The document discusses the role and history of the Securities and Exchange Commission (SEC). It was created in 1929 after the stock market crash to restore confidence in markets. The SEC aims to protect investors, maintain fair and orderly markets, and facilitate capital formation. It requires certain companies to file annual and periodic financial reports to provide transparency to investors. The document outlines various forms such as 10-K, 8-K, 10-Q that are filed with the SEC to disclose important company information.

1. Securities and Exchange Commission Filings Strictly Financials Jan. 3, 2012 Strictly Financials

2. Donald W. Reynolds National Center For Business Journalism At Arizona State University Strictly Financials

3. James K. Gentry, Ph.D. Clyde M. Reed Teaching Professor School of Journalism and Mass Communications University of Kansas [email_address] Strictly Financials

4. Securities and Exchange Commission Created in wake of Crash of 1929 to restore faith in markets Securities Act of 1933 Securities Exchange Act of 1934 Justice Brandeis’ role Strictly Financials

5. SEC Role Protect investors through disclosure of certain information Maintain a fair, orderly and efficient trading market, i.e. prevent misrepresentation Maintain investor confidence Facilitate capital formation Strictly Financials

6. SEC Philosophy All investors should have access to certain basic information about an investment before buying it and as long as they hold it. Strictly Financials

7. Who Files Companies with more than $10 million in assets whose securities are held by more than 500 owners must file annual and other periodic reports. Strictly Financials

8. Accessing SEC Documents Finance.yahoo, other financial sites Company websites SEC: www.sec.gov SEC Filings and Forms (EDGAR) www.sec.gov/edgar.shtml EDGAR: Electronic Data Gathering, Analysis and Retrieval System Strictly Financials

9. Key SEC Documents 10-K 8-K 10-Q Proxy statement Prospectus Form 13-D Form 4 Strictly Financials

10. Form 10-K or Annual Report Historically, had been filed within 90 days after end of company fiscal year Today, 60, 75 or 90 days after fiscal year ends, depending on company’s public float Extensive financial data, including income statement, balance sheet and statement of cash flows Strictly Financials

11. Form 10-K (cont.) Extensive company information Auditor’s report MD&A or Management Discussion and Analysis Extensive footnotes Strictly Financials

12. Form 8-K or Current Update “ Material events” Since August 2004, companies have four business days to file SEC posts them almost instantly upon receipt Number of filings more than doubled since rule change but has slowed Strictly Financials

13. Form 8-K (cont.) Change in company auditor and why Bankruptcy-protection filing Expanded disclosure involving director or officer resignation or appointments Restatement of financial results Key litigation Termination of material agreements Strictly Financials

14. Form 8-K (cont.) Notice of de-listing by a stock exchange Significant costs of leaving a biz New off-books deals involving significant debt Changes in company bylaws Changes in company fiscal year www.sec.gov/answers/form8k.htm Strictly Financials

15. Form 10-Q or Quarterly Update Activities for the quarter (1, 2, 3) Legal proceedings Defaults Labor negotiations Discussion of “seasonality” MD&A Site of incorporation Strictly Financials

16. Form 10-Q (cont.) Many companies file 8-K with earnings release “ Material facts” must be in the 10-Q that might not be included in the 10-K Key point: Unaudited Strictly Financials

17. Form 14 or Proxy Statement Information regarding upcoming annual meeting Matters to be voted on at meeting Executive compensation Information on board members Shareholder proposals Major shareholders Strictly Financials

18. Form S-1 or Registration Statement Also called prospectus Going public or selling new shares Financing, use of proceeds “ Risk factors” Part I and Part II “ Red herring” Strictly Financials

19. Form S-1 (cont.) Look at exhibits, which may include the CEO’s employment contract or a list of the company’s real estate around the world Strictly Financials

20. Form13-D Must be filed by any outside investor who buys 5 percent or more of a public company’s stock Information on investors, even if are private partnerships of individuals Strictly Financials

21. Form 4 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 Strictly Financials

22. Comment Letters SEC posting online comment letters that it sends to public companies and mutual funds about their annual reports, public offerings and other filings Makes it easier for investors and company rivals to understand the weaknesses of the disclosures and what financial issues are of concern to regulators Strictly Financials

23. Why A Private Company Files With SEC If a private company has any debt that trades on an exchange . Even if a public company is bought by a private equity group and taken private, the obligation to file with the SEC continues if the debt remains under previous conditions. Strictly Financials

24. Why A Private Company Files With SEC If the debt was issued on a registration statement and is held by more than 500 holders of record, even if it is not traded on an exchange. Obligation continues until the number of shareholders of record falls below 300. Strictly Financials

25. Why A Private Company Files With SEC If a company sold bonds or notes as part of a contract sale and the buyer said the company must file with the SEC until the bonds are retired . Most common reason. Strictly Financials

26. SEC Commissioners Mary Schapiro, D, Chairman Daniel Gallagher, R, Commissioner Troy Paredes, R, Commissioner Luis Aguilar, D, Commissioner Elisse Walter, D, Commissioner Strictly Financials

27. SEC Commissioners (cont.) Serve five-year terms Appointed by the president No more than three from the same political party Strictly Financials

28. SEC Commissioners (cont.) Interpret federal securities laws Amend existing rules Propose new rules to address changing market conditions Enforce rules and laws Strictly Financials

29. SEC Challenges Approximately 15,000+ public companies Before 2004, SEC had about 3,100 employees, small by federal agency standards Over last four years has had 3,500 – 3,600 employees and a budget of approximately $900 million Because of flat budgets, been 10 percent reduction of employees and cut of more than 50 percent in new technology investments Strictly Financials

30. SEC Challenges (cont.) Requested $1.03 billion for FY 2010 and $1.2 billion for FY 2011 Discussion of making it self-funded with control of its own budget Has twice the turnover of the average government agency 2 1/2 years is average employment of an SEC attorney Strictly Financials

31. SEC Challenges (cont.) For three years before Enron’s bankruptcy, the SEC did not review its filings Market meltdown of 2008 Bernard Madoff Strictly Financials

32. SEC Revolving Door In summer 2004: Enforcement division manager to partner in major law firm (white-collar defense) Regional director to partner in major law firm (white-collar defense) Deputy director, investment management, to major bank (compliance) Associate director to major law firm (securities practice) Strictly Financials

33. SEC Uncertain Future XBRL – eXtensible Business Reporting Language Frustration with its performance Legislative self-righteousness Various proposals for restructuring oversight Strictly Financials