SEC provides guidance regarding use of company web sites to disclose information for investors

Abstract

PurposeThe purpose of this paper is to summarize and analyze SEC guidance to companies and issuers of securities on the use of company web sites to disclose information to investors, as published in an interpretive release, Release 34‐58288, Commission Guidance on the Use of Company Web Sites.Design/methodology/approachThe Release provides guidance to public companies posting information on their web sites, including: when information posted on their web site is considered “public” for purposes of the “fair disclosure” requirements of Regulation FD; the application of the antifraud provisions of the federal securities laws to information posted on company web sites; the types of controls and procedures advisable with respect to posting information; and the appropriate format of the information presented on the web site.FindingsWhile the Release sanctions web site‐only disclosures in some cases, companies should continue to file particularly important or time‐sensitive information with the SEC and also issue a press release. To avoid liability for “republishing” historical information, companies should organize their web sites so that previously posted statements and materials are separately located and identified. Companies should make the context of hyperlinked information clear; a company will not be shielded from antifraud liability for hyperlinking information it knows, or is reckless in not knowing, to be materially false or misleading. To avoid liability, companies should clearly identify summary information as such and alert readers to the location of more detailed disclosure. If a company chooses to post certain information such as non‐GAAP financial measures, committee charters, and amendments to codes of ethics on its web site in lieu of filing it with the SEC, that information should be subject to the same disclosure controls and procedures that apply to information filed with the SEC. Acknowledging that information on company web sites is becoming increasingly interactive and not static, the SEC will not require information appearing on company web sites to satisfy printer‐friendly standards unless already specifically required by SEC rules.Practical implicationsIn view of the principles suggested in the SEC's guidance, each issuer should carefully review its disclosure policy and web site.Originality/valueThe paper offers practical guidance by experienced securities lawyers