I hate to say “I told you so”—but I did. About a year ago, I went through the ridiculous task of searching through nearly 6,000 “material definitive agreements” that had been filed by public companies since the Securities and Exchange Commission’s revised Form 8-K rule became effective.
As I wrote in this column back in February 2005, the rule—which requires companies to disclose an expanded number of items—had caused companies to over-disclose agreements that were hardly material. The reason, of course, had little to do with informing the investing public; rather, the disclosures were driven by a fear of litigation and enforcement. After all, General Electric had just been excoriated for failing to describe plush retirement benefits it had agreed to provide former CEO Jack Welch, and many companies were being warned by counsel that even the most minute contracts were “material” and should disclosed.
