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93 Tex. L. Rev. See Also 1 (2014-2015)

handle is hein.journals/seealtex93 and id is 1 raw text is: Texas Law Review See Also Volume 93 Response A Reply to Mind the GAAP Tom Fulkerson* & Nick Brown** In Mind the GAAP: Moving Beyond the Accountant Attorney Treaty, author Jamie Yarbrough contends that investors are often left unprotected by current disclosure requirements for financially material litigation.' To cure that ill, the author proposes that issuers be required to disclose the settlement offers they make in all material litigation, reasoning, in part, that they are already voluntarily disclosing those assessments of the case to their opponent.2 Unfortunately, the author applies a flawed method of evaluating the benefits of the proposed regulatory change, supports the argument for change by examples that contradict it, and fails to recognize the serious negative consequences of reporting settlement offers on both the settlement and judicial processes. A more focused application of current rules or the creation of a presumption of fraud in the event of underreporting is more likely to protect investors than the proposed change. I. Do We Have A Problem? Rather than proving that underreporting of major litigation events and resultant stock price changes are common, the author merely claims that the possibility of such losses is hardly a fantasy.3 To compel change, particularly one as potentially disruptive as the author proposes, more should * Tom Fulkerson is the founding partner of Fulkerson Lotz LLP. ** Nick Brown clerks for the Hon. Gregg J. Costa of the United States Court of Appeals for the Fifth Circuit and will be joining Fulkerson Lotz in the fall of 2015. Many thanks to Kelly Kirkland for his helpful comments. 1. Jamie L. Yarbrough, Note, Mind the GAAP: Moving Beyond the Accountant Attorney Treaty, 92 TEXAS L. REv. 749, 749 (2014). 2. Id. at 760. 3. Id. at 749.

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