When is Disclosure not Disclosure?

November 10, 2010

by Gregg A. Castano, President, Business Wire

Gregg Castano, President, Business Wire


Forget about level playing fields, Regulation FD, interpretive guidance and recognized disclosure channels. What about good, old-fashioned EFFECTIVENESS?

Have we entered a bizarro world in which simultaneously making material information available to millions of investors via every conceivable communications method known to modern man has somehow become LESS effective than posting that same information to one, lonely site on the Internet and hoping that whomever wants access to it will come a lookin’?

If that’s the case, then the sky isn’t really blue, death and taxes aren’t sure things and 15 minutes can’t save you 15% on your car insurance.

Why would it be considered MORE effective, or even sane for that matter, to force every investor, private or professional, to have to frantically hop from web site to web site to web site ad infinitum on any given earnings reporting day to gain access to news that is already fully aggregated and uniformly available in real-time to them at no charge in any number ways, including the mobile phones in their pockets?

Is this some kind of plot against investors by corporate mad scientists, or maybe a sick prank being played upon the investment public by the angry and vengeful ghost of Kenneth Lay? Did Foolish suddenly become the New Wise?

Why wouldn’t the SEC, an organization that should be leaping at every opportunity to undo the damage to its credibility caused under previous Chairman Rufus T. Firefly . . . I mean Christopher Cox, step in and put an end to this electronic game of “Where’s Waldo?”.

Questions, questions. The answers to which seem simple enough that my seven year old twins can easily grasp them. But I guess the obvious has turned into the obscure and the direct into the circuitous. The only thing left for me to do is go home and tell my twins that Daddy was wrong; two plus two actually equals five.

NIRI National Sessions Miss the Mark on Disclosure

June 14, 2010

– by Michael Becker, SVP, Financial Product Strategy

Michael Becker

In my humble opinion, the 2010 NIRI National Conference was a tremendous success, albeit in one area.

The annual conference committee’s courage to tackle hot button issues like the SEC’s Regulation FD Interpretive Guidance is commendable.  However, in its zealousness, I believe attendees were over-served FD, often by ill-informed “experts” and biased parties.

Ill-informed experts and biased parties speaking at NIRI National? Why, yes.

Daniel Kinel of Harter Secrest & Emery LLP, in his session “Fair Disclosure and the Web,” stated that a six-minute delay between web-posting and an 8-K was “simultaneous enough.”  (As an aside, I approached Mr. Kinel and explained why six minutes at 4:00 pm ET is a wide gap — i.e., after-hours trading.  His response: “Good point.”)

How about James Moloney of Gibson, Dunn who believes leveraging notice-and-access news release disclosure for earnings can save an issuer $40 – 50K annually?  (Mr. Moloney, ever heard of a Metro distribution?  It’s only $210).  Mr. Moloney also discussed the newswire upload process, calling it an extra, cumbersome step.  That is a pretty myopic view coming from a person who is paid to protect his clients.  The extra step ensures that material news content is vetted, secure, error-free, properly formatted and disseminated to the markets in a ubiquitous manner.  My hunch: Mr. Moloney will be busy when issuers self-publish content via WYSIWYG tools with errors (spelling, formatting, etc.).

While the web is assuredly more important for issuer communications than ever before, I do not believe there has been a seachange since the late-2008 survey that found securities attorneys favor wire services over corporate web sites for disclosure of material news. Maybe the Moloneys of the world see the Reg. FD Interpretative Guidance issue as a way to increase billable hours? Furthermore, research has shown greater dissemination improves stock liquidity and lowers volatility while enhancing a firm’s visibility; it can even lower the cost of capital.

Finally, how about ThomsonReuters, who spent a pretty penny on its lunch session, just to tell issuers how disseminating to a handful of distribution points via its mechanism is best practice? (I liken it to telling my son to strive for a C because it’s passing.)

It’s one thing to discuss a topic openly in a transparent manner; it is entirely different when NIRI members are plied with inaccurate information over the course of multiple redundant sessions.  For a more accurate look at what NIRI members really feel constitutes proper disclosure, see Neil Hershberg’s recent entry, “Common Sense in Investor Relations.”

