A. When Information Posted on a Company Website is “Public” for Purposes of Regulation FD
The SEC’s discussion of whether and when information posted on a company website will be considered “public” for purposes of Regulation FD implicates two important Regulation FD issues:
Do private discussions of information after the information has been posted on a company website violate Regulation FD?
Does posting information on a company website satisfy Regulation FD’s “public disclosure” requirement?
The release adopts a subjective, “facts-and-circumstances” approach rather than a “bright-line” approach to answer these questions. The release suggests that a company consider whether (1) its website is a “recognized channel of distribution,” (2) posting information on the website “disseminates” the information in a manner that makes it available to the securities marketplace in general, and (3) there has been a reasonable waiting period for investors and the market to react to the posted information.
Recognized Channel of Distribution; Dissemination
The release explains that the SEC will consider a company website to be a “recognized channel of distribution” when the company has taken steps to alert the market to its website and its disclosure practices. The SEC will also take into account the extent of investors’ use of the company website.
For companies whose websites are known by investors as a location of company information, “dissemination” turns on (1) the manner in which the information is posted on the company website, and (2) the timely and ready accessibility of posted information to investors and the markets.
The release provides a non-exclusive list of factors for a company to consider in evaluating whether its website is a “recognized channel of distribution” and whether information posted on the website is adequately “disseminated”:
whether and how the company informs investors that it has a website that they should look at for company information; whether the company has notified investors that it will post important information on its website and whether it typically posts important information on its website; whether the website directs investors to investor-related information, whether such information is prominently disclosed in a location routinely used for such disclosures and whether the information is posted in a format that is readily-accessible to the general public; whether the market and media regularly report on information posted on the website and the extent to which the company has advised newswires or the media about such information; the size and market following of the company involved; the steps the company has taken to make its website accessible, including the use of “push” technology or releases through other distribution channels either to distribute the information or advise the market of its availability; whether the company keeps its website current and accurate; whether the company uses other methods (in addition to website posting) to disseminate the information and whether such methods are its predominant methods for dissemination of company information; and the nature of the information.
This means companies are responsible for statements made by the company or on its behalf on their website or a third party website, and liability cannot be avoided by purporting to speak in one’s “individual” capacity.
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