As discussed in the prior post, "Legal Insider Trading?" (click here), I reached out to the SEC to get its take on the significance and implications of the assertion that corporate disclosures going out over the same PR wire service are being delivered at different times to investors. To briefly recap, a recent article by IR Web Report (click here) states that

leading PR wire services used for corporate disclosure do not deliver information simultaneously to all investors, and that “some investors, mostly professionals with access to expensive subscription services, are trading in extended hours on information they receive from companies up to several minutes ahead of most other investors who rely on public sources of information, such as company websites or popular investment websites like Yahoo! Finance.”

SEC spokesman John Nester declined to discuss the facts set forth in the IR Web Report specifically, but stated that

Regulation FD requires that when a company discloses material non-public information to one of the enumerated persons, it must simultaneously either file a Form 8-K or use an alternate means of public disclosure that is dissemination of the information through a method or methods of disclosure that is reasonably designed to provide broad non-exclusionary distribution of the information to the public.

Read into that what you want. My sense, however, is that at the SEC does not consider the scenario laid out in the IR Web Report article to be a violation of Reg FD.

What do you think? Please offer your opinion in the Comments section below.

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