlier. Among unflagged transactions: Money laundering by a Chinese bank working with sanctioned Russians and Latin American drug cartels, and a customer whose links to more than 100 compliance cases weren’t enough for the bank to cut off the lucrative client. BoA says it has been training employees to improve their fraud detection skills. In a separate investigation, federal bank regulators alleged this week that BofA was among several banks that denied services to groups linked to both the Republican and Democratic parties. In March BofA agreed to pay $72.5 million to victims of Jeffrey Epstein, who argued BofA ignored signs Epstein’s accounts there were being used to make hush payments to young women. Even without the legal scrutiny, other big factors are hurting its shares, in particular high interest rates on Treasury bills, which cut into stock trading profits. Meanwhile BofA  has hired 1,000 consultants to help some 3,000 internal staff fix software faults exposed by Anthropic’s Mythos and other AI models. BofA is the second-largest U.S.bank by assets, with just over $2.65 trillion in assets. 

• Half-mast: The death of a Georgia teacher on a roller coaster at a Six Flags $FUN ( ▼ 4.36% ) amusement park near Atlanta appears to have dealt a significant blow to the company’s struggling turnaround efforts. Despite a new CEO, a recent merger with rival Cedar Fair two years ago, and a 4% rise in attendance in the second quarter, shares are down nearly 80%, including a 14% plummet on Tuesday and a 12.35% drop on Wednesday. It’s not clear how the teacher, 42-year old Hassan Kariem, was ejected from the Goliath ride, but the company has closed 10 rides out of what it said is “an abundance of caution.” Activist investor firm Jana Partners took a 9% stake in Six Flags, with investors including Mr. Taytay, Travis Kelce, and had been urging the company to sell itself.

• Apple’s growing pie: It took a 0.5% boost to push Apple $AAPL ( ▼ 0.1% ) into the uppermost reaches of public companies, with its market value just topping $5 trillion on Wednesday, only just behind chip giant Nvidia $NVDA ( ▼ 1.54% ) . For those into the numerology of markets, Apple’s cap had passed into the $5T zone six times before, but never closed above the magic number. The move may be less of an achievement than a dare for new CEO John Ternus. His predecessor, Tim Cook, pushed Apple market cap up 13-fold in his 15 years at the helm. But now, everyone’s got an iPhone and the new tech frontier is AI, which is a lot harder for a device company to master. Meanwhile Apple and OpenAI $OPEAZZX ( ▲ 1.19% ) are in court, trading accusations of IP theft. The newest charge: OpenAI claims an Apple employee came to work there for six months and gathered more than 100 secret files about an unreleased OpenAI device, then shared them with Apple. The accusation comes in a filing in Apple’s suit against OpenAI for poaching trade secrets and key employees. The two tech giants are emerging as key competitors in the race for the next-gen smart device. Shares in Apple are up 8% in the past year. 

• Home out of range: With mortgage rates at 7.53% for a 30-year loan last week, according to Bankrate, the U.S. home market is stalled. Higher rates mean buyers will be paying more interest and have less cash to pay for homes. So why doesn’t the market adjust? One culprit: homeowners who simply can’t or don’t want to accept the lower prices. In September, 6.1% of sellers pulled their property off the market after failing to get an acceptable offer. Meanwhile, There are still too many sellers and too few buyers in the home market, and that’s clobbering U.S. homebuilders, including Lennar $LEN ( ▲ 5.64% ) (down almost 50% in the past year) and KB Home $KBH ( ▲ 3.77% ) (down 32% in a year), who’ve seen prices drop an average 5% in the central U.S. from a year ago.  Another culprit: The $1 trillion-plus AI building boom, which is sucking up free cash that in other eras would have been lining up to be lent to home buyers. “That starts sounding like real money, even against the amount of money that governments are going to be borrowing,” Mike Fratantoni, chief economist at the Mortgage Bankers’ Association, said during MBA’s annual conference in Chicago last weekend. “We're just in a world right now where we have more borrowers than savers. That naturally is going to be putting upward pressure on rates.”

• Netflix nix: Losing out to David Ellison’s Skydance/Paramount $SKYD ( ▲ 2.83% ) in the battle for control of Warner Bros. Discovery has opened a new chapter of uncertainty for Netflix $NFLX ( ▲ 3.0% ) , the world’s largest streaming service. Its shares are down 40% in the past year, even though customer retention is near 98%, the best in the industry. But competition for viewer eyeballs from gaming, social media, AI and, of course rival streamers and studios is growing, despite adding games and bundling with other services. So even as gross profit hit an all time high of $23.76 billion, and gross margins hit an all time high of 49.2% in the second quarter, co-CEOs Greg Peters and Ted Sarandos are firing 1,000 people, roughly 6% of staff. 

