Securities and Exchange  Commission Filings <ul><ul><ul><ul><ul><li>Strictly Financials </li></ul></ul></ul></ul></ul><ul>...
<ul><li>Donald W. Reynolds National Center </li></ul><ul><li>For Business Journalism </li></ul><ul><li>At Arizona State Un...
<ul><li>James K. Gentry, Ph.D. </li></ul><ul><li>Clyde M. Reed Teaching Professor </li></ul><ul><li>School of Journalism a...
Securities and Exchange Commission <ul><li>Created in wake of Crash of 1929 to restore faith in markets </li></ul><ul><li>...
SEC Role <ul><li>Protect investors through disclosure of certain information </li></ul><ul><li>Maintain a fair, orderly an...
SEC Philosophy <ul><li>All investors should have access to certain basic information about an investment before buying it ...
Who Files <ul><li>Companies with more than $10 million in assets whose securities are held by more than 500 owners must fi...
Accessing SEC Documents <ul><li>Finance.yahoo, other financial sites </li></ul><ul><li>Company websites </li></ul><ul><li>...
Key SEC Documents <ul><li>10-K </li></ul><ul><li>8-K </li></ul><ul><li>10-Q </li></ul><ul><li>Proxy statement </li></ul><u...
Form 10-K or Annual Report <ul><li>Historically, had been filed within 90 days after end of company fiscal year </li></ul>...
Form 10-K (cont.) <ul><li>Extensive company information </li></ul><ul><li>Auditor’s report </li></ul><ul><li>MD&A or Manag...
Form 8-K or Current Update <ul><li>“ Material events” </li></ul><ul><li>Since August 2004, companies have four business da...
Form 8-K (cont.) <ul><li>Change in company auditor and why </li></ul><ul><li>Bankruptcy-protection filing </li></ul><ul><l...
Form 8-K (cont.) <ul><li>Notice of de-listing by a stock exchange </li></ul><ul><li>Significant costs of leaving a biz </l...
Form 10-Q or Quarterly Update <ul><li>Activities for the quarter (1, 2, 3) </li></ul><ul><li>Legal proceedings </li></ul><...
Form 10-Q (cont.) <ul><li>Many companies file 8-K with earnings release </li></ul><ul><li>“ Material facts” must be in the...
Form 14 or Proxy Statement <ul><li>Information regarding upcoming annual meeting </li></ul><ul><li>Matters to be voted on ...
Form S-1 or Registration Statement <ul><li>Also called prospectus </li></ul><ul><li>Going public or selling new shares </l...
Form S-1 (cont.) <ul><li>Look at exhibits, which may include the CEO’s employment contract or a list of the company’s real...
Form13-D <ul><li>Must be filed by any outside investor who buys 5 percent or more of a public company’s stock  </li></ul><...
Form 4 <ul><li>Announces changes in holdings of directors and  officers (even if hold no stock), and shareholders owning 1...
Comment Letters <ul><li>SEC publishing online comment letters that it sends to public companies and mutual funds about the...
SEC Commissioners <ul><li>Mary Schapiro, D, Chairman </li></ul><ul><li>Kathleen Casey, R, Commissioner </li></ul><ul><li>T...
SEC Commissioners (cont.) <ul><li>Serve five-year terms </li></ul><ul><li>Appointed by the president </li></ul><ul><li>No ...
SEC Commissioners (cont.) <ul><li>Interpret federal securities laws </li></ul><ul><li>Amend existing rules </li></ul><ul><...
SEC Challenges <ul><li>Approximately 15,000+ public companies </li></ul><ul><li>Before 2004, SEC had about 3,100  employee...
SEC Challenges (cont.) <ul><li>Requested $1.03 billion for FY 2010 and $1.2 billion for FY 2011 </li></ul><ul><li>Discussi...
SEC Challenges (cont.) <ul><li>For three years before Enron’s bankruptcy, the SEC did not review its filings </li></ul><ul...
SEC Revolving Door <ul><li>In summer 2004: </li></ul><ul><li>Enforcement division manager to partner in major law firm (wh...
SEC Uncertain Future <ul><li>XBRL – eXtensible Business Reporting Language  </li></ul><ul><li>Frustration with its perform...
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Securities and Exchange Commission Filings - Reynolds Week 2011

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Jimmy Gentry on 'Securities and Exchange Commission Filings" at Reynolds Business Journalism Week, Feb. 4-7, 2011.

Reynolds Center for Business Journalism, BusinessJournalism.org, Arizona State University's Walter Cronkite School of Journalism.

