A More Social SEC?

Why shouldn’t a publicly traded company be allowed to use its blog to break material news? That was the question Sun Microsystems CEO (and blogger) Jonathan Schwartz posed to the SEC nearly two years ago, a subject on which this blogger posted at the time.

Last Wednesday, the SEC finally issued its initial ruling that offered:

“…new guidance to public companies about how to comply with the securities laws while developing their Web sites to serve as an effective means for disseminating important information to investors.”

In other words, Jonathan Schwartz may soon be allowed to use his online pulpit to disseminate material news (though he may want to wait given the doings at his company of late). According to SEC chairman Christopher Cox (pictured):

“The guidance issued today clarifies the rules of the road so investors can gain — quickly and in a cost-effective manner — the benefits of Internet disclosure of the latest information on the companies they own or are considering buying.”

Here’s a video clip from Cox on the ruling. Separately, the ubiquitous Brian Solis offered his insightful take in a post for Tech Crunch:

“Executives and marketing professionals must now weigh whether the company Web site or blog are indeed a recognized channel of distribution and more importantly, whether these online properties meet public disclosure requirements under the new rules Regulation FD.”

He also used his star turn to forcefully advocate for the social media news release as the likely beneficiary of the SEC’s actions:

“Not only do SMRs socialize content and link conversations across the Social Web, they also help bloggers and online journalists more effectively write a rich media post using one resource that provides them with everything they need.”

As Brian dutifully noted, it will take time for the industry’ rank and file to migrate away from the one-dimensional, top-down world of the news release. Yet, he was right to observe that with Wednesday’s ruling, Mr. Cox and company have finally cracked open the door for what may eventually be a richer and more authentic exchange between companies and their key constituents.

Finally, the ruling is not without its reasonable detractors, including Business Wire, which awaits the SEC’s interpretive guidance on whether posting to a public company’s blog or website complies with the spirit of full non-selective disclosure. Curiously, it issued a release and posted on its blog:

“…we continue to maintain that simply posting material news on a corporate web site or using blogs does not meet the spirit and intent of Regulation FD because it is neither simultaneous, nor full and fair. It is Business Wire’s belief that this is not what the SEC intended.”

We haven’t heard the end of this.

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