The SEC’s First Enforcement Actions Under Regulation FD: Lessons Learned, Questions Remaining

Regulation FD became effective on October 23, 2000. The SEC intended the Regulation to address a perceived inequity in the way that public companies disseminated information to favored analysts and financial professionals. The Regulation was controversial and subject to much comment and debate, and persons affected have awaited Commission action—particularly through the enforcement division—to clarify its scope. The SEC’s two-year silence since the Regulation became effective has only heightened the suspense. On October 25, 2002, the Commission broke its silence when it instituted three settled enforcement actions (all administrative “cease and desist” proceedings) and issued a “Report of Investigation” (a “21(a) Report”) relating to Regulation FD. As is often the case with “first out of the box” proceedings, the Commission’s actions answered some questions, left others open, and raised new ones.

This White Paper provides a short summary of the Commission’s recent proceedings and discusses their implications.

For the full story, please view the PDF.