How do sunshine laws help investors?

By Steven Merkel AAA
A:

Sunshine laws are U.S. federal and state laws that require regulatory authorities' meetings, decisions and records to be made available to the public. Sunshine laws were first created in the mid-1970s in a bid to increase public disclosure of governmental agencies. Sunshine laws do not allow all citizens to attend meetings, but they do ensure that media and representatives of the public can attend. In addition, the Freedom of Information Act requires agencies to share information they have obtained with the public, allowing their decisions and records to be disclosed.

The disclosure of information due to implementation of sunshine laws gives investors a fair opportunity to review public documents prior to investing in government- or agency-related securities. Investors can review financial statements and other meeting decisions that might affect the performance or underperformance of a particular investment prior to purchase. These essential laws also afford citizens the ability to see behind the curtain of government and remain involved in the processes that affect their lives and any investments they might have made in relation to the government entity. Sunshine laws force governments to maintain accountability, which is critical to keeping the government on sound footing.

For more on this topic, read The Federal Reserve: Introduction.

This question was answered by Steven Merkel.

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