SEC's Regulation FD Enforcement Actions Bring Compliance Lessons to Light


You and your company might have forgotten about Regulation Fair disclosure (Regulation FD) but the Securities and Exchange Commission (SEC) has not. Following a four-year break in Regulation FD enforcement actions, the SEC has revamped its efforts in the area and is cracking down on selective disclosures. This could mean stiff penalties for companies and executives who have forgotten the old compliance lessons or failed to learn the new ones. The lessons demonstrated by the SEC’s recent enforcement actions might surprise you.

When the SEC adopted Regulation FD in 2000 to prohibit selective disclosures of material corporate information, it quickly came under fire. Critics said the rule would have a chilling effect on issuers’ communications and, thus, would negatively impact market efficiency. In an effort to assuage some of these fears, the SEC stated that its enforcement actions would “not be based on second-guessing reasonable judgments made in good faith by issuers,” but instead would “be focused on clear violations.”

Excerpted from Bloomberg Law Reports - Securities, Vol. 5, No. 6, February 7, 2011 © Bloomberg Finance L.P. 2011. Originally published by Bloomberg Finance LP. Reprinted by permission. The full article appears in the PDF below.

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