Public disclosure is the act of willingly presenting new information to the general public, often managed through print, press conferences, or electronic media. Laws in many countries govern what information must be disclosed, with corporations often at the center of disclosure activity. Proper disclosure is important in investing to maintain ethics and minimize fraud. Print, television, and the internet are common mediums for public disclosure.
Public disclosure is a situation in which information that was not previously known to the general public is willingly presented or disclosed to the population. Disclosures of this type are common in corporate operations, utilities and the investment world. There are several ways to manage the public outreach process, including the use of print media, press conferences, and electronic media such as television or the Internet.
In many countries, there are specific laws governing the public disclosure process. These disclosure rules not only specify what types of information must be disclosed to the public, but also often define what types of information are not subject to disclosure. For example, disclosure laws might require food companies to publicly identify the ingredients in their products, but not require the amount of each ingredient used in the final product.
Corporations are usually at the center of much of the public disclosure activity that takes place on a day-to-day basis. Depending on applicable laws, a company may be required to release certain information about a new product, such as a general list of what components make up the new device. Often, patents are filed before the public announcement and sale of the product begins. However, in some countries, the company may proceed with publicly announcing and initiating sales of the product, provided the patent is properly filed within twelve calendar months of public disclosure.
When it comes to investing, proper disclosure of information is an important factor in maintaining the ethics and ownership of any type of investment market. Public disclosure helps ensure that all investors have access to the same data about the performance of various stocks, bonds and other securities. Therefore, everyone who participates in the market has an equal opportunity to use the information as they see fit. This type of public disclosure helps minimize the occurrence of fraud.
When information fraud is detected within an investment market, most markets have policies and procedures in place to deal with the situation. For example, the disclosure procedures of the National Association of Securities Dealers (NASD) expressly prohibit the use of inside information to create investment deals. If an illicit trade were to be found to have taken place, there are often heavy financial penalties, a suspension of trading privileges, and perhaps imprisonment if a court finds the defendant guilty of inside trading.
Public disclosure can be handled with the use of print media. This medium is often used by companies to disclose their quarterly and annual earnings to the public. Television and radio have long been used to inform the public of new knowledge or events that may be of interest. Today, using the Internet to make public announcements and disseminate bills has become very common, with companies posting press releases online, holding investor meetings via web conferences, and even advertising releases being streamed over the Internet.
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