Comments on Proposed Rule:
Selective Disclosure and Insider Trading
Release Nos. 33-7787, 34-42259, IC-24209, File No. S7-31-99
Author: Kevin Autrey at Internet
Date: 04/26/2000 11:34 AM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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I am against "selective disclosure" and FOR this proposed regulation.
Regards,
Kevin Autrey
Author: Judy Wong at Internet
Date: 04/26/2000 10:02 AM
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TO: RULE-COMMENTS at 03SEC
Subject: File No. S7-31-99
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April 26, 2000
Jonathan G. Katz, Secretary
Securities and Exchange Commission
450 5th Street, N.W.
Washington, D.C. 20549
RE: Proposed Regulation FD, File No. S7-31-99
Dear Mr. Katz:
On October 18, 1999, Chairman Arthur Levitt addressed the Economics
Club of New York and commented on an issue I believe is likely to have a
profound impact on our capital markets in the new millennium. Mr.
Levitt remarked that:
· "Quality information is the lifeblood of strong, vibrant markets.
Without it, investor confidence erodes. Liquidity dries up. Fair and
efficient markets simply cease to exist."
· "As the quantity of information increases exponentially through the
Internet and other technologies, the quality of that information must be
our single priority."
Mr. Levitt's comments demonstrate a genuine concern about the "quality"
of information affecting our capital markets. However, the Commission
has failed to implement regulations designed to stop a growing problem
that directly relates to the "quality" of such information. That
problem is the anonymous communication of inaccurate, deceptive or
misleading statements on the Internet regarding public companies. The
Commission devotes much attention to the quality of communications when
the source is identifiable, but has not sought to control anonymous
tipsters and commentators who publish with no concern for
accountability. With the advent of the Internet, the sponsorship of
stock information services and related message boards, a completely
non-regulated environment has been established which exists in tandem
with market-related information.
The proliferation of the Internet has dramatically increased the volume
of "information" available at the fingertips of investors, yet the
quality of such information has gone largely unchecked. The anonymous
nature of the Internet has lent itself to the creation of an environment
ripe for deceptive, misleading and manipulative practices by anyone
with a computer keyboard. Therefore, the Commission should expand
proposed Regulation FD to prohibit anonymous Internet communications
regarding public companies, and require the persons responsible for such
stock-related communications to identify themselves. Such a proposal
would tend to aid the "quality" of information available in our capital
markets and decrease market volatility.
Background - Rationale
The process of investing in our capital markets today is far different
from that of ten years ago. Today's investors have access to
instantaneous trading information and trading capabilities due to
technological advances in communications and the Internet. In
comparison, investing ten years ago was time consuming and costly. The
proliferating use of the Internet has benefited our capital markets in
many ways, but there have also been undesirable consequences.
For example, today's instantaneous markets have become increasingly
volatile. In 1991, the Dow Jones Industrial Average fluctuated by 2%
from its previous day's close on only about 8% of the trading days.
However, through April 17th of 2000, the Dow achieved 2% fluctuations on
over 20% of its trading days. The technology heavy Nasdaq, moreover,
has observed such 2% fluctuations on well over 50% of its trading days
in 2000. While many factors have contributed to the increasing
volatility of today's instantaneous capital markets, one such factor has
received increased publicity in recent years - the anonymous
communication of inaccurate, deceptive or misleading statements on
Internet sites. The dramatic effect such practices can have on a public
company's stock price in today's capital markets can be seen through the
following examples:
· In February 2000, eConnect's common stock traded at about $1.40. The
stock price soared to about $22 in early March 2000. The dramatic
increases were caused by a stockholder who posed as a financial analyst,
issued fake press releases, and pumped the company stock on the
Internet. The stockholder dumped his stock when the price rose, and
profited $1.4 million.
· Between April 1998 and October 1999, Callaway Golf Co.'s common stock
price fell from $27 to $12. During that time, an anonymous competitor
holding short positions in the company posted disparaging messages on an
investment message board on the Internet.
· In August 1998, Labor Ready, Inc.'s market capitalization lost $285
million in 90 minutes due to anonymous Internet rumors. The dramatic
volatility was due to false Internet chat room comments that the company
used illegal immigrants and was not properly accounting for taxes. As a
result of the rumors, the Company's stock price dropped from $30.88 to
$20.63.
· In December 1995, Iomega's stock price dropped $7 within hours after
an anonymous message appeared on an investment message board on the
Internet. The anonymous messenger claimed to have inside information
that quarterly earnings estimates would be revised downward by 50%.
These examples are only a sample of cases which have received public
notoriety. They graphically demonstrate how susceptible public markets
and public stocks are to false and misleading information, which is
aided in dissemination by anonymity. Everyday, so-called message boards
are filled with anonymous postings. This impacts public perception of
the markets in general and the Commission's reputation as an effective
regulator of market activity.
The increased volatility in our capital markets can be linked, in part,
to the "quality" of information reaching investors, as shown in the
above examples. Therefore, the Commission should expand the scope of
proposed Regulation FD to ensure the "quality" of information in our
capital markets by prohibiting anonymous Internet communications
regarding public companies, and requiring the persons responsible for
such stock-related communications to identify themselves.
