Mr. Pink's Picks: selected event-driven value investments Message Board

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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments

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To: StockDung who wrote (14386)	10/22/2000 8:42:51 AM
From: Mama Bear	Read Replies (1) of 18998

The problem with the '24 hour' clause is that's not the way the rule reads on the SEC web site. "The timing of the required public disclosure depends on whether the selective disclosure was intentional or non-intentional; for an intentional selective disclosure, the issuer must make public disclosure simultaneously; for a non-intentional disclosure, the issuer must make public disclosure promptly." sec.gov The 24 hour period is used to define 'promptly' in the case of 'unintentional' disclosure. It also doesn't start from the time when the information is disclosed, but rather from when a 'senior official' learns of the 'unintentional' disclosure. Under Rule 100(a)(2), when an issuer makes a covered non-intentional disclosure of material nonpublic information, it is required to make public disclosure promptly. As proposed, Rule 101(d) defined "promptly" to mean "as soon as reasonably practicable" (but no later than 24 hours) after a senior official of the issuer learns of the disclosure and knows (or is reckless in not knowing) that the information disclosed was both material and non-public. "Senior official" was defined in the proposal as any executive officer of the issuer, any director of the issuer, any investor relations officer or public relations officer, or any employee possessing equivalent functions. Same link as above. While I am sure that there will be a few companies that attempt to curry favor by 'unintentionally' disclosing material non-public information it is likely that these same companies will not have any 'senior officials' discover the 'unintentional' disclosure promptly. Like the insider at a pump and dump fraud that doesn't file the required 144 forms when selling shares into a PR induced buying frenzy, the ones that will break the rules are not going to break part of a rule and then suddenly find religion when confronted with another rule. I believe the vast majority of companies will comply with this rule in the spirit intended. Of course there will be a few bad apples who will attempt to circumvent the rule, but the 'unintentional' clause seems reasonble to me. A company like GE with hundreds, thousands or even more people who have access to material information could have such information released in a truly innocent fashion as far as the company is concerned. The simple fact is that there are many companies that have sought to curry favor with Wall Street analysts by giving them information on a regular basis ahead of public disclosure. This practice can't occur anymore under the new rule. There is no 24 hour grace period to allow it to happen. Regards, Barb

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