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?

[u38cg]

Generally the value of this data is time-limited. I'm more concerned about how difficult it is going to be for the media to pick up important stories in a timely manner if they have to scour blogs and investor relations sites to glean newsworthy details. A third-party company can prioritise and feed important information to the market effectively.

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:"It's on the website!"

[timmarhy]

any attempt to hide information comes with huge fines, jail terms and delisting as possible outcomes. there is a reason companies are afraid to fuck with SEC, and there is a reason they will say things in disclosure statements they would NEVER say publicly. just look at SCO they actually listed their lawsuit failing as a possible outcome in one filing.

The CEO's blog

[MosesJones]

Monday

Today I met some people from Company X and it was all brilliant and great. Fabulous news that we are doing a big new partnership

Tuesday

I had pie for dinner

Wednesday

We've just lost $2bn as a result of an internal fraud, the FBI and CIA are now involved and all senior executives are being questioned

Thursday

I'm here in Brazil today speaking with their justice ministry, the weather is fantastic and I'm off to play golf later.

Now Jonathan Schwartz at Sun really blazed the trail here, but surely the really thing for a company to do is have such a god-awful boring blog full of mundane crap that any bad news is "published" in a place that no-one looks.

It's a business opportunity

[smittyoneeach]

Whoever aggregates all of these disclosures, and rates companies based on their accuracy and fidelity over time, is probably going to have a lot of customers.