In closing, I am young, hungry and ambitious. There is no way I would hitch my wagon to an antiquated business model. Furthermore, I am a realist when it comes to the technology adoption curve and genuinely believe if/when the time comes that another model for material news distribution is better for issuer communications, Business Wire will be right there, doing what we have done for 50 years, evolving to suit the needs of our customers.

Until then, take a step back, look past the self-interested zealots and see the forest for the trees; traditional newswire services today provide the single best method for satisfying Regulation FD disclosure. PR Newswire’s long-time consultant Mark Hynes states it best: “If I believed that they were making buggy whips, I wouldn’t be there.”

Inadequate Disclosure: The Truth About Transparency

May 3, 2010

– by Neil Hershberg, Senior Vice President – Global Media, Business Wire

It is the hidden paradox of the regulatory reform debate dominating today’s headlines. While improved disclosure and transparency are widely seen as the ‘silver bullets’ to remedy Wall Street’s worst abuses, the integrity of the disclosure process itself is under attack.  And individual investors are once again in danger of bearing the brunt of the damaging fallout.

For all the current talk among reformers, regulators and journalists touting the need for better disclosure and transparency, there is an inconvenient truth that is being ignored. Hardly anyone has bothered to “look under the hood,” specifically to examine the engine that drives the disclosure process. It is deliberately being throttled, resulting in ‘inadequate disclosure,” and having the reverse impact of what the reform movement is seeking to accomplish. Today’s transparency challenge could very well lead to tomorrow’s financial crisis.

Equal and Unrestricted Access to Market-Moving News

Disclosure has traditionally been defined as providing material information to ALL market participants, simultaneously and in real-time. The ideal is that all investors have equal and unrestricted access to market-moving news that may influence their investment decisions. The SEC, under Arthur Levitt, got it right when it published Regulation Fair Disclosure in 2000, formalizing the egalitarian concept of a ‘level playing field.’

By most accounts, Reg FD as originally conceived worked reasonably well, correcting certain practices that had favored Wall Street professionals, often at the expense of the average investor.

Unfortunately, the SEC didn’t leave well enough alone. It tinkered with Reg FD during the Christopher Cox regime, coming up with a solution for a problem that didn’t exist.

Interpreting the SEC Interpretive Guidance

The agency issued its Interpretive Guidance Release on Web-based Disclosure in 2008, and it quickly proved to be the modern-day equivalent of a Rorschach test for investor relations professionals. The SEC’s guidance left much to the imagination, and that is the crux of the problem. Nearly two years later, IR professionals are still trying to figure out what it all means.

Rather than providing clarity as to the appropriate use of technology in investor relations, the SEC’s guidance offered ambivalent guidelines and imprecise circumstances that created unnecessary uncertainty in the marketplace.

The true intent of the SEC’s guidance was to encourage companies to make more information available to the marketplace, by posting ‘supplemental’ news to their corporate web sites, information that may not have warranted a news release. Unfortunately, the message never resonated with the IR community, which failed to appreciate that the SEC’s guidance was simply meant to augment their communication initiatives.

The agency’s indecisive guidelines have led to predictable results, and unintended consequences. Whenever there is a perceived policy void, opportunistic individuals will seek to step in and fill the breach. Many self-anointed experts have aggressively advanced their own interpretations of the SEC’s intent, which coincidentally coincide with their own commercial interests.

Inadequate Disclosure

More ominously, however, a handful of companies have tested the waters by deliberately limiting the information that is broadly disseminated to investors. Several companies have published “notice-and-access” releases, which are brief announcements that direct investors to full-text postings on corporate websites.

Based on the sharply critical response, no one has confused “notice-and-access” with “best practices.”  The decision continues to be unpopular among journalists and investor advocates. Obviously, no one wants to play “Where’s Waldo?” during earnings season, or go scrambling for information in today’s millisecond trading environment.

The equation is clear:  “Notice-and-Access”= Inadequate Disclosure.  No advanced calculus required here; it’s Logic 101.

Here’s a checklist of critical shortcomings:

  • Simultaneous?  No.
  • Easy and equivalent access for all investors. No.
  • Archived permanently in leading databases? No.
  • A definitive audit trail for regulatory and legal review? No.
  • Protection against future insider-trading allegations? According to authoritative legal experts, no.
  • In synch with the SEC’s intent to consolidate financials in a universal programming format [XBRL]?  No.
  • Worth the risk for the modest cost-savings involved? Definitely not.

