Seibel Beats the SEC

Good news for investors. The courts have thrown out a claim by the SEC that Siebel Systems violated Regulation FD. Adopted in 2000, Reg FD (for fair disclosure) requires companies to tell the public the same info as Wall Street.

Kenneth Goldman, Seibel’s CFO, told a private group that Siebel’s business was looking good. The stock jumped 8% the next day. The SEC went after Seibel although the company felt that this was an unreasonable interpretation of the regulation. In fact, this was the second time that the SEC went after Siebel on Reg FD. Judge George Daniels said that “the statements relied upon by the SEC in its complaint do not support an allegation of nonpublic material disclosure.”

In his decision, Judge Daniels wrote:

Such an approach places an unreasonable burden on a company’s management and spokespersons to become linquistic experts, or otherwise live in fear of violating Regulation FD should the words they use later be interpreted by the SEC as connoting even the slightest variance from the company’s public statements. Regulation FD does not require that corporate officials only utter verbatim statements that were previously publicly made.

Here’s more on the potential aftermath of this ruling.

Posted by on September 6th, 2005 at 9:23 pm


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