Digging in and digging deep…

November 7, 2003

I’m all for full disclosure, but when a single footnote is longer than a typical short story, investors really need to ask themselves whether it’s worth the work. Such is the case at tobacco company RJ Reynolds (RJR) . In the 10-Q it filed earlier today, it devoted 29 pages (out of 44) to the various lawsuits the company is facing. Most of those, as would be expected, have to do with cancer and smoking. But buried deep within that one footnote, is additional disclosure on the legal fight RJR is waging with the SEC. Back in July, the SEC issued a subpoena to get RJR to provide more information to its investors on the costs of tobacco litigation and RJR ignored the subpoena. So in August, the SEC sued to get RJR to comply. But RJR is digging in its heels and fighting the SEC. In the 10-Q, it notes that the matter is now pending before US District Court in Washington. Of course, providing so much fine print in the 10-Q could be part of RJR’s argument that it isn’t trying to hide anything from investors.

Leave a Reply

You must be logged in to post a comment.