Using the Internet for SEC Required Disclosure under Regulation FD

Last week’s blog was about using social media websites to release corporate information.  We noted the SEC’s reference to the 2008 release on using the internet to release FD information.

It is important to understand the SEC’s position on using social media to release information in the context of the 2008 release, in which the SEC noted the following factors a company should consider in determining whether posting of the information on its website would satisfy Regulation FD:

1.  Do you adequately market your website as a source of important information about your company?

  • What steps have you taken to inform investors and the securities marketplaces about your website and  that it is a key source of important information about your company?
  • For example, do your periodic reports and press releases include your company website address and  state that you routinely post important information there?
  • Have you made investors and the securities marketplaces aware that you post on your company website important information about your company and the location of that information?

2.  How do you regularly disclose material information about your company?

  • What is the nature and complexity of the information being disclosed?
  • Do you have a pattern or practice of posting similar important information about your company on your website?
  • Do you keep your company website current and accurate?
  • How do you disseminate information about your company, other than by posting information on your Company website? What is the predominant method?
  • What is the size and market following of your company?
  • To what extent is information posted on your company website regularly picked up by the securities marketplace and regularly picked up and reported by readily-available news media?
  • How have you advised the newswires or media about the information posted on your company website?

3.  Do you make investor information on your company website easy to find and use?

  • Is your company’s web site designed to lead investors and the marketplace efficiently to information about the company, including information specifically addressed to investors?
  • Is the information prominently disclosed on your company website in the location you routinely use to post important information about the company?
  • Is the information presented in a format that is readily accessible to the general public?

If you read these questions over carefully, you’ll see the SEC’s concern that web posting enough may not be sufficient to comply with Regulation FD, much like their concerns expressed about social media.

The safest course to follow is to do what the SEC traditionally recommends for FD compliance:  File the disclosure on Form 8-K.  There’s nothing wrong with using the internet or other social media to simultaneously release information, but companies must carefully consider whether website or social media posting alone is sufficient in light of the SEC’s statements.

We want to remind you all again:  We also caution all of our clients to be careful about how they present the information.  Our advice is always:  Consider what the SEC would say if you put the information in your press release [or social media posting] in an S-1 registration statement reviewed by the staff.  If the staff wouldn’t like what you say or how you say it in an S-1, you shouldn’t be saying it in a press release either.  We urge all of our clients to have all press releases and postings reviewed by us for input on this matter.  Feel free to Contact Us for more information.