Current Commission Regulation
In July 1998, in an effort to address a new threat to market integrity
and volatility, the Commission established the Office of Internet
Enforcement. Its first major action occurred in October 1998 when it
brought 23 separate cases against 44 individuals and companies who were
acting as stock promoters or touters using the Internet to promote small
stocks in exchange for undisclosed payments in violation of securities
laws. Additional cases were brought in February 1999 in a scheme that
is referred to as "pump and dump" involving false positive information
which causes investors to purchase, thus increasing the price and
permitting the promoters to sell their own shares profitably.
More recently, on February 25, 2000, securities fraud charges were
brought against James Sheret, Jr., and Glen Conley in connection with a
nationwide Internet-based scheme involving about 60 companies. Sheret
and Conley were charged with operating a fraud from November 1999 until
February 2000 in which they made approximately $1.13 million in illegal
profits. The two men allegedly sent hundreds of thousands of e-mails,
touting the investment prospects of thinly-traded, largely dormant
micro-cap companies whose stock they had purchased. They then disguised
the e-mails to make them appear as if they had been sent by Internet
service giant America Online. The criminal complaint alleged that the
men fraudulently opened e-mail accounts through 23 Internet service
providers across the country and used false information to conceal their
identity.
These cases indicate that the Commission is willing to diligently
investigate and prosecute deceptive or misleading activities on the
Internet to ensure the high-speed flow of "quality" information to
investors and protect investors from market volatility. An affirmative
requirement to identify the communicator would be a reasonable step to
help thwart such reckless communication, thereby lessening the cost of
investigation and prosecution.
Full Disclosure Proposal
The Commission should further its efforts of ensuring the flow of
"quality" information and limiting market place volatility. Therefore,
the Commission should expand the scope of proposed Regulation FD to
include the following provision:
"Any person transmitting a statement to a publicly accessible Internet
site with respect to a company registered under the Securities Exchange
Act of 1934 must be identified by that person's actual name."
The requirement that persons identify themselves when communicating on
the Internet regarding the stock of publicly traded companies has strong
merit. Anonymous statements on the Internet regarding the stock of
publicly traded companies are a potent means for manipulating the market
and committing securities fraud. They should be stopped. Simple
disclosure of the source is the answer.
Compliance with Constitutional Standards
Prohibiting anonymous communications in favor of identifiable
communications on the Internet with respect to securities of publicly
traded companies is consistent with the treatment of material sent over
fax machines and disclosed by telemarketers.
Fax machines are in many ways analogous to e-mail and Internet
communications, and federal law has recognized the dangers presented by
anonymous communications by fax machines. Accordingly, federal law
requires persons to disclose their identity when sending a fax. The
relevant statute (47 U.S.C. § 227(d)(1)(B)), provides that it is unlawful
for any person in the United States:
"To use a computer or other electronic device to send any message via
telephone facsimile machine unless such person clearly marks, in a
margin at the top or bottom of each transmitted page of the message or
on the first page of the transmission, the date and time it is sent and
an identification of the business, other entity, or individual sending
the message and the telephone number of the sending machine or of such
business, other entity, or individual."
This statute not only applies to communications sent by fax machines, it
also applies to communications sent from a computer to a fax machine.
Sending messages from computer to computer poses the same types of
anonymous communication dangers as sending a message from a computer to
a fax machine, or from a fax machine to a fax machine.
Requiring persons to identify themselves only when transmitting
statements concerning public companies to public Internet sites is much
more limited than the requirement, already part of federal law as quoted
above, that the sender of all facsimiles be identified.
Federal regulations also prohibit telemarketers from placing telephone
calls without first identifying themselves. The relevant regulation (16
C.F.R. 310.4(d)(l)), provides that:
"It is an abusive telemarketing act or practice and a violation of this
Rule for a telemarketer in an outbound telephone call to fail to
disclose promptly and in a clear and conspicuous manner to the person
receiving the call ... the identity of the seller."
This telemarketer regulation is similar to the proposed regulation of
anonymous Internet communications regarding public companies in two
respects. First, both regulate anonymous commercial speech. Second,
both are attempts to stop deceptive, misleading and manipulative
practices.
The full disclosure proposal also complies with First Amendment
standards based on Supreme Court guidance obtained from Buckley v.
Valeo, 424 U.S. 1, 96 S. Ct. 612 (1976). In Buckley, the Supreme Court
held that the First Amendment does protect certain rights to make
political contributions and expenditures, but that it does not violate
the First Amendment to require persons contributing more than a certain
amount of money to political campaigns to provide his or her real name.
The Court stated (424 U.S. at 66-68) that the requirement was justified
by three policies:
· "First, disclosure provides the electorate with information 'as to
where political campaign money comes from and how it is spent by the
candidate' in order to aid the voters in evaluating those who seek
federal office."
