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Since 1970, the Securities and Exchange Commission (SEC) has required public companies to file reports summarizing their financial performance on a quarterly basis. Such mandatory quarterly disclosure has recently been criticized as incentivizing corporations to deliver short-term results rather than developing sustainable, long-term strategies. This Article examines the origins of the quarterly reporting system to assess whether the SEC should reduce the frequency of periodic filings. It concludes that much of the pressure on public companies to deliver short-term results emerged as the market increasingly focused on earnings projections issued by research analysts. The pressure to meet such projections can distort the behavior of public companies, but such distortions will only be significant in certain circumstances. Because it is unclear that the quarterly reporting system substantially impacts company incentives, the SEC should pursue modest reforms rather than take the radical step of eliminating quarterly disclosure. Quarterly disclosure is one example of how securities law tends to promote the short-term interests of transacting investors. In contrast, corporate law, which mediates the interests of shareholders, often gives managers the discretion to consider long-term interests. Strong securities law can be balanced by weak corporate law.

INTRODUCTION Like many other administrative agencies, the Securities and Exchange Commission (SEC) has significant power to regulate an important sector of the economy--in the SEC's case, the securities markets. Critics [...]

Though the Enron and WorldCom cases were the focus of much attention, very little is known about the subset of securities class actions involving bankrupt companies. The context of bankruptcy should be interesting to scholars of securities litigation because it includes the cases where shareholders suffer the greatest harm. The resolution of securities class actions where a bankrupt company is the issuer may shed light on the way in which context affects how parties and courts assess the merit of lawsuits.There are two competing views as to the relationship between bankruptcy and securities fraud. Companies approaching bankruptcy have greater incentives to commit fraud in order to save the company or the jobs of managers. There thus might be a causal relationship between bankruptcy and securities fraud. On the other hand, the context of bankruptcy could lead parties and judges to more readily assume that fraud was present in bankrupt companies. This perception could reflect hindsight bias, the tendency to overestimate the predictability of events, leading to the conclusion that management knew of the danger of bankruptcy but failed to disclose it.This study assesses the relationship between bankruptcy and securities fraud by analyzing a data set of 1,466 consolidated class actions filed from 1996 to 2004, of which 234 (approximately 16%) cases involved a company that was in bankruptcy during the pendency of the class action (“bankruptcy cases”). The study tests two hypotheses: (1) bankruptcy cases are more likely to have actual merit than cases where the issuer is not bankrupt (“non-bankruptcy cases”); and (2) bankruptcy cases are more likely to be perceived as having merit than non-bankruptcy cases, even if they do not necessarily have more merit.

As investors have become more concerned about the risk that corporate wrongdoing will impact a company's stock price, the SEC and private plaintiffs are increasingly bringing cases alleging that a company misrepresented a risk relating to an Environmental, Social, and Governance (ESG) matter. The courts have been skeptical of such claims because of the perception that the scope of securities fraud liability would be too broad if it policed disclosure relating to the myriad of ESG risks facing public companies. They have thus often used the puffery doctrine to find that broadly worded statements concerning ESG risk are not misrepresentations. This Article argues for a different focus in the evaluation of ESG securities fraud cases. The key question in such cases is whether the ESG risk at issue was sufficiently material so that the company's disclosures that failed to acknowledge such risk were misleading. Courts should assess the materiality of ESG risk by applying the probabilitymagnitude test set forth by the Supreme Court in Basic Inc. v. Levinson. In doing so, they should consider facts relating to whether the probability of the risk at issue is subject to reasonable calculation or whether it is an uncertainty. Screening cases primarily based on the materiality of ESG risk would be a more effective way for courts to identify meritorious cases than rigid application of the amorphous puffery doctrine. [ABSTRACT FROM AUTHOR]

An introduction to articles in the issue which focuses on Sarbanes-Oxley Act 20 years after it was enacted in 2002, is presented, including topics on events that prompted the passage of the Sarbanes-Oxley, the federalization of U.S. corporate governance in the decades after the passage of the Act, and how Section 404 of Sarbanes-Oxley impacted the Securities and Exchange Commission (SEC) as an administrative agency.