The STOCK Act, Insider Trading, and Public Financial Reporting by Federal Officials

Most securities that are to be sold have to be registered. The registration documents have to describe the securities that are being sold, provide financial statements and a describe the management structure of the company. The Securities Exchange Act of codified at 15 U.

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It also added more reporting requirements for securities that are being sold on a secondary market, such as a stock exchange, and it set thresholds for how large a company has to be in order to fall under the reporting requirements. The SEC also may require some businesses to file additional reports. The database takes some getting used to, but every public filing of publicly traded companies is in it. There are other Web sites that often include SEC documents, such as www.

Some of the pay services allow searches for keywords across SEC filings. The most important documents for a business reporter are the K annual report , Q quarterly report , and A proxy statement. Other important forms to keep an eye on are the 8-K, which lists material changes that occur between quarterly and annual reports, Form 4 insider trading and G trading by large shareholders. The K is a lengthy report filed annually that includes a wealth of information about the company.

Perhaps the most important item in the K is the balance sheet, which reveals the financial bottom line for a company. Also noteworthy in the K is its section on liabilities, where management has to disclose any pending litigation involving the company, and its footnotes containing story tips. For example, is one company making more aggressive disclosure than others in the industry? Is one company more conservative? The quarterly report is similar to the annual report, only smaller. Its balance sheet contains comparisons of financial information for the quarter being reported and for the same quarter in previous years.

It is often referred to as an earnings report, and comes with a year-to-date summary. Companies that postpone projects will disclose this in a Q. Asking about postponements can lead to a great story. For example, one business reporter asked about a private prison company that was postponing expanding facilities, according to a Q. The proxy statement comes out before an annual meeting of shareholders. It contains important information that shareholders are expected to discuss.

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It also discloses executive compensation though this information can be scattered throughout the form in different places. Finally, it will include any proposals that are up for a shareholder vote. There are private proxy advisory firms that recommend how shareholders should vote. Knowing their recommendations is key to knowing how a vote will go.

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Some companies will open at least a portion of the meeting to the press or public. They might also make top executives available to the press before or after the meeting.

The STOCK Act, Insider Trading, and Public Financial Reporting by Federal Officials

If a company is not planning to allow a reporter access to the annual meeting as a member of the press, one way to gain access is to purchase one share of stock in the company before the record date at which the company creates the list of shareholders of record for the meeting. Annual meetings can be quick and are often one-sided affairs presenting the company in the best light.

Do your homework beforehand. Read the most recent quarterly report and the proxy statement, which may point you to dissident shareholders and their concerns beforehand, and look for recent reports about the company by analysts and in newsletters. The 8-K gets filed whenever there is a material change in the business that investors need to know about. The SEC has a list of events that trigger a mandatory 8-K filing, such as a change of chief executive officers, a bankruptcy or mergers and acquisitions.

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Unique identifying numbers for this report in the Digital Library or other systems. This legislative branch agency works exclusively for Members of Congress, their committees and their staff. This collection includes CRS reports from the mid's through the present--covering a variety of topics from agriculture to foreign policy to welfare.

What responsibilities do I have when using this report? Dates and time periods associated with this report. Geographical information about where this report originated or about its content. Description This report gives an overview of the Stop Trading on Congressional Knowledge Act of STOCK , which affirms and makes explicit the fact that there is no exemption from the "insider trading" laws and regulations for Members of Congress, congressional employees, or any federal officials.

Who People and organizations associated with either the creation of this report or its content. Author Maskell, Jack Legislative Attorney. Publisher Library of Congress. About Browse this Partner. What Descriptive information to help identify this report. Identifier Unique identifying numbers for this report in the Digital Library or other systems.

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