· "Second, disclosure requirements deter actual corruption and avoid the
appearance of corruption by exposing large contributions and
expenditures to the light of publicity . And, as we recognized in
Burroughs v. United States, 290 U.S., at 548, 54 S. Ct., at 291,
Congress could reasonably conclude that full disclosure during an
election campaign tends 'to prevent the corrupt use of money to affect
elections.' In enacting these requirements it may have been mindful of
Mr. Justice Brandeis' advice:
'Publicity is justly commended as a remedy for social and industrial
diseases. Sunlight is said to be the best of disinfectants; electric
light the most efficient policeman.'"
· "Third, and not least significant, recordkeeping, reporting, and
disclosure requirements are an essential means of gathering the data
necessary to detect violations of the contribution limitations described
above."
All three of the policy considerations that caused the Court to uphold
the disclosure requirements in Buckley apply with equal force to a
requirement that persons communicating statements on Internet sites
regarding publicly traded companies disclose their names. First,
disclosing the names will help readers evaluate the comments, and the
sender's potential motives. Knowing a persons' name will help readers
evaluate whether the sender has a motive in trying to make the stock
move in one direction or another, and will help readers evaluate any
sender's claim to be employed by a company. Second, disclosing the
names will help prevent corruption of the financial system by
eliminating anonymity as an important means for manipulating the market
and committing securities fraud. Finally, disclosure will help to
detect violations of the securities laws. This factor is particularly
important given the speed with which the market moves now, and the
difficulties in tracing down and identifying violators after the fact.
Both the Commission and private parties have limited resources to devote
to identifying anonymous Internet communications. Engaging in
after-the-fact searches is not a feasible option. Just as in Buckley,
requiring identification up-front is the only viable way to deal with the
problem. It is also a simple way to deal with the problem.
The proposed full disclosure requirement, which only pertains to speech
regarding public companies, is consistent with McIntyre v. Ohio
Elections Comm'n, 514 U.S. 334, 115 S. Ct. 1511 (1995) (holding that a
statute that prohibited the distribution of anonymous political speech
violated the First Amendment) and ACLU of Georgia v. Miller, 977 F.
Supp. 1228 (N.D. Ga 1997) (holding that a statute making it a crime to
transmit e-mail or similar communications that falsely identified the
person or organization sending it was overbroad and violated the First
Amendment). The statute in McIntyre specifically regulated political
speech, while the statute in Miller was so overbroad that it encompassed
political speech. The suggested proposal regulates commercial speech --
more specifically, commercial speech regarding publicly traded
companies. According to the Supreme Court's holding in Central Hudson
Gas v. Public Service Commission, 447 U.S. 557, 563 (1980), commercial
speech is entitled to less protection under the Constitution than that
afforded political speech.
Conclusion
As technological advances continue to affect our capital markets in
ways never imagined just ten years ago, the Commission must continue to
protect investors by providing full disclosure with respect to
communications concerning public companies on the Internet. Anonymous
Internet communications will erode the "quality" of information available
to investors and increase market volatility. Therefore, the Commission
should expand the scope of proposed Regulation FD to prohibit the
communication of anonymous statements regarding public companies on
publicly accessible Internet sites.
Sincerely,
Terence P. Boyle
Author: "bruce brantley" at Internet
Date: 04/26/2000 11:52 AM
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TO: RULE-COMMENTS at 03SEC
Subject: proposed regulation FD: file# S7-31-99
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To whom it may concern:
The advantages that the big brokerage houses have over the small investor are so
huge already that I am curious why the above noted regulation is even open for
debate. Please do what is right and help the small individual investor.
Knowledge is power and anything that empowers the little guy can't be bad. Help
people learn to help themselves.
Thanks for your consideration,
Bruce K. Brantley
Author: at Internet
Date: 04/26/2000 11:49 AM
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TO: RULE-COMMENTS at 03SEC
Subject: PROPOSED REGULATION FD: FILE NO. S7-31-99
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What is the difference between an investor and a Wall Street analysis?
Really, there is none. Both have the same ultimate goal. That goal is to
make as much money as possible. However, the analysis probably has a higher
stake in the market than does the average investor, but the goal is the same.
Therefore, let's play fair. Why should the analysis be given important
information prior to that information being given out to the average
investor? This action is just not right. The information needs to be
announced simultaneously. That is the only fair way, and I am glad to see
that the SEC has finally acknowledged this fact.
James Cain
average trader
Author: "Walter Carpus" at Internet
Date: 04/26/2000 11:22 AM
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TO: RULE-COMMENTS at 03SEC
Subject: "Proposed Regulation FD File No. S7-31-99"
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Gentlemen, please consider what is good for the goose is good for the
gander! Should ANYONE be allowed, in a democratic society, more
information than any other? I think not. You, and you alone will continue
to make the decisions that are good for "ALL" the people and not just a
select few. Your country depends on you for intelligent guidence! Thank
You
Author: at Internet
Date: 04/26/2000 1:04 PM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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It is in my and every other investors best interest.
-D. Luke Castlen
Author: "J. Harold Chapman" at Internet
Date: 04/26/2000 1:07 PM
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TO: RULE-COMMENTS at 03SEC
Subject: "Proposed Regulation FD: File No. S7-31-99"
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By all means,
J. Harold Chapman
121 Kaywood Dr.
Sanford, FL 32771
Author: at Internet
Date: 04/26/2000 12:00 PM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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Help Stop Selective Disclosure
Att. Dave Cortes
Small investor in Ameritrade, Pall Corp, E-trade, Audible Inc.
