Masterbeat Corp (MSTO)

[Dr Blunt]

The practical application of Reg FD $MSTO conversations.
(opinion) Discussions with CEO Josh should be done in writing (as a permanent record) and/or conversation recorded for publication. Casual phone access to CEO Josh is problematic and one he should re-think. Suggestions could include Q&A correspondence, company open conference calls, and recorded conversations recorded for public publication.

Example:
(Tweet) ### they wrote:
Hello, I directly contacted Josh last week with the phone number provided. He gave me about 45 minutes of his time and answered all my questions that he could. If you can't get ahold of him call or text the number he provided.

What is Regulation FD?

Regulation FD (for “Fair Disclosure”), promulgated by the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), prohibits companies from selectively disclosing material nonpublic information to analysts, institutional investors, and others without concurrently making widespread public disclosure. The rule reflects the view that all investors should have equal access to a company’s material disclosures at the same time. Since its enactment in 2000, Regulation FD has fundamentally reshaped the ways in which public companies conduct their conference calls, group investor meetings, and so-called “one-on-one” meetings with analysts and investors.

Why was Regulation FD adopted?

Regulation FD is intended to promote full and fair disclosure of information by issuers. The SEC adopted Regulation FD to address the selective disclosure by issuers of material nonpublic information. In its adopting release, the SEC referred to publicized reports, describing that many issuers were disclosing important nonpublic information, such as advance warnings of earnings results, to securities analysts or selected institutional investors or both, before making full disclosure of the same information to the general public. Where this had happened, the SEC observed, those who were privy to the information beforehand were able to profit or avoid a loss at the expense of those kept in the dark.

What does Regulation FD require?

Under Regulation FD, whenever a public company, or any person acting on its behalf, discloses material nonpublic information to certain enumerated persons, the company must disclose that information to the public. The timing of the required public disclosure depends on whether the selective disclosure was intentional or unintentional. Accordingly, the company must make this public disclosure (i) simultaneously, in the case of intentional disclosures, or (ii) promptly afterwards, in the case of unintentional disclosures. The public disclosure may be made through an Exchange Act filing (such as a Current Report on Form 8-K) or through any method reasonably designed to effect broad, non-exclusionary distribution of the information.

See ref: https://media2.mofo.com/documents/faqs-regulation-fd.pdf to review the complete text.