Plain English: A Reappraisal of the Intended Audience of Disclosure under the Securities Act of 1933
![handle is hein.journals/scal72 and id is 861 raw text is: PLAIN ENGLISH: A REAPPRAISAL OF
THE INTENDED AUDIENCE OF
DISCLOSURE UNDER THE
SECURITIES ACT OF 1933
KENNETH B. FIRTEL*
I. INTRODUCTION
Over the years, bitter debate has surrounded the issue of for whom se-
curities disclosure is intended. The Securities and Exchange Commission
(SEC) has maintained that disclosure should be geared toward all types
of investors, from the average investor to the professional financial ana-
lyst. Certain critics, however, contend that disclosure documents are too
complicated to be used effectively by the layperson and should be used
only by sophisticated investors.1 The SEC has responded to this argument
with consistent efforts to make disclosure documents more readable and
understandable in an attempt to show that disclosure can be geared toward
the average investor.2 The most aggressive of these efforts has been the
plain English disclosure rules, which the SEC adopted on January 22,
1998.3
Plain English stems from an Anglo-American legal tradition whereby
famous scholars have continually called for the reform of legal writing to
* Class of 1999, University of Southern California School of Law; B.A. 1994, Yale Univer-
sity. I would like to thank Professor William Bogaard for his guidance; Shannon Rust for her sugges-
tions; Walt Burkley for his valuable insight; and my family for their support.
1. See infra Part III.
2. See infra Part IV.
3. See generally Plain English Disclosures, Securities Act Release No. 7380, [1997 Transfer
Binder] Fed. Sec. L. Rep. (CCH) 85,879, at 85,907 (Jan. 14, 1997) [hereinafter Proposed Plain Eng-
lish Rules]; Plain English Disclosure, Securities Act Release No. 33-7497, 63 Fed. Reg. 6370 (1998)
[hereinafter Final Plain English Rules].](ViewImageLocal?handle=hein.journals/scal72&div=33&collection=&method=preview&ext=.png&size=3)
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Plain English: A Reappraisal of the Intended Audience of Disclosure under the Securities Act of 1933
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