Author: "Everitt; William" at Internet
Date: 04/26/2000 12:51 PM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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I've been following the debate at the Motley Fool website in regards to
allowing
individual investors access to information which is currently privileged to
Wall
Street only. I am in favor of the rule allowing such access. As in
individual investor,
I deserve that information just as much as the next person or brokerage. If
Wall
Street feels the general public is not smart enough to comprehend the facts,
then they
have nothing to worry about. It's important to the future of individual
investing to
have a level playing field with Wall Street.
Sincerely,
William Everitt
Individual Investor
Author: "Kenton Flaig" at Internet
Date: 04/26/2000 6:35 AM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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Dear Sirs:
I had to laugh while reading the SIA's comments on this, the reply that
basically says that individual investors are too stupid to know what to do
with the information and thus need to be protected from themselves. Ya,
right. The SIA wants to protect us. How come I just have this feeling that
the SIA just wants to get first jump on the news so that they can get in or
get out of a stock sooner than the little guy?
And, while I was laughing at the nerve of the SIA trying to put the "we just
want to protect the little guy" spin on their reply I am not laughing at the
thought that you, the SEC, just might wimp out and let them get away with
it. Your decision on regulation changes like this, which attempt to make the
process fair, will show your true colors.
Kenton Flaig
1013 Ironwood Dr.
Las Vegas, NV 89108
702 648-0931
603 794-6469 fax
Author: "Evelyn M. Foster" at Internet
Date: 04/26/2000 9:57 AM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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I just read a summary of the comments by the SIA about not disclosing
company information to the
public, but only a select group of analysts. I'm appalled!
I am an individual investor and my livelihood is based on my investing. Why
should I continue to
play this game when I do not have the playbook. After reading the SIA's
comments I felt like I was
in a football game where only the quarterback and the head defensive player
know the rules. The
rest of us have to perform equally well, but without knowing the plays.
This is craziness.
If I can as an investor withstand a 500 point drop in the market and still
maintain a level head about
reading market indicators and general economic trends then you can be sure I
can handle
important information about individual companies.
I find that most analysts have individual agendas and they are not the
bearers of impartial information.
Why should they get privileged information and summarize it to their
advantage versus my making
my own decision about the data.
As an investor, I need and want full information regardless of what it is so
that my investments
are based on full disclosure. Let's stop the lawsuits by shareholders and
give investors a level
playing field.
Thank you for your attention.
Evelyn Foster
Author: Robert Furnback at Internet
Date: 04/26/2000 7:44 AM
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TO: RULE-COMMENTS at 03SEC
Subject: proposed Regulation FD:S7-31-99
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Proposed Regulation FD:File No S7-31-99 should not be inacted because it
will increase the possibilities for insider trading and make regulation
harder. If only a few people are informed of all of the facts regarding an
equity position only they will be able to make econimic choices and
profits. We need more not less information from the leaders of bussiness.
The direction I hope you will lead use in is towards more open markets with
more knowledgeable investors.
Author: at Internet
Date: 04/26/2000 11:49 AM
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TO: RULE-COMMENTS at 03SEC
Subject: Regulation FD: File No. s7-31-99
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Jody Garwood
Tulsa, OK
Full disclosure must be made available to the public regarding all aspects of
securities trading on the open market.
Author: William Heiser at Internet
Date: 04/26/2000 10:37 AM
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TO: RULE-COMMENTS at 03SEC
Subject: "Proposed Regulation FD: File No. S7-31-99"
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Dear SEC -
As an individual investor in public companies, I support this
proposed regulation. Why should analysts who may not even have a
financial stake in a company that I own have access to
information before I do?
Thank you for considering this new regulation.
Sincerely,
William Heiser
Author: "Jay Horne" at Internet
Date: 04/26/2000 12:32 PM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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As an American I feel an abiding responsibility for my own self-interest. I
am therefore fully behind the proposed new regulation regarding public
disclosure.
Cheers,
Jay Horne
Author: Crickett Hutchinson at Internet
Date: 04/26/2000 9:01 AM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD:File No. S7-31-99
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Level the playing field!!!
Crickett Hutchinson
Author: "Jeck; Steven L" at Internet
Date: 04/26/2000 10:45 AM
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Subject: Proposed Regulation FD: File No. S7-31-99
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I want to register my support for proposed regulation FD: File No. S7-31-99
intended to stop selective disclosure of financial information. In any
other context, the current common practice of selective disclosure would be
considered a flaw tantamount to "insider trading".
My views are my own and not part of any corporate policy or opinion.
Sincerely,
Steven Jeck
106 Virginia Drive
Chapel Hill, NC 27514
Author: "David W. Jimenez" at Internet
Date: 04/26/2000 9:40 AM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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Please stop selective disclosure to Wall Street insiders. The public must
have the same information in the same time frame to prevent share price
manipulation.
