# Public Company Risks

Predict which 10-K risk factors actually precede enforcement, restatements, and drawdowns.

## What we did

- Scraped SEC EDGAR for 10-K, 10-Q, and 8-K filings with precise timestamps.
- Generated forward-looking risk questions anchored at each filing date.
- Labeled with actual downstream outcomes — enforcement actions, restatements, drawdowns.
- Fine-tuned Qwen3-32B and benchmarked on 6,109 held-out SEC risk queries.

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## Example datapoint

A sample training example — question, source, and outcome-derived label.

DATASET **SEC risk signals**

RL

**Question**  
Will Northwind Logistics Inc. (NASDAQ: NWIN) face a Commission enforcement action within 12 months of the Feb 28, 2025 10-K disclosure of an informal revenue-recognition inquiry?  
**Question source**  
10-K risk factors Feb 28, 2025  
Disclosure of ongoing informal inquiry related to revenue recognition policies  
**Label**  
Yes.  
**Type**  
binary  
**Confidence**  
0.93  
**Label source**  
SEC litigation release Nov 4, 2025  
Commission orders cease-and-desist and civil penalty in accounting fraud matter

DATASET **SEC risk signals**

RL  
**Question**  
Does Horizon Devices’ Mar 21, 2025 10-K (filed 4:32pm ET) contain Item 9A language on material ICFR weakness that predicts a restatement of FY2024 revenue within the next four quarters?  
**Question source**  
10-K MD&A Mar 21, 2025  
Management cites material weakness in ICFR; auditor expanded scope  
**Label**  
No.  
**Type**  
binary  
**Confidence**  
0.81  
**Label source**  
8-K Aug 1, 2025  
Annual report filed without revision to prior periods

DATASET **SEC risk signals**

RL  
**Question**  
What is the probability that S&P Global Ratings lowers Meridian Rail Corp.’s senior unsecured rating from BBB to BBB- or below before Jun 30, 2025, given May 2 CDS at 285 bp and net leverage 4.4× per the 8-K?  
**Question source**  
8-K May 2, 2025  
Company completes $900m covenant-lite add-on; leverage pro forma 4.4×  
**Label**  
0.41  
**Type**  
continuous  
**Confidence**  
0.84  
**Label source**  
S&P Global Jun 28, 2025  
Affirm BBB/A-2 outlook revised to negative; no notch change in quarter

DATASET **SEC risk signals**

RL  
**Question**  
Among Item 1A risk themes in S&P 500 industrial 10-Ks filed Q1 2025, which factor—(A) litigation, (B) cyber, (C) supply chain—best predicts a subsequent >5% peak-to-trough equity drawdown within 90 trading days?  
**Question source**  
SEC EDGAR Mar 31, 2025  
Batch scrape: 58 industrial filers with standardized 1A headings  
**Label**  
Supply chain.  
**Type**  
binary  
**Confidence**  
0.72  
**Label source**  
Internal factor study Jul 15, 2025  
Marginal lift for supply-chain-heavy 1A vs. peers on drawdown AUC

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## Results

Benchmark comparisons against frontier models.

### SEC Risk Prediction: Brier Score, Skill, and Calibration

Fine-tuned Qwen3-32B achieves Brier Skill Score +11.6% with ECE of 0.029 across 6,109 SEC risk queries — 64.7% lower calibration error than GPT-5 (ECE 0.081). The model learns to distinguish boilerplate legal language from meaningful signals preceding adverse outcomes.