In the aftermath of the GameStop phenomenon in early 2021, there have been increasing calls for expanded mandatory financial disclosures particularly regarding hedge funds and short selling. Efforts to increase disclosure requirements on hedge funds may implicate the Takings Clause of the Fifth Amendment. This comment argues that mandatory disclosure of a firm’s total portfolio—its long, short, and derivative positions—constitutes an uncompensated taking of its trade secrets. This comment explores the application of current takings jurisprudence to trade secrets and financial disclosures. It concludes that the per se rule established in Lucas v. S.C. Coastal Council should apply to public disclosures of trade secrets.
Jay Khurana, Mandatory Financial Disclosures as Total Regulatory Takings, 1 U. Chi. Bus. L. Rev. 519 (2022).