REGULATION FD -

Beginning in 1999 and continuing into 2000, media reports about selective disclosure of material nonpublic information by issuers raised concerns that select market professionals who were privy to this information profited at the expense of others. A consensus began to emerge that selective disclosure (1) adversely affects market integrity (to a similar extent as insider trading does) and (2) allows issuers to use nonpublic information unfairly to gain favor with analysts or investors.

In response to the perceived threat presented by selective disclosure of material nonpublic information, by issuers, the Securities and Exchange Commission (SEC) adopted Regulation Fair Disclosure (“Regulation FD”) in 2000. Regulation FD requires an issuer that discloses material nonpublic information to certain individuals (generally holders of the issuer’s securities and securities market professionals) to also make the information publicly available. The required timing of the public disclosure depends on whether the issuer selectively disclosed the information intentionally or not. For an intentional selective disclosure, the issuer must simultaneously present the material to the public. If the issuer made the selective disclosure unintentionally, it must promptly disclose the information to the public.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Topics:  Accredited Investors, Broker-Dealer, Crowdfunding, Disclosure Requirements, Filing Requirements, FINRA, GAAP, Investment Adviser, Issuers, JOBS Act, Material Nonpublic Information, Private Offerings, Proxy Solicitations, Public Offerings, Recordkeeping Requirements, Regulation FD, SEC, Social Media, Third-Party Liability

Published In: General Business Updates, Communications & Media Updates, Finance & Banking Updates, Securities Updates

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.

© Morrison & Foerster LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »