Abstract
Part II of this Comment outlines the current Regulation S-K: Item 105 requirements and the cases establishing the different Item 105 disclosure standards of the Third, Second, and First Circuits, including the Third Circuit’s hindsight 2020 standard requiring the disclosure of unknown risk, the Second Circuit’s uncharged and unadjudicated standard and the First Circuit’s actual knowledge standard. Part III will analyze the appropriate Item 105 standard in light of SEC guidance and Item 105. Specifically, this Comment will argue that M&T complied with SEC guidance and the text of Item 105, which the Third Circuit failed to properly apply in its holding. Finally, Part IV will recommend that the SEC end the confusion around Item 105 by clarifying the appropriate standard through rulemaking or guidance adopting the Second and First Circuits’ interpretations. Additionally, the Supreme Court should grant certiorari to future appeals from circuit court decisions with similar circumstances to M&T’s and affirm the standards of the Second and First Circuits’ interpretations of Item 105 disclosure requirements.