Citigroup took extra legal risk on its whole earnings release, except the CEO’s words

In plain words

Citigroup put its whole third-quarter earnings release under an extra legal rule, except the three paragraphs quoting Citigroup’s CEO.

US companies send their earnings release to the SEC, the US markets regulator, with a label on it. By default the release is “furnished”. A company can choose “filed” instead. A filed release falls under Section 18 of the Exchange Act. That section gives investors one more way to sue over a false statement in the release.

We checked the releases of 14 large companies from 8 to 14 October. Six chose “filed”, and all six are banks, JPMorgan Chase and Goldman Sachs among them. The rest, including PepsiCo and UnitedHealth, stayed with the default.

For a trader, the label tells you which parts of a release sit under that extra rule. In this round only banks used it, and everyone else kept the default. Citigroup was the one company to keep part of its release outside the rule, and that part is Jane Fraser’s commentary, outlook for the year included.

1. Citigroup’s two sentences

Citigroup sent the Securities and Exchange Commission (SEC) a Form 8-K on 13 October. Two sentences in that report set out the split.

“The quotation under the heading ‘CEO Commentary’ on page 1 of Exhibit 99.1 shall not be deemed ‘filed’ for purposes of Section 18 of the Securities Exchange Act of 1934.”

Exhibit 99.1 is the release. The 8-K’s next sentence says everything else in the release “shall be deemed ‘filed’”.

“Filed” here is a legal label, and the quote is still in Citigroup’s copy at the SEC. The label decides whether Section 18 of the Securities Exchange Act of 1934, the Exchange Act for short, covers what the release says. Section 18 is one of several routes investors have to sue over a company’s statements.

2. Filed or furnished: how the label gets set

A US company that puts out its results for a finished quarter or year has to report that release to the SEC on Form 8-K. Form 8-K is the short report for news that cannot wait for the quarterly report. Each kind of news has a numbered item on the form, and results are Item 2.02, “Results of Operations and Financial Condition”. The press release goes in as an attachment, called an exhibit.

The form’s own instructions set the label. General Instruction B.2 makes the release “furnished” by default. It becomes filed only if the company, called the registrant in the form, says so or copies the release into another filing by reference.

“… unless the registrant specifically states that the information is to be considered ‘filed’ …”

The same instruction lets a company name “portions of exhibits” as filed. Citigroup named all of its release except the quote.

Section 18 covers a false or misleading statement about a material fact in a filed document. An investor who relied on that statement, did not know it was false, and traded at a price the statement moved can sue for damages. The person sued escapes by proving good faith and no knowledge that the statement was false or misleading. Instruction B.2 takes a furnished release out of Section 18 and its liabilities. The instruction speaks to that section alone.

3. Fourteen earnings 8-Ks, one line each

We read fourteen earnings 8-Ks dated 8 to 14 October 2026 on the SEC’s EDGAR system, all from large companies. The fourteen are a sample, and other companies reported in those days too. The last column is what each 8-K says about the release.

Company	8-K dated	Release	What the 8-K says
JPMorgan Chase	13 Oct	Filed	Each exhibit “shall be deemed to be ‘filed’”
Wells Fargo	13 Oct	Filed	Release and financial supplement “considered to be ‘filed’”
Citigroup	13 Oct	Filed, less the CEO’s quote	The quote “shall not be deemed ‘filed’”
Goldman Sachs	13 Oct	Filed	Exhibit 99.1 “shall be deemed ‘filed’”
Bank of America	14 Oct	Filed	Item 2.02 and Exhibit 99.1 “deemed to be ‘filed’”
Morgan Stanley	14 Oct	Filed	Release and financial supplement “deemed to be ‘filed’”
PepsiCo	8 Oct	Furnished	“is being furnished and shall not be deemed ‘filed’”
Delta Air Lines	9 Oct	Furnished	“The press release is furnished”
UnitedHealth	13 Oct	Furnished	“shall not be deemed ‘filed’”
Johnson & Johnson	13 Oct	Furnished	No sentence on the label, so the default holds
BlackRock	14 Oct	Furnished	No sentence on the release’s label, so the default holds
State Street	14 Oct	Furnished	Release and financial addendum “furnished herewith”
Progressive	14 Oct	Furnished	No sentence on the label, so the default holds
Fastenal	14 Oct	Furnished	No sentence on the label, so the default holds

The six releases filed under Section 18 all come from banks. State Street, also a bank, furnished its release. None of the six 8-Ks gives a reason for filing. Thirteen of the fourteen number the release Exhibit 99.1, and Progressive calls it Exhibit 99.

Bank of America, Goldman Sachs and Wells Fargo also put their earnings-call slides in the same 8-K. The slides go under Item 7.01, the item for material a company puts out by choice, and each bank labels them furnished.

The 8-Ks of UnitedHealth, PepsiCo and Delta also say the release is not to be incorporated by reference, meaning copied in by mention, into the company’s other SEC filings. Those include a registration statement, the document a company uses to sell new securities.

4. The quote outside Section 18

Ms. Fraser’s commentary opens the release. The commentary says the quarter “included the best third-quarter revenue in a decade”. The last of the commentary’s three paragraphs looks ahead.

“We expect to exceed this year’s return target …”

The carve-out covers these lines and the rest of her three paragraphs. They are still in the release Citigroup sent to the SEC. Only Section 18 stops short of them.

5. A rule that binds both labels

Instruction 2 to Item 2.02 applies part of the SEC’s non-GAAP rule to earnings releases, whatever their label. The part is paragraph (e)(1)(i) of Item 10 of Regulation S-K, and it binds any release that uses a non-GAAP number. GAAP is the standard US accounting rulebook. A non-GAAP number is one the company computes its own way, such as earnings before certain charges.

When the release shows one, it has to show the closest GAAP figure “with equal or greater prominence”. It has to reconcile the two, in numbers for past results. It also has to say why management thinks the adjusted figure is useful. A second SEC rule, Regulation G, bars a non-GAAP measure that misleads when read with the text around it.

6. How to find the line yourself

1. Open the company’s list of documents on EDGAR and filter for 8-K.
2. Pick the one dated on the earnings day that lists Items 2.02 and 9.01. Item 9.01 lists the financial statements and exhibits.
3. Open the main document, the few pages before the exhibits. Search it for “filed”, with the quotation marks the 8-Ks print around it.
4. Read the sentence about the release itself, usually Exhibit 99.1. A release that “shall be deemed” or is “considered” filed, with no “not” before it, sits under Section 18. That covers the whole release or the parts the sentence names.
5. With no such sentence, the release keeps the default label, furnished, unless another filing copies it in by reference.

Two earlier posts also work from the source document: the Bureau of Labor Statistics note on the missing October CPI rate and the Brady Report on the 1987 crash.