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Using Your Online Newsroom for IR Compliance and Disclosure

by Deirdre Breakenridge and Steve Momorella

It is a little known fact that public companies can use their online newsroom as the central headquarters for all of their SEC compliance and disclosure information. Google, Microsoft, Netflix, Tellabs, Sun Microsystems, Marathon Oil, and Steinway Music, are all finding great success and massive cost reductions by utilizing a growing trend called “web disclosure.”   As a result, traditional wire services no longer have a lock on a company’s earnings content.
As a public company, you are required by Federal law to make your news and financial information “widely accessible”, in a “timely fashion”, and “simultaneously disseminated.” This is known as the Securities Exchange Commission’s (SEC) Regulation FD. Ironically, the SEC began studying this issue in 2006, but it wasn’t until July 30, 2008 when they released an updated guidance on Regulation FD requirements.   The updated requirements stated that under certain circumstances, a company’s website and blog could satisfy Regulation FD.  Of course, the SEC outlined boundaries for sharing financial news, as well as holding companies and their employees liable for the information that they posted on blogs and discussion forums.

What is disclosure and compliance? The Securities Exchange Act of 1934 was created to ensure that public companies disclosed corporate information in a timely and widely disseminated fashion. The idea is that news and financial information for companies that could possibly affect the stock price needs to be distributed to as many people as possible at the same time. Widely disseminated and in a timely fashion. This ensures a level playing field for investors who rely on the news to make informed decisions about stock buys. Traditionally this has been handled by the newswires such as PR Newswire and Business Wire and IR software companies such as Thomson Reuters.

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