The Researcher the SEC Cited Says It's Wrong

Introduction

Paul Atkins spent 16 years running a consulting firm that advised Goldman Sachs, Fidelity, and Bank of America on how to handle SEC compliance. In July 2025, three months into his job as SEC chair, he sold his stake in that firm for somewhere between $25 and $50 million, and the government handed him a certificate that let him defer the capital-gains taxes for being a public servant. Ten months later, the SEC he runs formally proposed making quarterly financial reports optional — for the same companies that had been paying his old firm to navigate those reports for years.

The loudest outside voice cheering the change is Jamie Dimon, who runs JPMorgan and chairs the Business Roundtable, the executive lobbying group that spent $33.5 million in Washington last year. The last SEC piece here was about who Atkins stopped investigating; this one is about what he's now letting companies hide from you.

What "Optional" Actually Means for Your 401(k)

Since 1970, every public company in the U.S. has had to tell its investors what happened to their money every three months. That's the Form 10-Q: the income statement, the balance sheet, the management discussion of what went right and wrong. On May 5, 2026, the SEC proposed making that filing optional, letting companies report twice a year instead of four times. The framing from the agency is deregulatory relief: less paperwork, lower costs, a fix for corporate "short-termism." Atkins is selling it under a banner he calls "Make IPOs Great Again."

Here's the part the paperwork framing skips. Roughly 160 million Americans own stock, mostly through 401(k)s and IRAs holding a combined $49.1 trillion in retirement assets. The proposal touches 5,976 companies required to file quarterly today. If a company you're invested in elects the new schedule, you lose verified financial data on it for up to six months at a stretch. The executives won't lose anything; they see the numbers in real time. You'd be reading a year that's already half over.

So the rule moves information advantage away from the people whose retirement savings ride on these companies and hands it to the companies themselves, plus a smaller set of insiders who get to decide when bad news becomes your problem. The SEC chair who designed it built his career on the other side of that table, advising the firms that gain the most.

The Researcher the SEC Cited Says It's Wrong

The intellectual case for the rule rests on "short-termism," the idea that quarterly reporting makes CEOs obsess over the next three months instead of building for the long run. To support it, the SEC's proposal leans on academic work, including a paper by Shivaram Rajgopal, Cam Harvey, and John Graham showing that executives sometimes cut things like R&D to hit an earnings target.

Rajgopal read the proposal and wrote a response in Forbes the same day it dropped. His verdict: "Our paper does not ask for a rule to eliminate quarterly reporting." The pressure CEOs feel, he argues, comes from the whole machinery around the reports (analyst consensus estimates, quarterly guidance, pay packages tied to EPS), not from the existence of the 10-Q itself. His line is the cleanest summary of the whole problem: "The 10-Q is the scoreboard, not the game. Removing the scoreboard does not change how the game is played."

When the agency points to research to justify a rule, and the person who did the research says publicly that it doesn't justify the rule, the conclusion came first and short-termism got recruited afterward as cover.

What Goes Dark Between Reports

The SEC's pushback is that companies still have to file a Form 8-K within four business days of any major event, so material news can't hide. True, but an 8-K only tells you that something happened, not what it did to the financials.

Say a company loses its biggest customer. The 8-K reports the loss. The 10-Q would have shown what that loss did to revenue, to margins, to the debt covenants on its loans. Under semiannual reporting, that financial picture stays hidden for up to six months. And plenty never crosses the 8-K threshold at all. Bloomberg Law notes that "not every development affecting an issuer's financial condition, business, or operations meets the threshold of materiality." A quarter of quietly deteriorating margins, a slow slide toward a missed loan covenant, layoffs too small to register as a material event, the early signs of an inventory glut: none of that has to surface until the next filing. The law firm Sidley Austin points out a tell. Semiannual filers may need longer trading blackout windows for their own executives, precisely because those insiders would be sitting on material nonpublic information for longer stretches between disclosures.

So who pays for the gap? The SEC's economic analysis answers it, in the agency's own words: "A reduction in the frequency of interim reporting could result in delayed disclosure of material information, reduced comparability, and some lost information." Against that, the savings it advertises run to about $198,000 a year per company that switches, money that flows to the company and its executives.

