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Disclosure

Disclosure

In the financial world, disclosure refers to the timely release of all information about a company that may influence an investor's decision. It reveals both positive and negative news, data, and operational details that impact its business.

Similar to disclosure in the law, the concept is that all parties should have equal access to the same set of facts in the interest of fairness.

The Securities and Exchange Commission (SEC) develops and enforces disclosure requirements for all firms incorporated in the U.S. Companies that are listed on the major U.S. stock exchanges must follow the SEC's regulations.


A disclosure statement is a document provided by the seller of a property that details negative aspects of the property. Leaks in the ceilings, plumbing issues, insect infestations, and even problem neighbors can and should be included in a disclosure statement. Any repair or remodeling work done by the seller should also be disclosed, including any applicable permits required for the work. Disclosure statements provide a potential buyer with information relevant to the buyer's decision to go ahead with a purchase. Regulations for disclosures vary from state to state, with some states imposing more stringent requirements. Failure to disclose pertinent information about serious issues can result in a judgement for punitive damages against the seller in an action known as "allegations of failure to disclose." The disclosure document provided by the seller is a legally binding document and is admissible in court.

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