Seems that they also can determine wrongly. So it would seem that it's TPL's responsible for disclosure of information and may be held accountable. I guess in its vagueness there in lies the loopholes. No mention of partnerships between Public/private companies,. Don't you just love the SEC.

http://www.answers.com/topic/sec-dis...

Companies that are privately owned are not required by law to disclose detailed financial and operating information in most instances. They enjoy wide latitude in deciding what types of information to make available to the public. Small businesses and other enterprises that are privately owned may shield information from public knowledge and determine for themselves who needs to know specific types of information. Companies that are publicly owned, on the other hand, are subject to detailed disclosure laws about their financial condition, operating results, management compensation, and other areas of their business. While these disclosure obligations are primarily linked with large publicly traded companies, many smaller companies choose to raise capital by making shares in the company available to investors. In such instances, the small business is subject to many of the same disclosure laws that apply to large corporations. Disclosure laws and regulations are monitored and enforced by the U.S. Securities and Exchange Commission (SEC).

All of the SEC's disclosure requirements have statutory authority, and these rules and regulations are subject to changes and amendments over time. Some changes are made as the result of new accounting rules adopted by the principal rule-making bodies of the accounting profession. In other cases, changes in accounting rules follow changes in SEC guidelines. For example, in 2000 the SEC imposed new regulations to eliminate the practice of "selective disclosure," in which business leaders provided earnings estimates and other vital information to analysts and large institutional shareholders before informing smaller investors and the rest of the general public. The regulation forces companies to make market-sensitive information available to all parties at the same time.

In any event, SEC regulations have a direct impact on what are known as generally accepted accounting principles (GAAP). The rule-making bodies of the accounting profession, most notably the Financial Accounting Standards Board (FASB) and the American Institute of Certified Public Accountants (AICPA), must rely on "acceptance" of their statements. While FASB and AICPA statements do not have the force of law, they are widely accepted in the accounting profession and in some cases influence subsequent SEC rules on disclosure.

Sec Disclosure Obligations

SEC regulations require publicly owned companies to disclose certain types of business and financial data on a regular basis to the SEC and to the company's stockholders. The SEC also requires disclosure of relevant business and financial information to potential investors when new securities, such as stocks and bonds, are issued to the public, although exceptions are made for small issues and private placements. The current system of mandatory corporate disclosure is known as the integrated disclosure system. By amending some of its regulations, the SEC has attempted to make this system less burdensome on corporations by standardizing various forms and eliminating some differences in reporting requirements to the SEC and to shareholders.

Publicly owned companies prepare two annual reports, one for the SEC and one for their shareholders. Form 10-K is the annual report made to the SEC, and its content and form are strictly governed by federal statutes. It contains detailed financial and operating information, as well as a management response to specific questions about the company's operations.

Historically, companies have had more leeway in what they include in their annual reports to stockholders. Over the years, however, the SEC has gained more influence over the content of such annual reports, primarily through amending its rules on proxy statements. Since most companies mail annual reports along with their proxy statements, they must make their annual stockholder reports comply with SEC requirements.

SEC regulations require that annual reports to stockholders contain certified financial statements and other specific items. The certified financial statement must include a two-year audited balance sheet and a three-year audited statement of income and cash flows. In addition, annual reports must contain five years of selected financial data, including net sales or operating revenues, income or loss from continuing operations, total assets, long-term obligations and redeemable preferred stock, and cash dividends declared per common share.

Annual reports to stockholders must also contain management's discussion and analysis of the firm's financial condition and results of operations. Information contained therein includes discussions of the firm's liquidity, capital resources, results of operations, any favorable or unfavorable trends in the industry, and any significant events or uncertainties. Other information to be included in annual reports to stockholders includes a brief description of the business covering such matters as main products and services, sources of materials, and status of new products. Directors and officers of the corporation must be identified. Specific market data on common stock must also be supplied.

REGISTRATION OF NEW SECURITIES. Private companies that wish to become publicly owned must comply with the registration requirements of the SEC. In addition, companies floating new securities must follow similar disclosure requirements. The required disclosures are made in a two-part registration statement that consists of a prospectus as one part and a second section containing additional information. The prospectus contains all of the information that is to be presented to potential investors. It should be noted that SEC rules and regulations governing registration statements are subject to change.

In order to meet the disclosure requirements of new issue registration, companies prepare a basic information package similar to that used by publicly owned companies for their annual reporting. The prospectus, which contains all information to be presented to potential investors, must include such items as audited financial statements, a summary of selected financial data, and management's description of the company's business and financial condition. The statement should also include a summary of the company's material business contracts and list all forms of cash and noncash compensation given to the chief executive officer (CEO) and the top five officers. Compensation paid to all officers and directors as a group must also be disclosed. In essence, a company seeking to go public must disclose its entire business plan.

SECURITIES INDUSTRY REGULATIONS. Additional disclosure laws apply to the securities industry and to the ownership of securities. Officers, directors, and principal stockholders (defined as holding 10 percent or more of the company's stock) of publicly owned companies must submit two reports to the SEC. These are Form 3 and Form 4. Form 3 is a personal statement of beneficial ownership of securities of their company. Form 4 records changes in such ownership. These reporting requirements also apply to the immediate families of the company's officers, directors, and principal stockholders. Individuals who acquire 5 percent or more of the voting stock of a SEC-registered company, meanwhile, must also submit notification of that fact to the SEC.

Securities broker-dealers must provide their customers with a confirmation form as soon as possible after the execution of an order. These forms provide customers with minimum basic information required for every trade. Broker-dealers are also responsible for presenting the prospectus to each customer for new securities issues. Finally, members of the securities industry are subject to reporting requirements of their own self-regulating organizations. These organizations include the New York Stock Exchange (for listed securities transactions) and the National Association of Securities Dealers (for over-the-counter traded securities).

Disclosure Rules of the Accounting Profession

Generally accepted accounting principles (GAAP) and specific rules of the accounting profession require that certain types of information be disclosed in a business's audited financial statements. As noted above, these rules and principles do not have the same force of law as SEC rules and regulations. Once adopted, however, they are widely accepted and followed by the accounting profession. Indeed, in some instances, disclosures required by the rules and regulations of the accounting profession may exceed those required by the SEC.

It is a GAAP that financial statements must disclose all significant information that would be of interest to a concerned investor, creditor, or buyer. Among the types of information that must be disclosed are financial records, accounting policies employed, litigation in progress, lease information, and details of pension plan funding. Generally, full disclosure is required when alternative accounting policies are available, as with inventory valuation, depreciation, and long-term contract accounting. In addition, accounting practices applicable to a particular industry and other unusual applications of accounting principles are usually disclosed.

Certified financial statements contain a statement of opinion from an auditor, in which the auditor states that it is his or her opinion that the financial statements were prepared in accordance with GAAP and that no material information was left undisclosed. If the auditor has any doubts, then a qualified or adverse opinion statement is written.