As usual need more time, but have truly enjoyed the last few minutes, 'hearing' all of you....what a GREAT education Techride is (as well as fun)....Thanks to you all!!! In fact, just as I was thinkin' that, I came to the post from Jed a few posts back, and seems he thought the same thing.... Did want to give you this whole note on the SEC....
Best, KLP
SEC Proposes Clampdown on News Leaks
Dec 15 1:00pm ET
WASHINGTON (Reuters) - The Securities and Exchange Commission proposed
new
rules on Wednesday designed to level the playing field for all investors
and clamp
down on companies disclosing market sensitive financial data to a few
analysts.
The proposal would require corporations to disclose material data that
may influence
investment decisions to all investors and analysts at the same time and
release
relevant information as soon as the company realizes an inadvertent
selective
disclosure has occurred.
``The all-too-common practice of selectively disseminating material
information is a
disservice to investors and undermines the fundamental principles of
fairness,' said
SEC Chairman Arthur Levitt, who has led the charge on this issue for
more than a
year.
The proposal comes a day after Abercrombie & Fitch Co. (ANF.N) revealed
the SEC
has launched a formal investigation into the clothing retailer, which
recently came
under fire for allegedly giving information to Wall Street insiders
before the public.
``There is a great deal of anecdotal evidence, newspaper reports and
some empirical
evidence that selective disclosure is occurring and happening more
frequently,' SEC
General Counsel Harvey Goldschmid told reporters.
The SEC also on Wednesday approved rules expanding the requirements of
audit
independent committees and proposed amendments to clarify insider
trading
regulations. CONFERENCE CALLS
While Levitt and his fellow commission members urged that companies open
up to the
public and the media conference calls with analysts, the rules proposed
Wednesday
stop short of requiring that in all cases.
The proposed rules would force companies to either issue a news release,
allow the
media to participate, or file with the SEC if they know in advance all
material data that
wilable to all either through a news release or a filing with the SEC.
``Once you know it's out there, you've got to, as promptly as possible
or practical, put
out the information to the public,' Goldschmid said.
And the SEC is seizing on advances in technology to push companies to
allow
broader access to material information, including using the Internet.
The proposed rules, ``will provide issuers with a great deal of
flexibility in the way in
which they distribute information, including the use of new technologies
over the
Internet to offer extraordinary broad access at minimal cost,' Levitt
said. LEVELING
THE PLAYING FIELD
``It's all consistent with the notion of creating a level playing field
for investors and it's
kind of hard to argue against saying that if you've told analysts
material, you've got tell
everybody else the same thing,' said Frank Goldstein, a corporate
securities lawyer at
the firm Wood & Brown LLP in Washington.
``That's like arguing against apple pie.'
The proposed rules ran into some skepticism from SEC Commissioners Isaac
Hunt
and Laura Unger who expressed concern about companies possibly cutting
off the flow
of information to analysts.
``I think we've built this ... in terms of the way its phrased ... that
allow for confidential
disclosure. I believe this will not and should not diminish the flow of
information,'
Goldschmid said.
Still, the proposed rules could run into some opposition from companies
that fear they
will stymie frank discussions between analysts and company executives.
If the rules are adopted, corporations that do not comply with releasing
the data in a
reasonable time period -- likely within a day -- the SEC enforcement
division would be
called in to investigate, he said.
In the case of Abercrombie & Fitch, investors learned through published
reports in
October that a company official allegedly told a Lazard Freres analyst
that third quarter
sales at the retailer's stores would be disappointing.
That allegedly occurred a week before the news was revealed to the
public. During that
gap, the company's stock dropped about 25 percent.
While the proposed rules would not affect initial public offerings, the
SEC division of
corporation finance is examining the issue of disclosure leading up to
IPOs.
The public will have 90 days to comment on the proposed rules after
which the SEC
could rewrite the rules or propose the full commission the rules as is
for final adoption. |
