July 31, 2008
Yesterday, the Securities and Exchange Commission (the "SEC") approved the issuance of an interpretive release regarding the application of the federal securities laws to information posted on public company websites. The release will update interpretive guidance provided by the SEC in 2000 in light of advances in technology and increasing demand from investors for interactive, up-to-date sources of information. The SEC’s guidance is intended to encourage increased use of websites to disseminate information to investors, as well as more innovative and creative means of electronic dissemination such as interactive shareholder forums and blogs.
The SEC guidance will address four primary topics:
Regulation FD: The release will include guidance on whether information posted to a company’s website will be considered "public" for purposes of Regulation FD. This guidance is two-fold:
The release will provide a non-exclusive list of factors to consider in determining whether these conditions have been satisfied.
Liability Issues: The release will provide guidance on certain liability issues arising under the antifraud rules in connection with electronic disclosure of information. In particular, it will address the following four areas of concern:
Disclosure Controls and Procedures: The release will clarify that disclosure controls and procedures required by SEC rules generally do not apply to website disclosures. Nevertheless, the SEC staff noted that companies would be wise to adopt appropriate procedures, given the possibility that company postings on its website could give rise to liability under the antifraud rules.
Formatting: In recognition of the evolving and increasingly interactive format of information provided on company websites, the release will make clear that website materials need not be formatted in a printer-friendly manner unless SEC rules explicitly require it.
Please note that we will provide more detailed guidance on these issues once the release is made available on the SEC’s website, which is expected to occur within the next two weeks. The guidance provided in the release will become effective upon its publication in the Federal Register.
The SEC’s press release announcing the approval of the interpretive guidance is available at:
An archived webcast of the SEC’s open meeting approving the release is available at:
Gibson, Dunn & Crutcher’s Securities Regulation and Corporate Governance Practice Group is available to assist in addressing any questions you may have regarding these issues. Please contact the Gibson Dunn attorney with whom you work, or any of the following:
John F. Olson (202-955-8522, firstname.lastname@example.org)
Ronald O. Mueller (202-955-8671, email@example.com)
Brian J. Lane (202-887-3646, firstname.lastname@example.org)
Amy L. Goodman (202-955-8653, email@example.com)
James J. Moloney (949-451-4343, firstname.lastname@example.org)
Michael J. Scanlon (202-887-3668 , email@example.com)
John S. Hess, Jr. (202-887-3700, firstname.lastname@example.org)
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