{
 "@context": "https://schema.org",
 "@type": "DefinedTerm",
 "@id": "https://wulfkaal.github.io/entities/disclosure-failure",
 "identifier": "kaal:entity:disclosure-failure",
 "name": "Disclosure failure",
 "termCode": "disclosure-failure",
 "inDefinedTermSet": {
  "@id": "https://wulfkaal.github.io/entities/index.json"
 },
 "author": {
  "@type": "Person",
  "name": "Wulf A. Kaal",
  "identifier": "https://orcid.org/0000-0003-0757-275X"
 },
 "dateModified": "2026-07-29",
 "canonicalForm": "https://wulfkaal.github.io/entities/disclosure-failure.md",
 "sha256": "c0a63de74d21791844a001137ba4fdd0787c5e939ae226374ba98cfd1fb92a14",
 "additionalProperty": [
  {
   "@type": "PropertyValue",
   "name": "status",
   "value": "derived"
  },
  {
   "@type": "PropertyValue",
   "name": "claim_count",
   "value": 4
  },
  {
   "@type": "PropertyValue",
   "name": "work_count",
   "value": 1
  },
  {
   "@type": "PropertyValue",
   "name": "year_span",
   "value": [
    "2010",
    "2010"
   ]
  },
  {
   "@type": "PropertyValue",
   "name": "non_current_claims",
   "value": 0
  }
 ],
 "subjectOf": [
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/1558614-001",
   "identifier": "kaal:claim:1558614-001",
   "text": "German banks' exposure to CDO risk ran through credit enhancement and liquidity guarantees given to off balance sheet conduits, and because that exposure was often kept out of their accounting the inherent risk only surfaced once the CDO market collapsed.",
   "abstract": "was often hidden and not included in their accounting. The in- herent risk of the guarantees to the banks, however, became appar- 10 ent when the market for CDOs collapsed.",
   "citation": "Painter and Kaal, Initial Reflections on an Evolving Standard Constraints on Risk Taking by Directors and Officers in (2010). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1558614",
   "datePublished": "2010",
   "claim_type": "failure",
   "confidence": "evidenced",
   "is_failure_mode": true,
   "scope_conditions": [
    "banks guaranteeing conduits located outside German banking supervision",
    "guarantee exposure not consolidated into bank accounts"
   ],
   "source_pdf_sha256": "e898211630f4116879329d6de8397523dca5b066864147421aa5cbc7429dc83b",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/1558614-029",
   "identifier": "kaal:claim:1558614-029",
   "text": "Routine engagement in highly complex transactions lets public companies conceal risky transactions from investors and even from their own directors, which is a structural weakness in the supposedly rigorous U.S. disclosure regime.",
   "abstract": "Public companies that engage in highly complex transactions as a matter of course can easily conceal risky transactions from investors. Indeed, management can also conceal these transactions from the company's own direc- 160 tors.",
   "citation": "Painter and Kaal, Initial Reflections on an Evolving Standard Constraints on Risk Taking by Directors and Officers in (2010). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1558614",
   "datePublished": "2010",
   "claim_type": "failure",
   "confidence": "evidenced",
   "is_failure_mode": true,
   "scope_conditions": [
    "companies whose ordinary business consists of highly complex transactions"
   ],
   "source_pdf_sha256": "e898211630f4116879329d6de8397523dca5b066864147421aa5cbc7429dc83b",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/1558614-030",
   "identifier": "kaal:claim:1558614-030",
   "text": "The more a country leads in financial innovation, the more exposed its disclosure regime is to misrepresentation and fraud, which makes the U.S. regime more vulnerable than Germany's despite being formally stricter.",
   "abstract": "to the extent financial innovation in the United States is ahead of that in Germany, the U.S. disclosure regime may be more vulnerable to misrepresentation and fraud",
   "citation": "Painter and Kaal, Initial Reflections on an Evolving Standard Constraints on Risk Taking by Directors and Officers in (2010). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1558614",
   "datePublished": "2010",
   "claim_type": "mechanism",
   "confidence": "argued",
   "is_failure_mode": true,
   "scope_conditions": [
    "assumes U.S. financial innovation runs ahead of German financial innovation"
   ],
   "source_pdf_sha256": "e898211630f4116879329d6de8397523dca5b066864147421aa5cbc7429dc83b",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/1558614-034",
   "identifier": "kaal:claim:1558614-034",
   "text": "The U.S. approach left both of its risk controls ineffective: the securities disclosure regime failed to prevent the 2008 financial crisis, while the expansive business judgment rule that permitted the risk taking in the first place survived the crisis unchanged.",
   "abstract": "The much-touted U.S. securities disclosure regime failed to prevent the 2008 financial crisis, yet the expansive U.S. version of the business judgment rule in cor- porate law that allowed the risk taking to begin with has remained in- tact.",
   "citation": "Painter and Kaal, Initial Reflections on an Evolving Standard Constraints on Risk Taking by Directors and Officers in (2010). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1558614",
   "datePublished": "2010",
   "claim_type": "failure",
   "confidence": "argued",
   "is_failure_mode": true,
   "scope_conditions": [],
   "source_pdf_sha256": "e898211630f4116879329d6de8397523dca5b066864147421aa5cbc7429dc83b",
   "status": "current"
  }
 ],
 "description": "4 claims in the published works of Wulf A. Kaal carry the concept tag 'disclosure-failure'. Derived node: a roster, not an adjudicated definition."
}