Best-Practice Disclosure Mosaic

The bottom line is that disclosure is a mosaic of distribution channels; all platforms that encourage investor outreach  — traditional, web-based, and social media — should be embraced as part of an integrated and comprehensive IR strategy. The use of Business Wire ensures simultaneous, secure and real-time delivery of price-sensitive information to ALL market participants. Corporate web sites, RSS feeds, and other emerging technologies can, and should, play an important complementary role in reaching investors.

Business Wire is a strong proponent of orderly and efficient capital markets; we are justly proud of the critical infomediary role that we play in the process. Of equal importance, we pride ourselves on the outstanding value proposition that we provide our clients, which continues to expand with the addition of new mobile applications, SEO platforms, and enhanced metrics that quantifies our return on investment.

The cost of our service is fair; the value we provide could be described as extraordinary. And when all the different expense elements that public companies pay annually to meet their listing requirements and disclosure obligations are considered, Business Wire clearly ranks as one of the least expensive charges among all compliance expenditures.

Better disclosure and transparency may well be the answer to the problems that have plagued our financial system. We ask that if improved disclosure and transparency requirements are indeed part of the financial reform package that is ultimately enacted, that the integrity of the disclosure process is upheld, and that the interests of ALL investors are protected.

Web-Based Disclosure Still Not Ready for Prime Time

July 29, 2009

The one-year anniversary of the SEC’s Interpretive Guidance Release on web-based disclosure will likely pass unnoticed this weekend– and for good reason. In the eyes of most market participants, it has proven to be a non-event that has gained little traction among issuers reluctant to tinker with a proven and effective disclosure system that works exceptionally well.

In retrospect, there are several reasons why the SEC’s Guidance Release failed to become the landmark event that its supporters had hoped for:

  • Within weeks of its issuance, the global financial system was in danger of imploding, diverting the attention of the media, the investment community, and other key audiences. As the markets teetered, most constituents were oblivious to the change — and a good many continue to be unaware of its potential implications to this day.
  • The fact that web-based disclosure was a pet project of former SEC Chairman Christopher Cox, vilified by some observers in the wake of the financial crisis, wasn’t a selling point either.
  • At the end of the day, however, the major reason why the SEC’s Guidance Release has had marginal impact is simple: The financial marketplace recognized its very real shortcomings. In the process, investors have tacitly reaffirmed a proven regulatory disclosure model that has emerged as the global gold standard.

The orderly flow of price-sensitive information to all market participants — available simultaneously, in real time, and without restrictions, to institutional and individual investors alike — was judged to be too important to be left to chance.  RSS feeds, corporate blogs and standalone web postings are no substitute for the broad-based distribution of a news release via a secure multi-channel distribution platform.

The SEC’s Guidance Release purposely lacked clarity and definition; the variables to meet compliance standards ultimately proved far too vague to justify the risks.

Furthermore, we see constant reminders of why credible information channels are so important. Just this past weekend, Reuters rejected a faxed release originating from the Middle East about a purported takeover that was later exposed as being fraudulent. The editor on duty immediately questioned why a release of this magnitude wasn’t transmitted via a recognized commercial news wire such as Business Wire — and he correctly decided not to run the story.

There is a lot more to the disclosure process than simple “information access.”  Authenticating the source, editorial review, and secure networks all contribute to the effective functioning of the global financial markets. We’ve spent nearly a half-century earning our stripes as a reliable, credible news source, which is more important than ever as governments grapple to restore financial stability and transparency.

We certainly don’t want to seem dismissive of the SEC’s Interpretive Guidance Release. In the final analysis, it cast a much-needed spotlight on important new technology tools that help to expand  investor outreach.

We stated from the outset that corporate web sites, blogs and RSS feeds are indeed valuable adjuncts that can help get the corporate message out. We are certainly huge proponents of technology and, in fact, use many of these complementary tools to augment our patented news delivery network.

It is reassuring to note that once the initial hoopla surrounding the SEC’s Guidance Release died down, reason ultimately prevailed. Slowly emerging is a hybrid approach that retains the broad-based disclosure model at its core, while also including the ancillary communications channels cited in the agency’s position paper.

