SEC says blogs = proper disclosure

by Mathew on July 31, 2008 · 3 comments

Reading through Brian Solis’s excellent guest post over at TechCrunch about the new SEC disclosure rules reminded me that I wanted to write something about them, and would have done so if my Rogers internet connection hadn’t gone down for about five hours today (thanks a lot, Ted). I know the announcement got covered a fair bit, but I think this development is pretty ground-breaking and potentially game-changing (there’s a good overview at IR Web Report). In many ways, the SEC is really just recognizing the digital media explosion that has occurred over the past couple of years. Better late than never, I suppose.

Brian says it could (or should) mean the death of the press release. But will it? I doubt it (and so does John Furrier). That’s because the issuing of press releases happens for a whole host of reasons, apart from just the need to fulfill federal disclosure requirements, otherwise known as SEC regulation FD. Lots of companies will happily push out meaningless press releases, with no “social media” features such as links or audio/video clips, either because they are blissfully unaware of what they are missing, or because they know that lots of papers and websites will run them verbatim anyway (which they will).

Whether it means the death of the press release or not, it is still a pretty dramatic change for the SEC to make. In effect, everything becomes a news-wire service now, as far as the regulator is concerned: blogs, blog networks, websites of all kinds. If information appears on the Internet, it effectively fulfills the disclosure requirement. This is something that lots of people have been calling for — most notably Sun Microsystems CEO Jonathan Schwartz, who asked the SEC for the ability to use his blog as an FD outlet about two years ago. And it makes people like George Tsiolis of Agoracom pretty happy too.

Will some companies move towards using their own websites and blogs as information dissemination vehicles, the way Google does? I hope so. What that does to the business model at Business Wire and other services remains to be seen.

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