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Your Questions, Our Answers: SEC Comment Letters

    Client Alerts
  • March 07, 2013

Q: If the opening paragraphs of an SEC comment letter or the comments themselves indicate that amending my 10-K or 10-Q is required, is that my only option?

A: Not necessarily.

Even if you don’t see the magic words “in future filings,” an amendment of your periodic report may not be your only option. It is important to remember that in most cases, the SEC views the comment letter process as a dialogue with the company. The introductory paragraph that starts, “Please respond…by amending your filing…” does not mean that the SEC will not entertain reasonable arguments for “future filings” treatment of some or all of the comments.

Don’t be reluctant to call your examiner. They are almost always receptive to discussing the comments. A back and forth conversation can help you understand the comments and respond to them more appropriately.

Be prepared to clearly explain why your proposed changes should be made in future filings. The changes might be good disclosure but not material and the SEC cannot determine materiality without the information you are prepared to provide. It may be that the disclosure appeared elsewhere in the report and the comment is more along the lines of a conforming change. Hopefully, you can leave the conversation with “future filings” treatment and be able to respond to the comment letter in writing with issues already settled.

There is one exception. If a company has responded to past comments with a promise to address the disclosure in future filings and does not follow through on that promise, the SEC is far more likely to require an amendment even if the change is relatively minor.


Additional Articles from the Winter 2013 Public Company Forum:


Doug’s Note: Crisis Management

Potential Pitfalls of Employer-Owned Life Insurance

The Burden of Independence

Between a Rock and a Hard Place: The Remix