Are there secrets in SEC filings?

Over the past few days, it seems as if footnoted has picked up a bit of competition from enterprising journalists discovering the vast amount of stuff contained in SEC filings. We refer, of course, to the various articles about Mitt Romney, the presumptive Republican nominee for President, and when exactly he served as CEO of Bain Capital.

Many of these articles point to specific filings that mention Romney by name, well after he supposedly left Bain in Feb. 1999. For example, this Talking Points Memo article from last week cites 2 13Ds as evidence to the contrary. And this Mother Jones article cites several 13Gs.

Since we read filings day in and day out, we’ve also spent some time poking around the filings related to Romney. But the thing that really caught our attention (and which we tweeted over the weekend) was this article in the Washington Post debunking some of the claims by President Obama’s campaign that Romney may have committed a crime by lying on SEC filings.

Just to be clear, we’re not taking a position on that. What we did find interesting, however, was this statement made by reporter Glenn Kessler at the top of the story:

“There is a journalistic convention that appears to place great weight on —SEC documents. But these are public filings by companies, which usually means there are not great secrets hidden in them.”

That statement alone made us question everything else we read in the story. That’s because since August 2003, we’ve been finding lots of secrets in SEC filings — documents that are readily available, but which we know very few people actually read.

Now, these may not be secrets in the true meaning of the word. And they’re certainly not classified. But with over 650,000 filings made to the SEC in 2011 that just don’t get much or any attention, it’s a bit of a stretch to say there’s no secrets just because the filings are public. Companies know this, or they wouldn’t do things like file a lengthy 10-Q (as Hewlett-Packard did at 5:19 pm on a Friday afternoon last month). Or file an annual report that was over 2,200 pages.

Over on Twitter, a number of folks chimed in about Kessler’s statement, including my friend Herb Greenberg, who called the comment “incredibly stupid” and added that there’s “tons of jewels if you know how to connect the dots”. Indeed, this piece over the weekend on the site Emptywheel points to numerous examples where Kessler, in an earlier life, connected those dots in the filings.

We’re pretty sure that footnoted readers would agree. The bottom line is that there are plenty of secrets in SEC filings, if you know where to look.

Image source: Top Secret via Shutterstock


Over at footnotedPro, our subscription service exclusively for financial professionals, we find plenty of secrets in SEC filings, including early warning signs and hidden red flags well in advance of the market. For more information, or to inquire about a trial subscription, please email us.