Regulation Fair Disclosure, or Reg FD as it is commonly called, was enacted more than five years ago by the SEC to require companies to provide information to all investors at the same time. As a result, it opened up conference calls and analyst/investor meetings to the media in the form of Web casts and actual attendance. Reporters have been able to get more information from companies as a result. In addition, companies haved filed more information with the SEC to comply with Reg FD.
So business reporters should be alarmed with the comments from the head of the U.S. Chamber of Commerce in this morning’s Washington Post. Chamber President Tom Donahue said, “Reg FD, while a well-intentioned attempt to level the playing field of information, has ended up chilling corporate speech. Faced with the SEC’s hyper-enforcement regimes, corporate lawyers advise their management to say as little as possible about what is happening at the company.”
The full article can be found here. Note that Donahue also said that the practice of companies giving earnings guidance, another staple of business coverage, should be discontinued.
I’m not sure what to make of Donahue’s Reg FD comments. But if they’re the first shot fired in an attempt by Corporate America to get Reg FD off the books with a new regime at the SEC, then business journalists need to be prepared to battle for their rights.
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The comments from Donohue are little surprise, what's a surprise is that there hasn't been more outrage about the fact that when you're actually on a call that the spefically ask journalists not to talk. When are you supposed to ask these guys to talk, when their non-responsive PR departments don't get back to you?