SEC Lets Companies Disclose Via Websites, Blogs

edadams passes along a note in the ABA Journal that reads "Corporations may now sometimes fulfill their public disclosure requirements under Regulation FD by posting information on their websites and blogs, rather than having news releases distributed by third-party companies, according to new guidance issued by the US Securities and Exchange Commission. The move is expected to cut compliance costs." Here is the SEC's policy announcement.

Comments

How is archival of this data managed?

[sapphire wyvern]

When companies post announcements via third party media, those announcements are presumably archived. I wonder what the impacts would be of blog-disclosures being retracted or edited after the fact, Ministry of Truth-style?

Re:How is archival of this data managed?

[JCSoRocks]

I have a feeling those third parties also provide some level of validation / identification. There's a huge potential for abuse... fake blog entry on your competitors site stating that this quarter's expected profits ended up being a huge loss anyone?

That's assuming hacking, although you wouldn't even have to go that far. Just make your own look alike blog with your own press releases. People have been duped by Internet fakes countless times... The only difference is that now it'll send a company's stock tumbling or skyrocketing.

Blogs?

[MrZaius]

I can see the case for self-publication of press releases, although that seems to greatly expand the ability of a firm to pull back antiquated information. Hopefully some reasonable protections are taken care of in the forthcoming guidance. I'm also not sure that savings on the order of $100-1000/press release (from the results of a quick Google search - Correct me if I'm wrong) are so significant as to warrant moving away from common, easily indexed third parties.

That said, though, why on earth do they view something as informal and relatively uncontrolled as a blog (or worse - multiple blogs) as an appropriate outlet for this sort of information? This part seems grossly irresponsible.

Is there a draft copy of the changes out there somewhere?

Impermanence of websites

[DoofusOfDeath]

Would this make lawsuits regarding disclosure more difficult?

For example, suppose company Foo makes a tortuous misrepresentation of the quality of its R&D pipeline on a blog. Then I buy stock based on that. Then the company's lawyers realize the mistake and fix the blog. All within 10 minutes.

I sue, and say that the blog had bad information. They say, "We have no reliable record that the website ever showed that." I curse myself for not having had a Notary Public print out and stamp that web page.

I think this wouldn't happen with the current regime of printed disclosure statements. Could it happen with the proposed system?

Re:Impermanence of websites

[timmarhy]

no they still must keep an audit able record of their disclosures. this plus the fact once you put it on the net somewhere it's cached they would be screwed

small print ?

[Anonymous Coward]

I allready get the feeling that those (mandatory!) disclosures will be tucked away as some "small print" somewhere, stored in a locked, turned to the wall cabinet hidden behind a door that says "beware for the leopard" which is located in the basement to which the elevator does not work and the stairs are broken.

The reason that the data needed to be presented by a third party had/has a reason. Ignoring that reason is pretty-much criminal.

"It's on the website!"

[urcreepyneighbor]

Call me a cynic, but couldn't this be used to obfuscate - or, hell, intentionally hide - information? Instead of being forced to go thru well-known channels, some PR punk could brush off a request by claiming "it's on the website!"