• A new sale for Albertsons? Forget Miracle Whip, not even Miracle Meg Whitman, one-time CEO of eBay and later Hewlett Packard, seems able to turn around Albertsons $ABS ( ▼ 0.38% ) , the fourth-largest U.S. grocery chain by sales, with 2,244 stores and $83 billion in sales in the 2025 fiscal year. Shares are down 32% in the past year, though they’ve rebound about 15% since Oct. 5. Now, after reporting disappointing earnings in the second fiscal quarter, the grocer says it may hold a special sale: of itself. It is still in court with rival Krogers $KR ( ▼ 0.6% ) (number 3) over a planned sale to its rival for $24.6 billion, seeking a $8 billion in damages after the Federal Trade Commission blocked the deal. Albertsons is still battling the same forces that led to its attempted suicide by merger: Rising prices of everything from food to fuel (thanks, Iran War), and less money in the pockets of the ordinary people who shop at supermarkets. As then-CEO Vivek Sankaran told the court when he testified in favor of the Kroger merger, “the grocery business is a zero-sum game in America.”

• Smart guys! Two U.S. professors won the Nobel prize in economics for their work that explains why central banks and economic policy makers need to explain to consumers and businesses what they’re doing, in order for their policies to succeed. Stanford’s Robert E. Hall, and Columbia’s Michael Woodford explained that if consumers and businesses are given forward guidance that, for example, interest rates will remain low, then they will borrow and invest. “The understanding of the people making decisions about spending, their expectations of what policy is likely to be like in the future is crucial to the effects of policy,” Woodford told reporters. But in the U.S., at least, it seems that policy walked out the door with Jerome Powell. Now, Fed chair Kevin Warsh is allergic to giving guidance, and that may be part of the reason inflation is stubbornly high and interest rates are breaking recent records. Well, that and the Iran war. 

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The Short Stack

• Shifty business: Amazonis $AMZN ( ▲ 0.39% ) is reportedly in talks to buy a chipswitching software firm for $7 billion, the Wall Street Journal reports,citing people “familiar with the matter.” Privately held Decart, recently valued at $4 billion, makes software that helps AI users avoid one of the major industry bottlenecks: building your software around a single brand of chip, then finding it hard to source more of the same chips, as rivals race to secure computing power. With Decart, firms like Amazon can run the same programs on chips from multiple makers.

• Bumbling to greatness. Bumble $BMBL ( ▼ 0.67% ) , the once omnipresent dating app that lost about 90% of its value after going public in 2021, might go private again for $1 billion, that’s 3x its market cap on Friday, the last trading day before the Wall Street Journal revealed the deal talks. Shares are now up 131% from Friday. But it's not clear how Bumble’s stumbles can be fixed. Young people are walking away from dating apps. Dating-app sessions shortened about 13%, from 13.21 minutes in 2024 to 11.49 minutes in 2025. Total sessions fell 7%; installs fell 4%.

• Dell declines: The big tech sell-off just slammed Michael Dell and his eponymous PC company $DELL ( ▼ 6.8% ) , just days after Michael Dell and his wife Susan appeared with president Trump to pledge up to $6.25 billion to American children who will be getting the new 530A tax-free savings accounts. Dell’s net worth dropped about $16 billion in two days, as shares in Dell Technologies plunged more than 18%. Dell dropped from America’s fourth-richest person to its sixth wealthiest, according to Forbes' billionaires index. 

• Hi, prices! It’s like the guest that just won’t leave. The latest inflation figures from the government, the Consumer Price Index, showed headline inflation at 3.7%. That’s way beyond the Fed’s hopes of getting inflation down to within range of 2%, a long-term target that allows economic growth while preserving asset values. Instead, we’re into what counts for the U.S. as Latin America-style inflation. It’s not that you’ll have supermarket clerks roaming the aisles to mark up prices every hour, but the pain is hitting Americans where it hurts and it isn’t going away. EY-Parthenon Chief Economist Gregory Daco delivered a laundry list on Wednesday of the bad news in the CPI report:

  • The fuel price surge  is delivering an immediate hit to consumers’ purchasing power

  • The diesel price spike “poses a broader inflationary risk”

  • Supply chain disruptions are pressuring goods prices

  • The AI capex boom continues to fuel price pressures across the tech ecosystem.

  He added: “The combination of these forces is likely to keep headline and core inflation elevated heading into 2027 and further pressure household purchasing power.”

  But there is one piece of good news: Social Security recipients will get a 3.6% cost-of-living adjustment, which may just accelerate the insolvency of the whole system. Get to work, kids.

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Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.