Last Friday, the SEC ruined the weekend of many journalists by making a massive Bernie Madoff document dump. The documents, which detailed how the SEC dropped the ball on Madoff over all thos years, made the agency look terrible. It was classic timing.
But wait, there’s some controversy over who timed the dump.
But here’s the real rub: by dumping this kind of thing on a Friday night and providing no description next to the 536 exhibits, the SEC is essentially green-lighting companies to do the same thing with their filings. Right now, the overwhelming majority of companies provide some sort of description of what’s in the exhibits that they file, so that you can figure out whether a particular exhibit is worth reading. It’s the difference between stating “material contract” and “employment agreement with John Doe”.
Over the weekend, I asked the SEC why they chose to release the information this way and didn’t exactly get a good response. In a nutshell, the folks at the SEC blamed the OIG’s office for the Friday night dump and David Kotz, whom I spoke to this morning, said it was the SEC’s decision. “To be honest, I’m surprised that they did this on a regular Friday, instead of waiting for a holiday Friday to put this out,” Kotz told me a short time ago.
Not very reassuring, is it?