David Jimenez
Wright Williams & Kelly
39 California Avenue, Suite 203
Pleasanton, CA 94566
925-485-5711
925-485-3791 fax
www.wwk.com
Author: herbert katz at Internet
Date: 04/26/2000 8:10 AM
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TO: RULE-COMMENTS at 03SEC
Subject: prop reg FD S7-31-99
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I AM AN ACTIVE INVESTOR. THE THOUGHT THAT I NEED AN
ANALYST TO INTERPRET INFO IS JUST DOWNRIGHT FOOLISH.
THESE KIDS DONT HAVE THE TIME OR THE EXPERTISE THAT
MAY STOCKHOLDERS AND INVESTORS HAVE, INCLUDING
EX-ANALYSTS! ITS SILLY THAT CRAMER AND HIS ILK CAN
LISTEN IN ON PHONE BRIEFINGS AHEAD OF THE CROWD AND
SWITCH POSITIONS AND SCREW THE PUBLIC. WITNESS HIS
DISCLOSURE THAT HE WENT FROM LONG MSFT TO SHORT IN THE
BLINK OF AN EYE WHILE MOST INVESTORS DIDNT HAVE THIS
INFORMATION. WHY CANT THE PUBLIC LISTEN IN ON ALL THIS
INFORMATION. THE FACT THAT THIS IS EVEN UP FOR
DISCUSSION IS A THROWBACK. FULL DISCLOSURE NOW...
THANKS ANON.
Author: "Keenan; Rich" at Internet
Date: 04/26/2000 8:14 AM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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As a stockholder (read: OWNER) of several companies, I am writing to ensure
that I can obtain the same information on MY companies as Wall Street
analysts get. The fact that this even has to be an issue amazes me, since I
am a partial OWNER of these companies, and information is currently being
kept from me.
Thank you,
Rich Keenan
Author: Kirk Kinder at Internet
Date: 04/26/2000 10:20 AM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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I just wanted to write and say I agree that all
parties should be privy to company information when it
is first released, not just Wall Street analysts. I
am a personal investor who makes my own decisions on
my investments with no help from Wall Stree pros. So
their major argument that they are "protecting" the
public by gaining this information before the public
is not true in my case.
In fact, I would say the "protecting" of the public is
the last thing on their agenda. Controlling this
information allows them to alter their ratings and
mutual fund holdings thereby creating more wealth for
them via several different avenues.
I own only a handful of companies, but I follow them
closely as they represent my future. Generally, I am
a buy and hold investor, but I should still be able to
receive company information the same time as every
party...it is only fair and just.
Thank you,
Kirk Kinder
Author: "Bob Lay" at Internet
Date: 04/26/2000 12:27 PM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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It's way past time to stop the information embargo that permits Wall Street
professionals an unwarranted advantage over individual investors when
information is allowed to be disseminated to the professionals in advance of
release to the general public.
In spite of the professionals protestations that it is important that they be
allowed to fully digest this information and then re-release it to "the
unwashed" it is clearly inappropriate that they be given an unfair advantage, as
they have been granted to the present.
It seems to me an apt parallel is the fact that it is illegal for company
insiders to act on information prior to its public release yet investment
professionals try to make a case that it is in the public interest for them to
be able to do so, to the financial detriment of individual investors.
Please allow us individuals to learn the same information concurrently with the
Wall Street professionals. Their interpretation of the corporate information
release(s) can still be given the public, but at least the public would have the
same information timely -- which I think is patently fair and appropriate.
Thanks for your consideration.
Robert H. Lay, Independent Investor
1005 Canterbury Court
Davenport, IA
Author: Roger Lucas at Internet
Date: 04/26/2000 7:08 PM
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Receipt Requested
TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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Selective Disclosure is not the American way. All investors are created equally.
All investors, rather individual or institutional, should have the same
information at the same time. Please rule your conscience. You know the right
thing to do.
Roger Lucas
rjl1@yahoo.com
540.653.5654
Author: "Jerry Lucas" at Internet
Date: 04/26/2000 1:39 PM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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I feel analysts perform repetitive, unnecessary, and duplicitous functions in
the U.S. capital markets. These ANALysts do not need better information than the
participants in the market. In addition, millions of investors do peruse
prospectuses and periodic reports which is why the analysts perform a duplicate
task. The claim that analysts make the markets less volatile is somewhat true,
but volatility can be reduced further still by information be spread to the
masses real time, rather that conducted through the analysts first.
It is equally ludicrous to state that analysts spend much of their time
ferreting out negative information about companies, as much as it is to say I
need analysts' help picking stocks to beat the S&P500 index.
After all, Wall Street is arguing that maintaining the current system is not
just in its own interests, but in yours as well, which is clearly a lie. Wall
Street is only interested in it's own pockets, and could care less about mine.
Wall Street is clearly afraid of losing the monopolistic grip on the markets it
has enjoyed since birth. Viva the individual investor and my he or she reign
supreme with equal and timely access to information.
Author: Pat & Jude Maher at Internet
Date: 04/26/2000 11:29 AM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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A long overdue proposal. Excellant work. Implement it.
