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This SEC law is 'completely wrong': CEO

The U.S. Securities and Exchange Commission passed its fair disclosure regulation in efforts to curve selective disclosure and insider trading, but its concept is "completely wrong," John Levin, CEO of Levin Capital Strategies told CNBC on Thursday.

"The public cannot make investment decisions — in my opinion — in competition with professional analyst," Levin told "Closing Bell."

The expert highlights that fair disclosure rules influence enterprises to fall into quiet periods. Levin considers that during stock turbulence, helpful information outside of quantitative data should be shared. He added that in cataclysmic scenarios, the absence of information fuels market volatility.


"There are a lot of questions that somebody wants to know that effect a year or two off, and have nothing to do with earnings," he noted. "None of the companies will talk to you about the range of things that are one, two, three years off."

According to the SEC, when a company's representative divulges nonpublic information to outsiders, particularly those who would use the information for trading, the business "must make public disclosure of that information."

Levin acknowledges, however, that the issue of the law is not directly the regulation, but the practice of it.

"It's not in the regs, it's in the interpretation," he said. "I think there's got to be some industry group that rebalances it."