Replies to post #12888 on Dump The Pump

[scion]

Final Rule: Selective Disclosure and Insider Trading
http://www.sec.gov/rules/final/33-7881.htm

II. Selective Disclosure: Regulation FD

A. Background

As discussed in the Proposing Release,5 we have become increasingly concerned about the selective disclosure of material information by issuers. As reflected in recent publicized reports, many issuers are 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 has happened, those who were privy to the information beforehand were able to make a profit or avoid a loss at the expense of those kept in the dark.

We believe that the practice of selective disclosure leads to a loss of investor confidence in the integrity of our capital markets. Investors who see a security's price change dramatically and only later are given access to the information responsible for that move rightly question whether they are on a level playing field with market insiders.

Issuer selective disclosure bears a close resemblance in this regard to ordinary "tipping" and insider trading. In both cases, a privileged few gain an informational edge -- and the ability to use that edge to profit -- from their superior access to corporate insiders, rather than from their skill, acumen, or diligence. Likewise, selective disclosure has an adverse impact on market integrity that is similar to the adverse impact from illegal insider trading: investors lose confidence in the fairness of the markets when they know that other participants may exploit "unerodable informational advantages" derived not from hard work or insights, but from their access to corporate insiders.6 The economic effects of the two practices are essentially the same. Yet, as a result of judicial interpretations, tipping and insider trading can be severely punished under the antifraud provisions of the federal securities laws, whereas the status of issuer selective disclosure has been considerably less clear.7

http://www.sec.gov/rules/final/33-7881.htm

[Stock]

The SEC recognizes "company sponsored forums" as a place company officials may discuss their crap.

iHub, YahooFlaymance and RagingTool are not "company sponsored" nor will they ever be.

Factbook and Twister MIGHT meet the criteria -- nobody has brought a case yet to test them.

The problem is - these company-sponsored fora have to be OPEN for all to READ (the law says nothing about allowing others to comment, filtering or censoring annoying comments, etc). And you know that slope would be far too slippery -- eliminate all comments but the TRUE LONGS and you can say and do what you want, THEORETICALLY.

There are a few listed stock company officials that are testing out Twister. One did it over the objection of his legal department, so I read.

This is still new ground.

Whoever does it, I hope they have a legal slush fund in reserve to handle the lawsuits.