Thomas Maher
Author: "SCOTT MCGOWAN; FIRST OPTIONS/SCMS" at Internet
Date: 04/26/2000 11:16 AM
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Subject: Proposed RegulationFD:File No. S7-31-99
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I believe full disclosure is imperative to our free market system.
All information should be disclosed simultaneously to the public,press and any
interested party.
D. Scott McGowan
SCMS LLC
Chicago
Author: Amir Mian at Internet
Date: 04/26/2000 10:34 AM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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STOP SELECTIVE DISCLOSURE!!!!!!!!!!!!!!!!!!!!!!!!!!!
Amir Mian
Author: david michalek at Internet
Date: 04/26/2000 12:13 PM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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Dear Sirs
I strongly support Proposed Regulation FD: File no. S7-31-99.
I am a private investor.
I would like the playing field to be leveled.
Sincerely
David Michalek
1195 Morning Glory Lane
Bartlett, Illinois 60103
Author: "Carter Newbold" at Internet
Date: 04/26/2000 11:53 AM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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As an analyst with an institutional money management firm, I would like to add
my support to the FD proposal.
While the prevailing system might be deemed advantageous to institutional
investors, I believe that it is rife with conflicts of interest and favoritism.
The resulting asymmetries seem to increase price volatility and foster serious
skepticism about the fairness of capital markets. These factors would seem to
push capital costs above their optimal levels.
Arguments by the SIA that sell side analysts provide a valuable filtering
apparatus between companies and investors seem illogical. Sell side analysts
are bound by none of the constraints that characterize the "filtering" role
played by media sources in other parts of society. In fact, they typically have
considerable financial incentives that are wholly unrelated to the success of
the purchase and sale recommendations that they make.
If companies communicate equitably to all shareholders, then investment
decisions will be driven more by substance than speed, insight rather than
privelege. Professional analysts would once again earn their compensation not
by having the best seat in the house, but by having the best ideas in the house.
The nitty gritty skills of interviewing vendors, customers and competitors,
assessing the cash flows of the business, and gauging the likelihood that a
company can sustain a return above its cost of capital would be primary, not
secondary in the analyst community.
Carter Newbold
Senior Vice President
Rutabaga Capital Management
Boston, MA
Author: Rod at Internet
Date: 04/26/2000 9:35 AM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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As an educated and well informed individual investor I feel this
proposed regulation needs to be passed so myself and others like me, can
continue to invest wisely.
Thank you
Rod O'Brien
Author: "Petersen; Rock" at Internet
Date: 04/26/2000 10:16 AM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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As an investor myself, and with the other individuals with
whom I consider friends and fellow investors, give us the above noted
regulation so as to level the playing field. It behooves the public at
large to have the information that is necessary to make informed decisions.
Do not allow the current system of limited distribution of information to
remain.
Best Regards,
Rock Petersen
******************
W. R. Petersen, CPA
Controller
Furuno USA, Inc.
4400 NW Pacific Rim Blvd.
Camas, WA 98607-9408
Telephone: 360-834-9300
Facsimile: 360-834-9400
Internet: www.Furuno.com
E-Mail: rock@furuno.com
******************
Author: Joe at Internet
Date: 04/26/2000 10:44 AM
Normal
TO: RULE-COMMENTS at 03SEC
Subject: "Proposed Regulation FD: File No. S7-31-99"
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As an investor, I am very much in favor of open and fair disclosure and
very much opposed to selective disclosure.
Joe Phernetton
Cedar Rapids, IA
Author: "Michael S. Pomorski" at Internet
Date: 04/26/2000 12:40 PM
Normal
TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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To whom it may concern:
The fact that companies are able to tell analysts vital information
while not informing the shareholders, who are in fact part owners of the
company, of such information bothers me to no end. It is not only unfair,
it is also a violation of the principles of fairness and equality our
society and nation are based upon.
If the information is deemed "sensitive" by the company, how can
they justify telling scores of analysts who may or may not be shareholders
while keeping this information from those who in fact own the company and
have as much to gain or lose by knowing this information as the directors
themselves? By giving analysts selective disclosure, the individual
investor becomes dependant on them, thus allowing the analyst to charge
the investor whatever they want in exchange for information regarding
their own company! This cannot continue.
In this day and age of high-tech internet access and unprecedented levels
of computer access this information should be made available to all so
they can come to their own conclusions about the actions and prospects
companies they partially own or wish to invest in. This bill must pass!
Sincerely,
Michael S. Pomorski
Author: Larry Prokop at Internet
Date: 04/26/2000 10:09 AM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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Dear SEC,
I support the proposed regulation FD: File No. S7-31-99. I think it is
in the best interests of individual shareholders and the stock market in
general.
I hope you will enact the proposed regulation.
Sincerely,
Larry Prokop
Rochester, MN
Author: Robert Raptis at Internet
Date: 04/26/2000 11:06 AM
Normal
TO: RULE-COMMENTS at 03SEC
Subject: Proposed Reg. FD:File No.S7-31-99
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Fair Disclosure: We the people do understand what Fair and Ethical means
and be aware we would appreciate more fair treatment. Please empower
the the new proposed Fair Disclosure Rule. The market has changed and
can no longer be totally dominated by the powerfull insiders.
