SEC May Consider Loosening Online Disclosure Restrictions

Public companies constantly live under the SEC microscope. Regulation FD and other SEC guidelines strictly prohibit the selective disclosure of “material” information that would influence a company’s performance or investor decisions. (In other words, all audiences must have equal access to all company information.)

Most public companies have been understandably hesitant to implement blogs, podcasts and other new media. If a CEO or CFO discloses material information in a blog or podcast (intentionally or unintentionally), it would violate fair disclosure regulations. As a result, most companies have avoided new media in favor of press releases, the old standby that’s deemed safe by the SEC.

The trend could be shifting, however. Amy Gahran reported on recent dialogue between Sun Microsystems CEO Jonathan Schwartz and SEC Chairman Christopher Cox. In a letter that was also posted to his blog, Schwartz urged Cox to consider greater acceptance of the online world for fair disclosure.

Surprisingly, Cox commented on the post. He implies the SEC would consider loosening its limitations for online disclosure if certain questions can be adequately addressed. As Gahran notes, it’s an important development that could diminish the role of press releases and open a new online frontier for public companies. Investor relations and public relations professionals definitely need to follow this topic in the coming months.