Ice and all who value free speech...
Here are excerpts from a WSJ article. It addresses 'internet chatter' - I dislike that term - and proposes it should be curbed (by companies
forbidding their employees to participate).
Apparently misleading or false statements by investment professionals
are OK, though.
>
August 30, 1997
Hints for Keeping Afloat in Sea
Of On-Line Investment Chatter
By ROBERT E. CALEM
Special to THE WALL STREET JOURNAL INTERACTIVE EDITION
It has been more than two years since Internet chatter
sent the shares of Iomega Corp. on a rollercoaster ride,
demonstrating the power of on-line discussions to
influence stock prices.
And Wall Street
denizens and securities
regulators are still
grappling with outbreaks
of buying and selling
frenzies stoked by Internet newsgroups and Web sites.
<SNIP>
And earlier this year, on-line discussions helped to
deflate the securities of Vivus, a Menlo Park, Calif.
maker of erectile dysfunction (impotence) therapies.
But now, with the advantage of hindsight, securities
experts, Web watchers and executives who have lived
through the ordeal, say that the long-term impact of
these short-term whirlwinds could be positive --
regardless of whether the stock price rockets or
plummets -- if the companies learn from the experience
and react with tangible operational changes.
"You can't just close your
eyes and say I didn't know
this kind of thing was
possible. Maybe you could
get away with that a couple
of years ago, but you can't
now," says John Stark, who
heads the Securities and
Exchange Commission
Division of Enforcement's
Internet Enforcement
Program.
Emphasizing that these are
his opinions and not
necessarily the views of the
SEC, Mr. Stark, who also
teaches securities law as an
adjunct professor at
Georgetown University Law Center in Washington,
advises companies embroiled in Internet hype to try to
quash the flow of false or fraudulent information, which
can be harmful to investors as well as companies.
But long-term, he says, companies should have policies
in place to limit the on-line contributions of employees,
underwriters, or anyone else affiliated with the company.
Boris Feldman, a securities lawyer at Wilson, Sonsini,
Goodrich, Rosati in Palo Alto, Calif., offers similar
advice. He suggests three rules:
First, companies should discourage employees from
participating in chat rooms, where they can try to
combat or bolster opinions by sharing information that
shouldn't be public. Sooner or later, Mr. Feldman
contends, there will be a shareholder lawsuit that cites
such an employee's posting.
Second, companies shouldn't undertake to police the
actual chat rooms or Internet forums. If company
officials are there, he says, participants can try to
manipulate them to discuss things they wouldn't normally
talk about.
And third, Mr. Feldman counsels, investor-relations
professionals shouldn't give any information to individual
investors who telephone the company directly, because
many of them are hooked to the Internet and can post
the information they are given to on-line chat rooms or
forums within minutes. "There ain't nothing in it for the
company," Mr. Feldman says. To the contrary, he notes,
the incident could be labeled "selective disclosure" and
violate SEC regulations requiring full disclosure.
<SNIP> |