We’ve seen this evolution before — our own distribution network went from telephone lines, to satellite systems, to Internet protocol. Along the way, we folded in fax, e-mail, RSS feeds, blogs, IR web sites, and any other communication tool that will increase “full and fair” disclosure.

The real winner now that the dust has finally settled: Investors who are enjoying the best of all possible worlds.

– Neil Hershberg, Senior Vice President, Global Media for Business Wire

Cathy Baron Tamraz Discusses Disclosure and Transparency

April 30, 2009

Cathy Baron Tamraz, Business Wire President & CEO, discusses the challenges facing Treasury Secretary Timothy tamraz_cathy_baronGeithner regarding maintaining and increasing transparency in the financial markets in a new commentary at FinReg21.

Tamraz’s recommendations, combined with new SEC chief Mary Schapiro’s “visceral reaction” to the idea of web-based disclosure in which market participants have to go looking for financial information, are good news for the markets and for investors.  Tamraz talks about the press release as a disclosure vehicle, and how the existing framework for news distribution is already in place to help Sec. Geithner reassess the state of disclosure and help avoid future financial crises.

Go read, and let us know what you think in the comments below.

Dominic: “We’re Just Not That Into You”

February 6, 2009

While we are not in the habit of engaging in discourse with the blogging equivalent of someone standing in the middle of Park Avenue screaming at the top of his lungs that the world will end unless we sinners repent, it is amusing to us that Mr. Dominic Jones seems to become more and more unhinged as we, as is our right, continually highlight and crystallize the many valid benefits of disclosure via our simultaneous news distribution platform.

Everyone is entitled to their opinion, and we would be happy to engage in a serious, reality based dialogue with anyone who wishes to discuss the case for website disclosure.  We’ve done so numerous times, in a highly appropriate and professional manner, with the likes of the SEC, the New York Stock Exchange and Sun Microsystems. Though we may not always agree, we all still respect each other.

However, let us be clear that we will not, from this point forward, get ourselves involved in any conversations, online or otherwise, with any self-styled disclosure evangelists who appear unable to have a reasoned, mature, philosophical discussion about a topic on which we disagree, having instead to resort to childish tantrums of name-calling (surprised we haven’t seen “liar, liar pants on fire” from him yet) and even resorting to characterizing highly respected members of the financial media who do not share his opinions as “pimps”.  We choose not to muck around in that mud.

So let us conclude by saying we believe in the value, validity and integrity of our business, and would gladly continue to go into great detail about that with anyone who wishes to hold a reasoned, adult conversation on the topic.  And if, in the end, we cannot convince you of our convictions, we promise not to call you a liar.

Gregg A. Castano, Co-Chief Operating Officer, Business Wire

Earnings Tables Needed in Releases Say Market Participants

February 5, 2009

With earnings season in full swing, it’s a good time for us to reiterate a critical best-practice issue:  include earnings tables in your press release.  Notice-and-access, the practice of omitting tabular data from a press release in lieu of a link to the data is clearly a step in the wrong direction. 

We have an ongoing dialogue with the major financial wires, news services, regulatory authorities, investor systems, information portals and investor relations officers about this and other disclosure issues to ensure Business Wire delivers the type of content market participants want. 

The incontrovertible evidence is clear: key market participants want releases to include financial tables (‘face financials,’ at the minimum). Additionally, issuers reap tangible economic benefits by including-and broadly disseminating-core financial data to the investment universe. A recent academic study statistically validates the significant return on investment for listed companies that are pro-active in their investor outreach.

In a trading environment where latency and milli-seconds are often critical to success, notice-and-access releases are unnecessary impediments that are disruptive to the seamless workflow procedures favored by both institutional and individual investors.

Providing core financial data to editors, analysts and investors in a freely accessible press release—transmitted simultaneously and in real-time—consolidates material information in a readily digestible format, streamlining both availability and analysis.

