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Jonathan Weil

Why Give Hedge Fund Raiders 10 Days to Disclose?

Why shouldn't major investors have to disclose large stakes in companies sooner?
Bill Ackman had a lot of time on his hands thanks to some outdated disclosure rules. Photographer: Peter Foley/Bloomberg
Bill Ackman had a lot of time on his hands thanks to some outdated disclosure rules. Photographer: Peter Foley/Bloomberg

Bill Ackman's hedge fund, Pershing Square Capital Management LP, acquired 9.7 percent of Allergan Inc. in less than two months without having to disclose this fact until yesterday. Is there something wrong with that?

Not according to the rules, which date to the 1960s. But it's also true that the disclosure regulations in this area are a mess -- a throwback to the days before electronic filing or widespread use of overnight mail. They say outside investors must disclose their stakes publicly within 10 days after reaching the 5 percent mark, an amount of stock that regulators have deemed to be important.