Why not eliminate quarterly earnings reports, Wachtell co-founder suggests
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A bedrock system underlying much of corporate regulatory law may not, in fact, be necessary, the co-founder of one of New York’s top business law firms is suggesting.
In a Tuesday memo to clients, co-founder Martin Lipton of Wachtell Lipton Rosen & Katz calls for the U.S. Securities & Exchange Commission to consider eliminating quarterly company reports, the Wall Street Journal (sub. req.) says.
Pointing to a finding by United Kingdom regulators that “rigid quarterly reporting requirements can promote an excessively short-term focus by companies, investors and market intermediaries and impose unnecessary regulatory burdens on companies, without providing useful or meaningful information for investors,” Lipton and co-author Sabastian Niles suggest the SEC should ponder the issue, too.
“The SEC should keep these observations in mind in pursuing disclosure reform initiatives and otherwise acting to promote, rather than undermine, the ability of companies to pursue long-term strategies,” the Wachtell memo says.
