August 10, 2000: 12:16 p.m. ET
NEW YORK (CNNfn) - Individual investors won the right to access corporate financial information at the same time as Wall Street analysts under a new rule adopted by the U.S. Securities and Exchange Commission Thursday.
The rule, Regulation FD, requires companies to disclose profit warnings, earnings reports and any other information it issues to analysts simultaneously
to the public via press releases or other notifications, the SEC said..
"High quality and timely information is the lifeblood of strong, vibrant markets. It is at the very core of investor confidence," SEC Chairman Arthur Levitt said.
"But when that information travels only to a privileged few, when that information is used to profit at the expense of the investing public, when that information
comes by way of favored access rather than by acumen, insight or diligence, we must ask, 'whose interest is really being served?'"
Although the SEC acknowledged the important role analysts play in interpreting financial data, the commission said every investor should have access to the
same information at the same time in order to maintain confidence in the markets.
Releasing information only to analysts, Levitt said, has created an atmosphere in which corporate management treats that information as a commodity - "a way to gain and maintain favor with particular analysts."
"That also has put pressure on analysts to report favorably on a company in order to maintain access to inside information," Levitt added.
Many companies already offer such information through live conference calls and Internet Webcasts on earnings and other subjects.
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