In this session, John Netto—attorney, investor, and Market Wizard—walks attendees through one of the most misunderstood and underutilized sources of market information: loss contingency disclosures in public company financial reports.
Most investors encounter these footnotes and see uncertainty, legal boilerplate, and vague language designed to obscure risk. Courts, however, guided by Accounting Standards Codification 450 (ASC 450), do not treat these disclosures as vague at all. They are grounded in legal standards, counsel assessments, and evidentiary thresholds that impose real constraints on how companies characterize potential losses.
John explains what loss contingencies are, how they are governed under accounting rules, and how legal counsel, management, and auditors collectively shape what ultimately appears in financial statements. He then bridges the gap between accounting disclosure and legal reality, showing how markets initially price that information—and how to invest around it.
Attendees will learn how to read loss contingency statements through both a legal and market lens, identify when disclosures are masking asymmetric downside or upside, and understand how changes in probability, estimability, or litigation posture can trigger sudden repricing events.