Regulation FD of the SEC was intended to reduce small investor concerns about analysts’ information advantage and increase their confidence in a fair marketplace. However, during the period leading up to Regulation FD, critics complained that this regulation would result in firms releasing less public information between earnings announcements, leading to increased abnormal share return volatility at earnings announcement dates.

Required
a. Explain the reasoning that led to this concern. Was it confirmed by empirical evidence?
b. To what extent does regulation FD appear to have attained its goals? Base your answer on empirical evidence.