Who Benefits

Start with the obvious winner: large-cap companies with quarters they'd rather you not see in real time. A company heading into a write-down, an ugly acquisition, or a stretch of falling margins gets to control the clock. A bad first quarter that's public within about 45 days today could wait for the half-year filing instead. The savings are real but small; the value is in the timing. The political framing keeps invoking struggling small biotechs, but the companies that gain the most are the large ones with the resources to manage the optics of when bad news lands.

The clearest signal of who's interested came from the top. Berkshire Hathaway's 2025 annual report, the first under new CEO Greg Abel, told shareholders: "We concentrate on quality, not frequency. If a significant issue arises, you will hear from me, but it will not be through quarterly commentary, given our long-term horizon." Abel was describing how Berkshire talks to shareholders, not making a promise to drop the 10-Q, and he hasn't said a word about the proposal directly. But it's the language of a company already minimizing quarterly disclosure, sitting on more than $397 billion in cash as of early 2026, and a plausible early adopter the moment the rule clears.

Then there's the political tier. Atkins gets a deregulatory win and structural alignment with his old Patomak clients: Goldman Sachs, Fidelity, Bank of America, the Chamber of Commerce. He built his firm advising those same clients on the disclosure regime, sold it on his way into government with the taxes deferred, and is now using the chairmanship to thin out the very rules that generated the billings. Dimon's Business Roundtable gets reduced compliance costs and the option to delay bad news, reason enough for a lobbying group that put $33.5 million into Washington last year. It's the same client list and the same disclosure rules he used to bill against — except now he's the one writing them.

The people on the other side of the ledger are the 160 million Americans whose retirement money sits in these companies, plus the smaller investors who can't buy their way around the information gap. That last point isn't speculation. Citadel, Ken Griffin's hedge fund and no one's idea of an investor-protection charity, warned the SEC that semiannual reporting would hand an edge to firms that can pay for costly alternative data: satellite imagery of parking lots, credit-card transaction feeds, the kind of private intelligence a 401(k) will never see. Big funds will fill the six-month void with data your retirement account has no way to buy.

The UK Already Ran This Experiment

We don't have to guess what "optional" does over time, because the UK tried it. Britain mandated quarterly reporting in 2007, then dropped the requirement in November 2014. The economists who studied both moves (Rajgopal among them) found that reporting frequency had no measurable effect on corporate investment in either direction. Cutting the reports did nothing for the short-termism the rule is supposed to fix.

What happened next is the part the "it's optional, the market will sort it out" defense leaves out. In the first year after 2014, fewer than 10% of UK companies actually stopped quarterly reporting. The market kept demanding the data, so the "optional" rule looked harmless. Then the drift set in. By 2017, over 40% of the FTSE 100 and over 60% of the FTSE 250 had quietly gone semiannual. The London Stock Exchange spent the following years struggling to attract and keep listings, the opposite of the IPO renaissance the deregulatory pitch promised. Optional today tends to mean standard in a few years, once enough companies go first and the rest stop wanting to look like the odd one out.

The other side has a real argument. The 10-Q burden does fall hardest on small companies: a pre-revenue biotech waiting on an FDA decision genuinely may have little to report quarterly, the 8-K regime is faster than the one that existed in 1970, and the rule is, technically, optional. But the small-company case is being used to justify a change whose real value accrues to the large caps, and the UK's own experience says the optionality erodes. Even Wall Street isn't buying it: Fidelity, BlackRock, T. Rowe Price, and Citadel have all warned against it. As Better Markets put it, if the big investment firms think it's a bad idea and the investor advocates think it's a bad idea, the question is why the SEC wants it so badly.

The Bottom Line

The cleanest fact in this entire story is the one the SEC wrote about itself: cutting reporting frequency "could result in delayed disclosure of material information." It's proposing the rule anyway, on the strength of a short-termism argument the cited researcher has publicly disowned, run by a chairman who spent 16 years and banked up to $50 million advising the firms that stand to gain.

The comment period closes July 6, 2026. Until then, the public record on this rule is still being written, and the SEC is legally required to read what gets submitted. The open question is whether 160 million people whose retirement savings depend on knowing what their companies are worth will say anything before the firms that would rather they didn't get the last word.