What is Public Disclosure?

Malcolm Tatum

Public disclosure is a situation in which information that was formerly not known to the general public is willingly presented or disclosed to the populace. Disclosures of this type are common in business operations, public service work, and in the world of investing. There are a number of different ways to manage the process of public disclosure, including the use of print media, press conferences, and electronic media such as television or the Internet.

Someone who engages in illicit trading may face incarceration.
Someone who engages in illicit trading may face incarceration.

In many countries, there are specific laws that govern the process of public disclosure. These disclosure regulations not only specify what types of information must be provided to the general public, but also often define what types of information are not subject to disclosure. For example, disclosure laws may require that food companies publicly identify the ingredients found in their products, but not require the amount of each ingredient used in the final product.

Press releases that are printed in local newspapers are an example of public discourse.
Press releases that are printed in local newspapers are an example of public discourse.

Corporations are usually the focus of much of the public disclosure activity that occurs on a daily basis. Depending on applicable laws, a business may be required to release certain information about a new product, such as a general listing of what components make up the new device. Often, patents are filed before the public announcement and sale of the product commences. However, in some countries, the company can move forward with making the public announcement and initiating sales of the product, as long as the patent is properly filed within twelve calendar months of the public disclosure.

When it comes to investments, the proper disclosure of information is an important factor in maintaining the ethics and propriety of any type of investment market. Public disclosure helps to ensure that all investors have access to the same data regarding the performance of various stocks, bonds, and other securities. As such, everyone participating in the marketplace has an equal opportunity to make use of the information as they see fit. This type of public disclosure helps to minimize the occurrence of fraud.

When disclosure fraud is found to take place within an investment market, most markets have policies and procedures to deal with the situation. For example, NASD (National Association of Securities Dealers) disclosure procedures expressly forbid the use of insider information to create investment deals. Should it be determined that illicit trading took place, there are often heavy financial penalties, a suspension of trading privileges, and possibly incarceration if a court of law finds the defendant guilty of insider trading.

Public disclosure can be managed with the use of print media. This medium is often used by companies to make their quarterly and annual earnings known to the general public. Television and radio have long been used to advise the public of new knowledge or events that may be of interest. Today, the use of the Internet to make public announcements and effect disclosure has become very common, with companies posting online press releases, holding investor meetings via web conferences, and even the releases of commercials that are streamed across the Internet.

Press conferences are one way to manage the disclosure of information to the public.
Press conferences are one way to manage the disclosure of information to the public.

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Discussion Comments


SauteePan - I know that financial shows and commercials promoting weight loss products always offer a full disclosure because these fields are prone to lawsuits.

With respect to financial advice there is always a disclosure if the commenter or television owns shares of the company that he is promoting and there is also a disclosure at the end of the show to remind people to seek their own financial advice and that the information offered was only an opinion of the panelist.

This also happens with weight loss products. They usually say that each weight loss claim is unique so that people purchasing the product or service understand that the weight loss is really dependent upon your individual effort.

This is important because people have all sorts of expectations and often want a quick fix to everything.


Comfyshoes - I was trying to buy a short sale and for me it took so long that I wished the sellers would have had an attorney because they could have settled the remaining balance rather than rejecting the short sale because they wanted an additional $70,000 and I as the buyer was not going to pay that and the seller had no more money.

So if you want to go the short sale route consult with a lawyer so that you can save your sanity. I ended up buying a foreclosure that ended up being a better deal. They can also inform you of all of your rights in full disclosure.


Anon94154-I believe that you have to look at your short sale contract.

If it is a recourse contract it means that the bank can sue you for the remainder of the balance of the loan. This usually happens when there is a second mortgage on the property.

Some banks will arrange a payment plan. However, if the short sale is a nonrecourse loan then they cannot.

The best thing to do is to seek a real estate lawyer because short sales can be very frustrating to both the seller and the potential buyer.


Does anyone know how public disclosure can assist a distressed homeowner in the dealings with their lender to ensure the debt amounts "forgiven" are released and settled after a short sale so there can be claim for a deficiency judgment against the homeowner after the event.

I know present federal and CA state law allows this debt forgiveness to occur without recourse by the participating lenders. But I just read something in an article about using Public Notice as a "Leverage" point during negotiations with the lender before they agree to accept a short sale.

Anyone have any insight on this subject?

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