Haynes and Boone's Newsroom
Risky Business: Company-Analyst Communications In Today's Market
The role of analysts in assessing and valuing publicly held companies has always posed inherently difficult problems for management. Analysts' contacts with company spokespersons raise the specter of "selective disclosure" and "entanglement." The frequency of allegations regarding communications with analysts in shareholder class actions under the federal securities laws warrants continued corporate attention to these issues. Recently, the Securities and Exchange Commission has heightened its scrutiny of analysts' relationships with publicly-traded companies through a new proposed regulation targeting selective disclosure to analysts. This article discusses the legal framework which can make interaction with analysts problematic and concludes with a checklist of suggested steps intended to minimize the risks associated with analyst communications.
For the complete publication please download the PDF below.