You are right that the law can be confusing.
Technically, if something is "material", the company has an obligation to disclose it immediately and simultaneously. One new contract might not be material, but notice how Boeing reports every single aircraft contract they win. Death of an officer, resignation of an auditor, SEC/FBI investigations ... these would all be considered "material" in my book.
In the case of a company which has never had an analyst's coverage, a new first-time-ever report might be material.
All of the above addresses whether a company must make the information public.
Now from the perspective of the investor. An investor who knowingly comes into possession of significant information about a company which has not yet been made public and who then trades based on that information may soon feel the breath of the SEC upon the nape of his neck.
Therefore, the wise IR person will refrain from discussing things outside the gamut of info that is publicly-held. An IR person should not tell one investor about a new contract ... if he thinks the contract is significant ... until he has informed all investors. There is a useful test: if it sounds like really good good news, it probably needs to be put out widely and publicly.
The IR person for a penny stock company, such as TSIS, finds himself in a challenging position. Part of his task is to help investors find and interpret publicly-available info -- helping them to do their Due Diligence (although I consider DD which includes only talking with the company to be not much DD at all). In that process, he becomes a gatekeeper, whether he likes it or not.
Why do we get E-mail from stock touts? Because they are there <grin>. At some point, secret information is no longer a secret after it has been spread all over everywhere. But, IMHO, there is some danger in spreading informaton which is not yet public.
"So you call the company and get an update
on stuff that has not yet been released in a pr. It happens all the time on this TSIS
board."
This is *exactly* what can get a company into trouble, and with it an investor who takes action upon it. For that reason, many IR people at small publicly-held companies will put out a BusinessWire or PRNewsWire blurb on good news even if they reckon that no one in the media will pick it up. That way they are on record as having made it available on a fair and even basis.
I dunno if this helps much?
JSb. |
