Kit Addleman in Inside Counsel: Full Disclosure


It's been more than a decade since a series of scandals involving companies like WorldCom and Enron made headlines, exposing levels of financial fraud that startled most Americans and put federal regulators into a state of high alert. In the years since those scandals, the Securities and Exchange Commission (SEC) has put a tighter focus on financial disclosure statements in an attempt to root out “soft information” and uncover true financial fraud...

In the past, companies would rely on third parties to prepare much of their disclosures, but now, businesses must do enough of this work internally to ensure they are comfortable with every detail.

It's not just internal, year-to-year consistency of a certain company's reports that the SEC looks at. The Commision is also comparing a company to its competitors. “The SEC compares a company's disclosures to others in the same industry,” explains Kit Addleman, partner at Haynes and Boone, LLP, and former regional director of the Atlanta office of the SEC.

The SEC Division of Corporation Finance is divided into a dozen different industry groups for reviews. In her role in the White Collar Defense and Investment Funds Practice Group at Haynes and Boone, Addleman consults with a number of companies. “We advise clients to learn the industry standards, to focus on whether your competitors are providing more or less information. You as inside counsel want to provide similar disclosure and look at similar risks for the SEC and for analysts.”

Excerpted from Inside Counsel, August 25, 2014. To view full article, click here.

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