Robert Raptis, small investor but one of MANY
finder@acclink.com
Author: "Richter; David" at Internet
Date: 04/26/2000 8:09 AM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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I applaud the SEC's proposed fair disclosure regulation. Professional market
analysts have no more right to a company's prospects than its owners, the
shareholders. Please add my voice to the many in favor of this common-sense
proposal.
Dave Richter
fidricht@dof.ca.gov
(916) 445-0211 x.2857
Author: at Internet
Date: 04/26/2000 1:04 PM
Normal
TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD; File No. S7-31-99
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please pass the proposed regulation FD; File No. S7-31-99. Thank you.
Angel Rodriguez
5581 Joe Wilson Rd
Midlothian, Tx 76065
Author: at Internet
Date: 04/26/2000 7:18 PM
Normal
TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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Hello,
I highly recommend this proposal:
Proposed Regulation FD: File No. S7-31-99
Best Regards,
Vladimir Shcherbina
IBM Staff Member
Tel: 972-4-8296446
Fax: 972-4-8550070
053-790467
shcherb@il.ibm.com
IBM Haifa Research Lab, Matam, Haifa 31905, Israel
Author: Eric Smith at Internet
Date: 04/26/2000 11:04 AM
Normal
TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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I am appalled at the SIA's opinion that I, as an individual investor, can't
make my own investment decisions. In a documentary on the stock market
shown on CNBC, they showed how much of a mess things were when companies
didn't have to give out information. Giving it to just the lucky few is
just as bad. The analysts can't possibly be objective with the information,
considering the fact that they handle underwriting for the companies that
they "analyze".
The time for full disclosure is here. Please pass this regulation as soon
as possible.
Sincerely,
Eric Smith
Individual Investor
--
Eric Smith
eric@northcomp.com
Author: "Warren Sprague" at Internet
Date: 04/26/2000 9:42 AM
Normal
TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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This regulation should have begun years ago.
Author: Ken Strong at Internet
Date: 04/26/2000 11:37 AM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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I strongly feel that this proposed regulation should be enacted. If a
company is publicly traded, then all information about it should be evenly
and fairly distributed to the public; no one should have preferential access
to knowledge of the company's workings. This is common sense, or should be;
it's amazing that it's not the law already. Those stock analysts who are
really performing services of value to their customers will not be adversely
affected by this regulation.
Better that information be allowed to flow freely, to allow investors of all
sizes and levels to make their own informed decisions about what to do with
their hard-earned money.
Kenneth Strong
Author: Paul Takeuchi at Internet
Date: 04/26/2000 1:34 PM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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I heartily support this regulation. Capitalism should support the
democratic way of free and totally accessible information flow. We pay
brokers commissions and spreads; timely information should not come at a
cost as well.
--
Paul Takeuchi
Brooklyn, NY 11217
Author: "Luke Threinen" at Internet
Date: 04/26/2000 12:14 PM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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In browsing through the SIA's arguments in opposition to this proposal, I find
it difficult to reach any conclusion other than that the SIA's primary aim is
the preservation of the financial security of the companies for which the
analysts of which it speaks work. The main (substantial) argument by the SIA is
that the "analysts [together with the media] perform a necessary...function" in
the marketplace. Also, they state that "(t)he alternative model of millions of
individual investors and potential investors poring over prospectuses and
periodic reports is highly theoretical and out of sync with the real world".
However, this argument does nothing more to oppose this proposal than possibly
leave an uneasy feeling in the reader. The reader may agree with what is said
and, knowing that the SIA opposes this proposal, feel that they too ought to
oppose it. The fact is that even if both of these assertions are true, they
have little bearing on this proposal. The proposal as I understand it would not
prohibit analysts and media from performing the same job they do now, nor would
it force these 'millions of individual investors' to pore over all available
information by being cut off from the services of the aforementioned analysts
and media. What it would do, simply, is ALLOW these 'millions' to perform their
own analysis should they elect to do so without paying the costs inherent in
having their analysis done by others. I hardly find this to be a dangerous
proposition; in fact, it seems only fair.
Thank you for your consideration.
Luke Threinen
Minneapolis, MN
Author: "Steve U" at Internet
Date: 04/26/2000 1:08 PM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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To whom it may cocern,
I would like to voice my opinion on the change in rules (Proposed Regulation
FD: File No. S7-31-99) that would make companies give the public the same
information that is now given exclusively to analyst or the media. This
abuse of inside information should not be allowed. The public should have
the right to make decisions based on the primary information and not only
after it is released through select securities analysts or the media. This
does not in any way preclude the future role of analysts for those who choose
to use them. However, it avoids complete reliance on the subjective opinion
of the media and analysts as sources of important financial information.
Yours truly,
Stephen Ullrich
4713 Rams Head Court
Rockville, MD 20853
Author: at Internet
Date: 04/26/2000 1:02 PM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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As an individual investor who does not rely on professional analysts to make
investment decisions, I strongly urge you to approve Regulation FD. It is the
right thing to do in the interest of fairness to all of the investing public.
