Sunlight Is the Best Disinfectant

The Securities and Exchange Commission and shareholders of public companies alike have both been helped by a 2004 policy shift that allowed the sun to shine on the agency’s previously private comment letters to companies, according to a new study by Carroll School of Management Professors Amy Hutton and Susan Shu (Accounting), along with Xin Zheng of the University of British Columbia. The researchers find that greater SEC transparency has led to better enforcement and worthier shareholder suits.