ABSTRACT
The law covers even routine information, not just mega deals. Anything that is deemed “material” information, such as quarterly earnings, stock splits and buybacks qualifies as insider information until disclosed publicly. In 2000, the Securities and Exchange Commission (SEC) made selective disclosures of material information illegal with the passage of “Reg FD” or fair disclosure. To avoid breaking the law, companies must disclose anything material via press releases, the 8-K filing, a statement on the company’s website or on social media. The information can be shared on a conference call, if the media are notified in advance. The use of social media platforms is a relatively recent addition to acceptable disclosure methods. And it has been a source of great aggravation for the SEC, especially when chief executive officers such as Elon Musk at Tesla go rogue. “Deficit corporate cultures are often the cause of the most egregious securities law violations,” Mary Jo White, former SEC chief, said.
