At The Money: Finding the Hidden Alpha in SEC filings

Summary of At The Money: Finding the Hidden Alpha in SEC filings

by Bloomberg

16m•December 3, 2025
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Overview of At The Money: Finding the Hidden Alpha in SEC filings

This episode of Bloomberg’s At The Money (host Barry Ritholtz) features Michelle Leder, founder of Footnoted and author of Financial Fine Print. Leder explains how to read corporate SEC filings to uncover information management may be minimizing or hiding, why small-footnote items and filing metadata can predict bigger problems, and how investors can turn careful reading (and modern tools) into an informational edge.

Who’s speaking

  • Host: Barry Ritholtz (Bloomberg)
  • Guest: Michelle Leder — SEC filings specialist, founder of Footnoted, author of Financial Fine Print

Key topics covered

  • Basic disclosure framework (rooted in the 1933 Act)
  • Core SEC filings and their purposes: 10-Q, 10-K, 8-K, proxy statements, comment letters, Wells notices
  • What “material” disclosure means and why it’s subjective
  • Common management tactics to minimize attention to bad news
  • Metadata and filing behavior as red flags (late or amended filings)
  • Real examples where small disclosures presaged major problems (Zoetis, Nikola)
  • Use of AI and specialized tools in preparing filings and in investigative research (e.g., FinTool)

Main takeaways and insights

  • The legal disclosure framework dates back to the 1933 Act; modern markets have evolved but the foundation remains old and lawyer-driven.
  • Materiality is judgement-based: what’s material to one investor may not be to another — there’s no bright-line test.
  • Companies often technically comply while minimizing attention: “Companies know they have to disclose bad news, but they also know they don't have to post it on a billboard.”
  • Small, seemingly minor footnotes and odd filing behavior can be early warning signs ("breadcrumbs") of larger problems.
  • Metadata matters: repeated late filings, frequent amendments, and timing (Friday night dumps, holiday disclosures) are useful signals.
  • AI is being used both to generate filings/scripts and to analyze filings. Verticalized AI tools (e.g., FinTool) can help detect patterns faster than manual digging.

Notable examples from the episode

  • Zoetis: Footnoted flagged safety issues in a veterinary drug (Vibrela/Vibrio? — drug name as recalled from the conversation) that were underplayed by the company; seizures and deaths in dogs were linked to the drug.
  • Nikola: A seemingly minor disclosure about an executive resignation was an early sign of deeper problems; the company later filed for bankruptcy.

Common management tactics to watch for

  • Timing disclosures to minimize attention (late Friday, holidays) while remaining within the four-business-day rule.
  • Giving the bare minimum of facts in 8-Ks and other filings (non-disclosure disclosure): omitting context such as committee membership or tenure.
  • Using vague language (e.g., changing “subpoena” to “subpoenas”) to downplay ongoing issues.
  • Burying serious items in risk factors, legal disclosure sections, or in the earnings queue rather than in a headline press release.

Filing types and what to monitor

  • 10-Q: Quarterly report — minimum requirement (three per year)
  • 10-K: Annual report — comprehensive financials and risk discussion
  • 8-K: Current report for material events (filed as needed; triggers are subjective)
  • Proxy statements: useful to cross-reference director roles, executive tenures, and conflicts
  • Comment letters: SEC asks for clarification — often minor
  • Wells notice: indicates the SEC is planning enforcement — often material but sometimes delayed in disclosure

Practical checklist for investors / traders

  • Set alerts on 8-Ks and 10-Q/Ks for companies you hold or follow.
  • Watch timing: Friday late filings, holiday filings, or filings placed in an earnings queue can be attention-minimizing tactics.
  • Look for repeated late filings or repeated amendments — pattern recognition matters.
  • Cross-reference disclosures: if an 8-K reports a director or exec resignation, check the proxy for role details (audit committee? chairman?).
  • Read footnotes and legal sections — they often contain substantive facts that aren’t in headline statements.
  • Track management turnover (especially unexplained departures of named executives).
  • Monitor SEC comment letters and (if disclosed) Wells notices; even a disclosed comment letter can be informative.
  • Use specialized tools or vertical AI (like FinTool) to find patterns, count historical events, and surface anomalies quickly.

How AI fits in

  • AI is increasingly used to draft filings and scripts (conference calls, earnings scripts).
  • AI tools are also being deployed to analyze filings at scale, detect patterns, and answer targeted questions (e.g., how many CFOs a company has had).
  • Verticalized AI built specifically for SEC filings tends to be more effective than generic chat models, but human review remains essential.

Actionable recommendations (short)

  • If you invest in small/mid/specialty companies or trade earnings/speculative names, make SEC filings part of your due diligence.
  • Focus on metadata (timing, lateness, amendments), footnotes, and inconsistencies rather than only headlines.
  • Use alerts and specialized tools to scale monitoring; validate AI findings manually.

Memorable quote

  • “Companies know they have to disclose bad news, but they also know they don't have to post it on a billboard.” — Michelle Leder

This episode is a practical primer on finding “hidden alpha” in filings: the disclosures companies bury can be a valuable edge if you know the right places to look and how to interpret the signals.