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Securities and Exchange Commission Filings - Reynolds Week 2011

  1. 1. Securities and Exchange Commission Filings <ul><ul><ul><ul><ul><li>Strictly Financials </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Jan. 4, 2011 </li></ul></ul></ul></ul></ul>
  2. 2. <ul><li>Donald W. Reynolds National Center </li></ul><ul><li>For Business Journalism </li></ul><ul><li>At Arizona State University </li></ul>Strictly Financials
  3. 3. <ul><li>James K. Gentry, Ph.D. </li></ul><ul><li>Clyde M. Reed Teaching Professor </li></ul><ul><li>School of Journalism and Mass Communications </li></ul><ul><li>University of Kansas </li></ul><ul><li>[email_address] </li></ul>Strictly Financials
  4. 4. Securities and Exchange Commission <ul><li>Created in wake of Crash of 1929 to restore faith in markets </li></ul><ul><li>Securities Act of 1933 </li></ul><ul><li>Securities Exchange Act of 1934 </li></ul><ul><li>Justice Brandeis’ role </li></ul>Strictly Financials
  5. 5. SEC Role <ul><li>Protect investors through disclosure of certain information </li></ul><ul><li>Maintain a fair, orderly and efficient trading market, i.e. prevent misrepresentation </li></ul><ul><li>Maintain investor confidence </li></ul><ul><li>Facilitate capital formation </li></ul>Strictly Financials
  6. 6. SEC Philosophy <ul><li>All investors should have access to certain basic information about an investment before buying it and as long as they hold it. </li></ul>Strictly Financials
  7. 7. Who Files <ul><li>Companies with more than $10 million in assets whose securities are held by more than 500 owners must file annual and other periodic reports. </li></ul>Strictly Financials
  8. 8. Accessing SEC Documents <ul><li>Finance.yahoo, other financial sites </li></ul><ul><li>Company websites </li></ul><ul><li>SEC: www.sec.gov </li></ul><ul><li>SEC Filings and Forms (EDGAR) </li></ul><ul><ul><li>www.sec.gov/edgar.shtml </li></ul></ul><ul><li>EDGAR: Electronic Data Gathering, Analysis and Retrieval System </li></ul><ul><li>10-K Wizard (Morningstar) </li></ul>Strictly Financials
  9. 9. Key SEC Documents <ul><li>10-K </li></ul><ul><li>8-K </li></ul><ul><li>10-Q </li></ul><ul><li>Proxy statement </li></ul><ul><li>Prospectus </li></ul><ul><li>Form 13-D </li></ul><ul><li>Form 4 </li></ul>Strictly Financials
  10. 10. Form 10-K or Annual Report <ul><li>Historically, had been filed within 90 days after end of company fiscal year </li></ul><ul><li>Today, 60, 75 or 90 days after fiscal year ends, depending on company’s public float </li></ul><ul><li>Extensive financial data, including income statement, balance sheet and statement of cash flows </li></ul>Strictly Financials
  11. 11. Form 10-K (cont.) <ul><li>Extensive company information </li></ul><ul><li>Auditor’s report </li></ul><ul><li>MD&A or Management Discussion and Analysis </li></ul><ul><li>Extensive footnotes </li></ul>Strictly Financials
  12. 12. Form 8-K or Current Update <ul><li>“ Material events” </li></ul><ul><li>Since August 2004, companies have four business days to file </li></ul><ul><li>SEC posts them almost instantly upon receipt </li></ul><ul><li>Number of filings more than doubled since rule change but has slowed </li></ul>Strictly Financials
  13. 13. Form 8-K (cont.) <ul><li>Change in company auditor and why </li></ul><ul><li>Bankruptcy-protection filing </li></ul><ul><li>Expanded disclosure involving director or officer resignation or appointments </li></ul><ul><li>Restatement of financial results </li></ul><ul><li>Key litigation </li></ul><ul><li>Termination of material agreements </li></ul>Strictly Financials
  14. 14. Form 8-K (cont.) <ul><li>Notice of de-listing by a stock exchange </li></ul><ul><li>Significant costs of leaving a biz </li></ul><ul><li>New off-books deals involving significant debt </li></ul><ul><li>Changes in company bylaws </li></ul><ul><li>Changes in company fiscal year </li></ul><ul><li>www.sec.gov/answers/form8k.htm </li></ul>Strictly Financials
  15. 15. Form 10-Q or Quarterly Update <ul><li>Activities for the quarter (1, 2, 3) </li></ul><ul><li>Legal proceedings </li></ul><ul><li>Defaults </li></ul><ul><li>Labor negotiations </li></ul><ul><li>Discussion of “seasonality” </li></ul><ul><li>MD&A </li></ul><ul><li>Site of incorporation </li></ul>Strictly Financials
