Securities and Ex-change Commission Regulation FD isn’t going away anytime soon. Adopted last fall, FD (which stands for fair disclosure) restricts selective disclosure of material non-public information. But FD needs to be reformed to reflect the realities of the Internet age. FD should be amended to explicitly acknowledge that publication on a company’s Web site constitutes public disclosure. The SEC also should endorse the federal statutory safe-harbor provisions for projections. These two changes would make the disclosure process more transparent and useful.
FD spawned controversy and confusion from the start. Critics continue to question the need for FD, arguing there is little reason to mandate absolute equality of information among investors. They also maintain that there are few egregious cases of intentional selective disclosure, and that there already is an abundance of information in the marketplace.
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