Sunlight on Iran: How Reductive Standards of Materiality Excuse Incomplete Disclosure Under the Securities Laws

U.S. federal securities law protects investors by requiring companies to disclose information that is "material," information that would be significant to a reasonable person making an investment decision. This article examines the doctrine of materiality as it is currently being used by reporting companies to avoid disclosure of activities in Iran. The Securities and Exchange Commission's reductive standard relies on notions of informational efficiency made implausible after the financial crisis, undercuts crucial U.S. foreign policy, and fails to protect investors. Consequently, this article argues that the Securities and Exchange Commission should use a broader understanding of materiality.