Semiannual SEC Filing Won’t Yield Fewer Suits, Just Tougher Ones

A Securities and Exchange Commission proposal offering companies the option to shift to semiannual reporting from quarterly could mean fewer, bigger revelation-related stock drops that prompt investor lawsuits while making litigation tougher in other ways.

Quarterly or 10-Q reports have been a mandatory staple of the public company calendar since the 1970s. Filings that fall short of fiscal expectations, along with announcements of misstated financials, regulatory rebukes, data breaches and the like, have long been capable of spurring the type of adverse news sparking stock selloffs and attendant litigation.

Halving the number of specifically calendar-driven reports—and permitting a longer interval ...