An informal survey of key market observers lends independent credence to the argument:

“We would very much like to see the tables included as part of a release,” said Rick Stine, senior editor, Americas, Dow Jones News Services. “Companies that include truncated data in the text of a release are often highlighting the numbers they want you to see, not the GAAP numbers that they are ultimately required to report. We believe it is important for them to continue reporting in the easiest fashion possible the GAAP numbers. Having to make people take extra steps to find them to me isn’t a great idea. I do think convenience for readers is important.”

Martin Howell, news editor, company news, the Americas, Reuters News, said, “We always need the table—it helps us on speed, it helps us to be fair, it helps us to compare and contrast, it helps us to get beyond the spin. Why would anyone drop the tables unless they had something to hide?”

The National Investor Relations Institute [NIRI] arrived at similar conclusions in its recent study of industry “best practices.”  NIRI’s soon-to-be published Earnings Release Standards of Practice makes the following recommendations:

  1. Content    a. Provide sufficient line-item information for the investor to follow the calculation from revenue to net income    b. Use a consistent format to display shares outstanding
  2. Provide a complete income statement, with current and year-ago quarter numbers, and current year-to-date and year-ago year-to-date comparable period numbers. To avoid confusion, label numbers as audited or unaudited, particularly at year-end if the released numbers are not yet audited and could change in the 10-K filing. Income statement should include number of shares outstanding, fully diluted and basic, for each publicly listed stock
  3. Provide a complete balance sheet, with current quarter numbers and end of prior-year numbers, labeled as audited or unaudited
  4. Provide cash flow tables, if possible. Both the CFA Institute and the SEC’s CIFiR Committee recommend inclusion of cash flow tables. However, some companies note that this information may not be finalized at the time the earnings release is issued.
  5. Provide consistent supplemental company or segment information as appropriate.

There also are financial rewards for issuers that are truly committed to communicating with investors.  Eugene Soltes, a doctoral candidate at the University of Chicago Booth School of Business, found a statistically significant relationship between greater dissemination of company-generated news and corresponding capital market benefits, including lower bid-ask spread, increased trading volume and lower idiosyncratic volatility. A key finding: “A reduction in trading costs due to greater dissemination may also contribute to a lower cost of capital.”

As public companies move to adopt recent SEC mandates to XBRL tag financial data, the need and value of these tables will only increase.

Our focus has been on delivering value; we can say with both pride and certainty that we provide tremendous value at a fair price, while also playing a key role in promoting market efficiency. 

We take great pride in having the industry’s only fully XHTML news platform, ready to deliver XBRL tagged information to market participants.

Neil Hershberg, Senior Vice President, Global Media, Business Wire

New Research Study Finds Causal Relationship Between News Dissemination and Capital Markets Benefits

January 9, 2009

 Business Wire’s deep-seated belief that the dissemination of price-sensitive information over a recognized newswire enhances transparency is no secret. Sure, we take a lot of flack from so-called unbiased industry bloggers for our opinion, but the fact remains: the newswire is not only the most efficient and transparent method of disclosure, it is arguably the most cost-effective segment of the entire financial reporting supply-chain.

Our public stance on full and fair disclosure is nothing new. Back in 2000, just after Regulation FD went into effect, Business Wire was the first newswire to eliminate the 15-minute distribution delay to the financial community. Prior to this time the media received releases minutes before the financial community. More recently Business Wire has taken a strong stand on whether or not Web postings should constitute “disclosure.”

Research seems to indicate that Business Wire is correct in its thinking. After earlier reports citing a correlation between frequent public disclosure and share price stability comes new research indicating a definite causal relationship between news dissemination and capital market benefits.

Eugene Soltes, a doctoral candidate at the University of Chicago Booth School of Business, analyzed more than 9.3 million news releases from the post-Reg FD period and found a statistically significant relationship between greater dissemination of company-generated news and benefits including lower bid-ask spread, increased trading volume and lower idiosyncratic volatility.

According to Soltes, “Greater dissemination of firm news has the opportunity to broaden a firm’s base by attracting investors that were not previously familiar with the firm. The more broadly information is diffused to investors, the more investors who will be aware of this information. Consequently, greater dissemination of firm news is hypothesized to lower information asymmetry (and, by extension, a firm’s bid-ask spread).”

Interestingly, Soltes’ research finds causality: better liquidity and a lower cost of capital are not just statistically related to greater news dissemination, but are a direct result.

