About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

29 Loy. U. Chi. L.J. 681 (1997-1998)
Kicking the Legalese Habit: The SEC's Plain English Disclosure Proposal

handle is hein.journals/luclj29 and id is 691 raw text is: Kicking the Legalese Habit: The SEC's Plain English Disclosure Proposal I. INTRODUCTION Plain English is like pornography, stated Nancy Smith, a senior official at the Securities and Exchange Commission (SEC). It's hard to define, but you know it when you see it.1 At first blush, this is not encouraging to hear from the official who spearheaded the new plain English proposal to clarify SEC-required prospectuses.2 However, Smith simply meant that since many different writing styles can communicate effectively, an exact formula for success in plain English is difficult to define.3 Instead, identifying poorly written documents may be an easier task. In its plain English proposal, the SEC seeks to eliminate the many features that make writing difficult to understand. Corporate prospectuses are the main target of the SEC's plain English initiative. Although disclosure documents are the primary ways that the corporate community communicates with investors,'6 many corporate attorneys fail to provide investors with meaningful information. Instead, the attorneys draft prospectuses solely to protect the corporation from legal liability.7 Thus, over time the prospectuses 1. David S. Felman, The SEC's Plain English Initiative, SB69 A.L.I. ABA 331, 343 n.6 (1997) (quoting J. Peder Zane, Mutual Funds: For Investors, an Initial Public Offering of English, N.Y. TIMES, Aug. 25, 1996, § 3, at 7). Smith is the director of the Office of Investor Education and Assistance at the SEC, the group that leads the plain English movement for SEC filings. See OFFICE OF INVESTOR EDUC. AND ASSISTANCE, U.S. SEC, A PLAIN ENGLISH HANDBOOK: How TO CREATE CLEAR SEC DISCLOSURE DOCUMENTS. 2. See Plain English Disclosure, 62 Fed. Reg. 3152, 3152 (1997) (to be codified at 17 C.F.R. pts. 228, 229, 230, 239) (proposed Jan. 21, 1997). The SEC proposed similar revisions for regulations governing small business issuers. See 17 C.F.R. § 228.10 (1997). 3. See OFFICE OF INVESTOR EDUC. AND ASSISTANCE, U.S. SEC, supra note I (draft at 9, on file with the author). 4. See Plain English Disclosure, 62 Fed. Reg. at 3152. 5. See id. (discussing the SEC Task Force on Disclosure Simplification's finding that boilerplate language and repetitive disclosure problems are magnified by the complex nature of the securities market). 6. See Isaac C. Hunt, Jr., Plain English-Changing the Corporate Culture, 51 U. MIAMI L. REV. 713, 713-714 (1997). Hunt has served as Commissioner of the SEC since February 29, 1996 until the date of publication. See id. at 713. 7. See id. at 714. Practitioners must be aware not only of the SEC rules, but also of the rules of the Justice Department, the Federal Trade Commission, the states, and of

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most