  16. 16. Form 10-Q (cont.) <ul><li>Many companies file 8-K with earnings release </li></ul><ul><li>“ Material facts” must be in the 10-Q that might not be included in the 10-K </li></ul><ul><li>Key point: Unaudited </li></ul>Strictly Financials
  17. 17. Form 14 or Proxy Statement <ul><li>Information regarding upcoming annual meeting </li></ul><ul><li>Matters to be voted on at meeting </li></ul><ul><li>Executive compensation </li></ul><ul><li>Information on board members </li></ul><ul><li>Shareholder proposals </li></ul><ul><li>Major shareholders </li></ul>Strictly Financials
  18. 18. Form S-1 or Registration Statement <ul><li>Also called prospectus </li></ul><ul><li>Going public or selling new shares </li></ul><ul><li>Finances, use of proceeds </li></ul><ul><li>“ Risk factors” </li></ul><ul><li>Part I and Part II </li></ul><ul><li>“ Red herring” </li></ul>Strictly Financials
  19. 19. Form S-1 (cont.) <ul><li>Look at exhibits, which may include the CEO’s employment contract or a list of the company’s real estate around the world </li></ul>Strictly Financials
  20. 20. Form13-D <ul><li>Must be filed by any outside investor who buys 5 percent or more of a public company’s stock </li></ul><ul><li>Information on investors, even if are private partnerships of individuals </li></ul>Strictly Financials
  21. 21. Form 4 <ul><li>Announces changes in holdings of directors and officers (even if hold no stock), and shareholders owning 10 percent or more of the company’s stock </li></ul>Strictly Financials
  22. 22. Comment Letters <ul><li>SEC publishing online comment letters that it sends to public companies and mutual funds about their annual reports, public offerings and other filings </li></ul><ul><li>Makes it easier for investors and company rivals to understand the weaknesses of the disclosures and what financial issues are of concern to regulators </li></ul>Strictly Financials
  23. 23. SEC Commissioners <ul><li>Mary Schapiro, D, Chairman </li></ul><ul><li>Kathleen Casey, R, Commissioner </li></ul><ul><li>Troy Paredes, R, Commissioner </li></ul><ul><li>Luis Aguilar, D, Commissioner </li></ul><ul><li>Elisse Walter, D, Commissioner </li></ul>SEC filings
  24. 24. SEC Commissioners (cont.) <ul><li>Serve five-year terms </li></ul><ul><li>Appointed by the president </li></ul><ul><li>No more than three from the same political party </li></ul>SEC filings
  25. 25. SEC Commissioners (cont.) <ul><li>Interpret federal securities laws </li></ul><ul><li>Amend existing rules </li></ul><ul><li>Propose new rules to address changing market conditions </li></ul><ul><li>Enforce rules and laws </li></ul>SEC filings
  26. 26. SEC Challenges <ul><li>Approximately 15,000+ public companies </li></ul><ul><li>Before 2004, SEC had about 3,100 employees, small by federal agency standards </li></ul><ul><li>Over last four years has had 3,500 – 3,600 employees and a budget of approximately $900 million </li></ul><ul><li>Because of flat budgets, been 10 percent reduction of employees and cut of more than 50 percent in new technology investments </li></ul>SEC filings
  27. 27. SEC Challenges (cont.) <ul><li>Requested $1.03 billion for FY 2010 and $1.2 billion for FY 2011 </li></ul><ul><li>Discussion of making it self-funded with control of its own budget </li></ul><ul><li>Has twice the turnover of the average government agency </li></ul><ul><li>2 1/2 years is average employment of an SEC attorney </li></ul>SEC filings
  28. 28. SEC Challenges (cont.) <ul><li>For three years before Enron’s bankruptcy, the SEC did not review its filings </li></ul><ul><li>Market meltdown of 2008 </li></ul><ul><li>Bernard Madoff </li></ul>SEC filings
  29. 29. SEC Revolving Door <ul><li>In summer 2004: </li></ul><ul><li>Enforcement division manager to partner in major law firm (white-collar defense) </li></ul><ul><li>Regional director to partner in major law firm (white-collar defense) </li></ul><ul><li>Deputy director, investment management, to major bank (compliance) </li></ul><ul><li>Associate director to major law firm (securities practice) </li></ul>SEC filings
  30. 30. SEC Uncertain Future <ul><li>XBRL – eXtensible Business Reporting Language </li></ul><ul><li>Frustration with its performance </li></ul><ul><li>Legislative self-righteousness </li></ul><ul><li>Various proposals for restructuring oversight </li></ul>SEC filings

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