This is precisely why Business Wire has worked so hard to help you bring your news not just to investors here in the US, but around the world as well. The wire today is truly ubiquitous. Today we can disseminate your news to the financial community in just about any market, not to mention global retail investors via thousands of popular news and information sites. We also enable clients to meet regulatory requirements in more markets worldwide simultaneously than any other newswire service

Our full suite of investor relations options – including expert XBRL consulting – is yet another opportunity to lower corporate cost of capital and capture liquidity in the global marketplace.

We look forward to hearing your comments below.

-Michael Becker, VP, Global Disclosure and Financial Reporting Services, Business Wire

Michael leads Business Wire’s Investor Relations, Regulatory Filing and XBRL teams. He serves on the NIRI/NY board andthe XBRL-US steering committee and can be reached at 212-752-9600, ext. 1312 or michael.becker@businesswire.com.

Recent Regulatory Musings on Disclosure Practices & Today’s Maalox Markets

September 17, 2008

Today’s Maalox markets have understandably rattled retail investors, who have nervously watched their portfolios get pummeled by the distressed Dow.

When we’ll see a “return to normalcy” is anyone’s guess. Even the experts seem exasperated in trying to predict the market’s trajectory.

Restoring the tattered confidence of ‘Main Street’ investors promises to be a challenge, but their participation is key to getting our capital markets back on track.

Recent regulatory musings on disclosure practices, however, may prove to be a roadblock in the market’s recovery.

The SEC’s issuance of Interpretive Guidance on web-based disclosure has become a Rorschach test for the investment community, leading to wildly exaggerated assessments of the SEC’s true intent. While we view the SEC’s position on the use of corporate websites, RSS feeds and blogs for disclosure purposes as cautious and deliberate, others have cast the SEC’s stance to conform to their own self-serving agendas.

The SEC’s timing re its tinkering with disclosure reform is unfortunate, and its lack of clarity compounds the issue. The danger is that retail investors will remain on the sidelines, particularly if they sense that the playing field has tilted to their disadvantage.

The health of the financial markets is largely contingent on investor confidence and perceptions of market fairness. The SEC’s latest disclosure initiative is unlikely to reinforce either tenet among shell-shocked investors, who are in desperate need of reassurance and shelter from uncertainty.

The SEC’s proposition that standalone website postings, RSS feeds, and corporate blogs may satisfy public disclosure in select situations sends the wrong message to anxious investors.

One of the nation’s leading consumer advocates labeled the SEC’s guidance “non-disclosure disclosure” in a recent Reuters interview. At a time when many observers are calling for more stringent regulation of our capital markets, the SEC decision to seemingly relax disclosure requirements appears seriously out-of-step with the emerging consensus.

Business Wire believes that investors are in no mood to start engaging in an information scrum, ferreting out market-moving information that was once readily accessible via their choice of multiple, freely available platforms.

Regulation Fair Disclosure has proven so successful precisely because it lived up to its original vision and mandate: it created a level playing field for all investors. Business Wire is proud to have played a role in Reg FD’s practical implementation: Business Wire’s patented NX delivery system delivers news simultaneously and in real-time to the investor universe on an unrestricted and equivalent basis.

In our view, skittish investors have little interest in taking a crash course in forensic web-searching to pinpoint the information they are looking for. Broadly disseminated information, available without cost or restrictions via multiple distribution channels, remains the most effective way to satisfy the spirit and intent of Reg FD.

The SEC has come up with a solution for a problem that doesn’t exist.

–Neil Hershberg, Senior Vice President, Global Media, Business Wire

The SEC’s Interpretive Guidance on the Use of Company Web Sites: A Reality Check

August 8, 2008

In Business Wire’s response to the Securities and Exchange Commission’s (SEC) Interpretive Guidance release on the use of company web sites, we cite some very real concerns that the commission’s report did not effectively address. From security issues to simultaneity, the release provides no enhancements to the current disclosure model for material news and in fact introduces quite a bit of ambiguity with regards to disclosure.

