One of the many infuriating airline industry “innovations” over the past several years has been the practice of charging an additional fee for a priority boarding slot. So, I was a little surprised that two prominent law professors recently suggested applying a variation of this priority access model to corporate disclosures:
In our recent article, Making a Market for Corporate Disclosure, we argue that the under-disclosure concern could be addressed in a far broader way by constructing a well-regulated market for tiered access to corporate disclosure. We contemplate a transparent market for early-access rights to corporate information. In this market, firms could sell access to information that they soon would release to the public.
For example, when they have new information that they are willing to share with the public, firms could offer a well-advertised early peek—say, starting at 11:00 a.m.—to anyone willing to pay the market price for it. So long as firms had to make any selectively released disclosure products with material information available to the public by, say, 1:00 p.m., market supply of and demand for those products could generate improved public disclosure. All the while, the current floors of mandatory disclosure need not be changed.
Law professors love ideas like this (anybody up for legalizing insider trading?), but I dunno guys – I’m not sure there’s any aspect of the airline industry that I’d suggest anybody use as a model for anything.
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Transcript: “M&A Stories – Practical Guidance (Enjoyably Digested)”
We have posted the transcript for the recent DealLawyers.com webcast – “M&A Stories: Practical Guidance (Enjoyably Digested).”
– John Jenkins