WallStreetBets Opposes SEC Proposal To Shift Quarterly Reporting To Semiannual

The U.S. Securities and Exchange Commission proposed easing quarterly reporting standards for publicly traded companies by allowing firms to report twice a year instead of four times, and WallStreetBets filed a public comment opposing the shift.

“WallStreetBets has entered the chat”

Bloomberg Law News

Bloomberg Law News reported that Securities and Exchange Commission Chairman Paul Atkins unveiled the fast-tracked plan, and the WallStreetBets filing says, “Many of us learned what a 10-Q was the hard way, which is to say we bought a stock, watched it fall 40% on an earnings release, and then read the filing to find out why.”

Bloomberg Law News

TechCrunch described the SEC’s proposal as letting companies elect every year whether they want to file an annual report and three quarterly reports or simply one annual report and one semi-annual one, while WallStreetBets argued that this would reduce real-time visibility into the financial health of “issuers.”

WallStreetBets also framed the change as harming retail investors’ ability to monitor companies during gaps, asking, “We would like to know what the Commission thinks the cost is to a retail investor of holding a position for six months without a single mandatory disclosure from the company.”

WallStreetBets’ opposition was voiced in language that repeatedly attacked the premise that quarterly reporting drives short-termism, with the Business Insider account quoting the filing: “We are against it.”

Business Insider also reported that the comment argued the SEC’s theory about quarterly reporting causing “short-termism among corporate managers” had “the relationship to retail investors exactly backwards,” and it emphasized that members “rely on regular earnings updates for vital information.”

Business Insider

Bloomberg Law News added that the subreddit described itself with the tagline “like 4chan found a Bloomberg Terminal,” and it quoted the filing saying, “If quarterly reporting is crushing American capitalism, American capitalism is hiding it well.”

TechCrunch said the community described quarterly filings as “the single most important leveling mechanism between retail and institutional investors in U.S. equity markets,” and it quoted the same filing line about institutional investors having “expert networks” while “We have the 10-Q.”

The public comment period is underway, with Zamin.uz reporting a “60-day public comment period” and saying “over 120 individuals” have already opposed the proposal, including former SEC attorneys.

“The Securities and Exchange Commission officially proposed last week to weaken the quarterly reporting standards for publicly traded companies”

TechCrunch

TechCrunch reported that the SEC’s arguments have been rejected by “more than 120 people in the first week of the 60-day public comment period,” and it said the group includes retail investors, certified financial planners, hedge fund managers, and “one former SEC attorney.”

TechCrunch also described the stakes in terms of disclosure gaps, quoting the filing’s question about the cost to retail investors of holding positions for “six months” without mandatory disclosures, and it argued that “Someone is going to capture that spread.”

Business Insider further framed the consequences as a potential widening of the information gap, quoting an anonymous comment that warned, “Doubling the time between disclosures is a gift-wrapped invitation for corporate malfeasance, fraud, and the kind of accounting shell games that wiped out shareholders at Enron and WorldCom.”