Followup on rules for public companies

Had a good idea last night, wanted to write it down. The more I think about it, the more I think it's awesome. We can call it Nick's rule of disclosure:

If the stock price of an public company declines more than 10% relative to the average for its industry, and/or public trading of the stock is suspended, and this event is not immediately proceeded by a public SEC filing of a disclosure or press release for a material precipitating event not related to the company's operations, the executives of the company shall be personally and jointly liable to the shareholders for the total loss in value, for failing their duty of adequate disclosure.

* Safe harbor:
- Companies and executives shall be exempt from this rule if they can show a concerted effort by an individual or group of individuals to artificially manipulate the stock price, and the SEC files charges as such.

Why would this be great? Because there should be no case where something is revealed which causes a large decline in the value of a public company which is not disclosed to everyone prior to the event. It would basically eliminate the CEO issuing bald-faced lies a week before the company goes under, and then resigning when stuff hits the fan. It would force disclosure before bad stuff became it became public knowledge, to avoid the risk of liability for concealing it. It would curtail insider trading by pushing forward disclosure timing. In short, it would be awesome.

File this under things that will never be done with the corporate interests owning Congress, but still a pretty dream.