*OT* From today's WSJ... Maybe the 'fair disclosure' proposal will actually come to pass... Would have come in handy during the Earl Mason show when he made that 'offhand' comment about slowing sales...
Regards,
John
Regulators Get an Earful
On Proposed Disclosure Rule
By CARRIE LEE
THE WALL STREET JOURNAL INTERACTIVE EDITION
When regulators invited the public to comment about a proposal to bar companies from disclosing key financial information only to analysts and big investors, they got an earful.
After months of discussion, the public-comment period officially ended on April 28 for Regulation FD, a "fair-disclosure" rule proposed by the Securities and Exchange Commission that would effectively bar companies from disclosing information to key analysts and institutional investors ahead of the general public.
The proposal states that companies would have to disclose all material information in a public forum. One provision would allow companies to comply by opening their conference calls to the public through the Internet or via telephone.
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The SEC's comment period was extended for one month -- and generated more than 2,000 responses, according to the SEC. Responses that were received electronically can be found on the SEC's Web site (www.sec.gov/rules/s73199.htm ).
"We've gotten more comments than we usually get, this is an amazing [amount], that was one reason why the comment period was extended," she says.
The SEC is required by law to solicit public commentary on proposed rules. Afterwards, staff members review the comments and decide whether any changes or revisions in the proposal should be made. The SEC then votes on the proposal.
Both individual investors and professionals submitted online commentary. While many applaud the rule in theory, some raised issues about its implications.
Critics say opening up the conferences to individual investors may have a diluting effect on what companies tell investors in general. Others have taken issue with the way the information is expected to be disseminated.
SEC Polishes Plan to Require Firms to Tell Public What Is Said to Analysts (Nov. 16)
On March 29, Georgia Marudas, deputy business editor of the Baltimore Sun, wrote: "I think that proposal opens a big loophole for companies to make announcements that no one will know about. I can envision them saying, 'We had a Web conference open to anyone to say our earnings would be 20% below projections, or whatever.' "
Others were concerned with the proposal's vague language. Comments from W. Hardy Callcott, senior vice president and general counsel for discount broker Charles Schwab, on April 20 posted the following: "We suggest a clarification described in more detail ... that would protect innocent but mistaken judgments about what information is material. With this clarification, Schwab can support the Commission's proposal ... "
Individual investors have weighed in on the subject on traditional message boards, too. "This rule sounds right to me. Discreetly disclosing information to analysts seem awfully close to revealing inside information to me," wrote one investor on a Yahoo! Finance message board (quote.yahoo.com).
Companies have held closed-door conference calls with the professional investment community for years. The calls frequently are held around the time corporations release their quarterly earnings, and the information disclosed there often gives listeners first-hand information that is critical to assessing a company's prospects.
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