The issue of early warnings from companies that know their quarterly earnings are poor may be more an ethical than a legal one. The guess that is so is based on the number of public corporations that keep this kind of information from shareholders until the preannounced date for their earnings releases and calls. Often, these releases are many weeks after a quarter closes, so managements know the score well before they disclose it. That means many investors will hold shares while earnings are kept under wraps by troubled companies.

Among the best examples of this problem are badly damaged retailers like J.C. Penney Co. Inc. (NYSE: JCP). The company already knows its first-quarter results, or at least the great majority of them. There is only a week left in the quarter. The information certainly has been passed on to the board. This board may have decided already the fate of CEO Ron Johnson because of these numbers. That is a great deal to be kept from stockholders who might sell the balance of their holdings if only they knew the details as well.

J.C. Penney is not alone as a candidate for a bad earnings surprise. Based on recent history, some of the Web 2.0 companies qualify, in particular Groupon Inc. (NASDAQ: GRPN). Earnings forecasts for the online coupon business are always a crapshoot. As is the case with J.C. Penney, management and the board are privy to results that are nearly complete before a quarter’s end.

The list of public company candidates for early disclosure is hundreds long, or dozens among America’s largest corporations, which stretch from badly damaged Hewlett-Packard Co. (NYSE: HPQ), which suddenly wrote off $5 billion because of mistakes in its buyout of Autonomy, to General Motors Co. (NYSE: GM) with its information about its money-losing European operations that have compromised global earnings for years.

Until the federal government takes up the matter of when managements and boards have vital information, and when that information is given to shareholders, these shareholders will be at a tremendous risk of posting trading losses well after a quarter ends.

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