In the financial world, Disclosure refers to the timely release of all information about a company that may influence an investor's decision. The Securities and Exchange Commission (SEC) requires public companies to disclose material events or information in a Form 8-K filing. A company must also file a Form 10-Q report quarterly and a Form 10-K report annually disclosing its financial results. Investors rely on these filings to make informed investment decisions.Disclosure is important because it allows investors to assess the risks and potential rewards associated with investing in a particular company. Material events or information that may not be reflected in a company's financial statements can have a significant impact on its stock price.For example, if management discloses that it is facing legal challenges or expects lower sales for the upcoming quarter, investors will likely react by selling shares or shorting the stock.Disclosure also helps ensure fair and orderly markets by providing all market participants with equal access to information. In addition, accurate disclosure promotes confidence in our capital markets system and helps protect investors from being misled or defrauded.
