Small Business Securities Bulletin: Regulation FD – Recent Case Serves as a Reminder to Ensure your Regulation FD Compliance Programs are Current


As is not uncommon, December has been a slow month in the securities law compliance world. While the SEC has continued to propose new rules, particularly in response to mandates under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, these proposals will not be relevant to most small SEC reporting and private companies. Therefore, I wanted to use this month’s bulletin to discuss a recent SEC Regulation FD case and remind companies to ensure that their corporate communications/Regulation FD policies are current and being consistently followed in practice, including employee training on the company’s communication policies and procedures as needed.

Regulation FD, for “Fair Disclosure,” prohibits selective disclosure of material nonpublic information to certain parties, including brokers, dealers, investment advisers, investment companies and stockholders. In October 2010, the SEC brought its second Regulation FD case this year (and its third within 14 months); we discussed the previous case in our first June 2010 Bulletin. This most recent case emphasizes that Regulation FD applies to all communication including implied communication, not just explicit written and verbal statements.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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