Recent Actions by the SEC Under Regulation FD

Lyle G. Ganske and Tom J. Smolders

On November 25, 2002, the SEC provided the long-awaited poster children for Regulation FD violations by instituting settled enforcement actions against three companies and issuing a Report of Investigation against another. As you are aware, Regulation FD prohibits selective disclosure by requiring public companies to disclose material, non-public information by certain prescribed methods that are designed to achieve broad dissemination. Although there is little of surprise in these four actions, briefly described below, they provide insights into the changing definition of materiality, the adequacy of internet disclosure and the SEC's predisposition against private conversations with analysts.