Today, Reuters did an analysis piece on the issue that’s a good read. This excerpt cites a member of the SEC’s own Advisory Committee on Improvements to Financial Reporting (CIFR) which provided guidance to the SEC for this ruling:

“The advisory committee’s report says its recommendations on increased website usage are “not intended to affect the valuable role that newswires and other news vehicles play in disseminating important company information,” said advisory committee member Edward Nusbaum, chief executive of auditing firm Grant Thornton.

And this, citing a former SEC director who now advises companies on corporate governance:

“The SEC’s report outlining the guidelines says there are “very limited circumstances” where the Internet could be the sole way to disclose information, and urged companies to take additional steps to notify investors. No matter what the rules are, some people will abuse the system, said David Martin, co-chief of the corporate practices division at Covington & Burling LLP and former director of the SEC’s Division of Corporation Finance. “Am I going to say to my clients, ‘Play “Where’s Waldo” with this information?’ No,” said Martin, who advises companies on corporate governance.”

One thing we know for sure, the vast majority of public companies embrace the concept of full and fair disclosure, creating a level playing field for all investors, regardless of their technical sophistication in accessing news. Business Wire provides a secure, trusted platform for both news issuers and recipients. Authenticated content, issued with sub-second simultaneity via patented technology to all market participants, in a variety of formats so that tables and content are rendered properly in each setting.

For each individual issuer to replicate that level of distribution on their own is unrealistic. For end-users such as investor services, content aggregators and news services to accommodate the varying formats and technologies of individual issuers is also simply unrealistic. To say that RSS or Atom feeds do the same thing is naive at best and dangerous to a fair and open market at worse.

Business Wire works with tens of thousands of companies each year to accommodate their specific requirements in the dissemination of material news. Ask any of our professional editors if that process is turnkey. It certainly is not. They coordinate translations, fix formatting problems, catch typos and add keywords which are essential to the sophisticated coding systems/engines powering today’s information platforms.

We work with market regulators, exchanges, news services, content aggregators and a wide range of media to ensure our news feeds are received, parsed and displayed properly. Ask any of our development staff or the staffs of the vital sources of news if that process is turnkey. There is no such thing as “one size fits all” technology that would make the display and use of content work for the different technologies used by the thousands of recipients we accommodate. Our editors and our patented NX network accommodate the varying needs of these sources.

As we’ve moved from ANPA-based content to XHTML-based content, the push towards adoption of wider earnings tables by end-users has been a years-long process. With XBRL mandates on the horizon, Business Wire stands uniquely ready, with the experience and technology, to help issuers and recipients adapt to that reality. Don’t know ANPA, XHTML or XBRL? If you hope to push content out effectively, better start studying.

As for RSS and web postings, they are very important components of effective outreach. But they are just components. For example, Google scrapes sites for news. It doesn’t host news content. So, if you issue your release just after a scrape of your site, there’s going to be a delay in it showing up in Google searches. And if that’s your core method of distribution, you’ve got some unhappy shareholders that didn’t get your news or have to trade based on what external voices are saying about you in those search results.

The sources individuals trust to get their news continues to fragment. The cool thing about Business Wire is we are constantly working with new sources and technologies to ensure our news feeds are included in their offerings. To flip the model and say the onus is now on the individual to seek out and authenticate material news from public companies doesn’t make sense. Individuals already can create their own custom feed of content using RSS and Atom, but they don’t have to do that. They can also rely on their favorite website or investor service to do that for them, simultaneous to what professional investors see.

J. Robert Brown of the legal blog “The Race to the Bottom” has an interesting take on the SEC release as well, calling it a “great disappointment, containing nothing that the average security lawyer doesn’t already know.” The blog discusses how so much of the release’s offerings on a company’s ability to adopt different technologies and procedures for disclosure “depends upon the facts and circumstances.” Ambiguity, not clarity.

Finally, the failure to address the very real security issues that would naturally flow from the sole use of a company web site for disclosure postings is also troubling. This is particularly crucial in light of this week’s headline news about the FBI breaking a major international identity theft ring. On the identity theft case, they show how advanced and adept individuals can be (and how they can network together quickly) to exploit security weaknesses. On the SEC guidance, however, they are silent on the issue. To think that hackers and others won’t attempt to exploit public companies looking for unreleased, pre-posted material news is naive. Just read today’s news headlines to get a glimpse at the creativity of those seeking to gain unfair financial advantage.


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