George E. Ulrich
4472 Deer Trail
Sarasota, FL 34238
Author: Jean-Paul Voilleque at Internet
Date: 04/26/2000 8:50 AM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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The SIA's recent filing arguing against Regulation FD is out
of touch with the status of the individual investor in
today's market. The more information is readily available to
individuals the greater the efficiency. Transparency and
full disclosure help to prevent fraudulent speculation of
the "hot tip" variety. They also make public discussion of
stocks in Internet forums self policing.
The idea that the average investor cannot understand or
would not sufficiently scrutinize financial data is
insulting. The SIA makes this claim not on the basis of any
actual fact; rather, it makes the claim because the network
of power that currently controls financial information is a
source of enormous wealth for those fortunate enough to be a
part of it. It is an access gap that prevents individual
investors from making informed decisions, not a lack of math
skills. The SIA seems to think that this closed circuit of
information is a good thing, because analysts can then
pursue their inquiries in private, thus (somehow) increasing
the quality of their reporting: "Due to fierce competition
among analysts to obtain the best information, they will be
reluctant to ask questions in an open session that tip off
their competitors as to the direction of their thinking or
information that they think would be meaningful. If the
questions cannot be asked in private, they may not be asked
at all. Is that good for the market?"
Two questions back at this tottering structure should be
enough to break it.
1. If an analyst thinks a piece of information is
meaningful, does the SIA honestly believe that others will
not think it is meaningful? The fact that an analyst must
work hard to develop credible opinions should come as no
surprise. We all want to have a defensible position with
regard to our recommendations. We all need data to do that.
Certainly it's better to be able to form your own
conclusions. This speaks again to the unjustified lack of
faith in the individual investor.
2. If an analyst will not ask a question in public, would he
mind awfully if the public asked the question for him? The
entire crux of the argument from the SIA rests on the
assumption that the analyst still holds a position of
privilege in terms of company information. Remove the barriers
to public access and the supposed "competitive" marketplace of
inquiry and analysis becomes actually competitive.
I defy you to find a single thing in the SIA filing that
makes a shred of sense. This rhetorical posturing is nothing
more than an old-boy nudge in the ribs - "You're not really
going to spoil our little game, are you? We're PALS!" Full
disclosure promises nothing but good things for the market
and for the investors who are increasingly building a
portfolio via informed, independent assessment of individual
companies. The SIA and the interests it represents are
desperate to stop that because it endangers their own brand
of investing. By supporting full disclosure the SEC would
expand consumer choice and allow a level playing field for
those who seek to take their financial future into their own
hands. That, in case the SIA has forgotten, is what is known
as "capitalism."
--
J-P Voilleque | LookSmart Editorial
(415) 348-7963 | jpv@looksmart.net
"This news is old enough, yet it is
every day's news." -Measure for Measure
Author: Billy Wright at Internet
Date: 04/26/2000 10:40 AM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No S7-31-99
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It seems to me that the issue should be to whom the first disclosure
is made: 1. The investing public, or 2. Analysts
Analysts have a business to promote - while investors have their
money in the company. If the analysts get clarifications of the
public disclosure later, thats fine but they certainly should not be
privileged to information before the investors in the company.
A private pieve of mine is that economists as a profession now are
given a podium to spout their guesses and usually do it in such a
positive manner that it does move the market! And they, or anyone
else, can have no inkling of the immediate direction of the market.
Yet they move the market artificially.
It also grieves me that one man, in the form of Alan Greenspan, can
sit up there and decide that the 5% of citizens without jobs are too
few and therefore inflationary and heaven forbid someone is going to
get a raise because the labor market is tight. How ridiculous. We
get the pain before the problem and then get it again after the
problem hits! Again, how ridiculous.
Sorry, maybe talking to the wrong organization, but maybe not?
Billy J. Wright
bjw126@flash.net
Albuquerque, New Mexico 87111-4167
Author: at Internet
Date: 04/26/2000 11:44 AM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File # S7-31-99
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Sirs: We respectfully disagree with the comments of the SIA regarding the
proposed rule S7-31-99. We believe that it is in the best interests of the
public to have access to all information, and that this information not be
filtered through the analysts. It is our opinion that information passed
through the analysts inevitably is subject to the "spin" of the analysts
(whether intentionally or unintentionally). Please make all information
regarding publicly traded companies available to the public, as it should be.
Sincerely yours, Robert J. Yager and Donna Yager (individual investors)
Author: Ghassan Yammine at Internet
Date: 04/26/2000 10:03 AM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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Dear SEC,
I support the subject proposed regulation. In my opinion, the current system
gives a select group of entities an unfair advantage - over the rest of the
investment community - because it provides them with inside knowledge of
publicly traded companies. This regulation will level the playing field by
ensuring that no one is entitled to special privileges relating to
disclosure.
Sincerely,
Ghassan Yammine
Georgetown, Texas
Author: "Zongker; Brian" at Internet
Date: 04/26/2000 12:09 PM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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Please insure that the selective disclosure rules be removed and allow the
playing field to be leveled for the small investor.
Thanks,
Brian Zongker
http://www.sec.gov/rules/0426b04.htm
