Investor Relations Compliance Attorney
Investor Relations Compliance: Regulation FD, Press Releases, and Public Communications
Investor relations activities create SEC compliance obligations that many issuers underestimate. Regulation FD violations, misleading press releases, and inconsistent public communications are enforcement triggers. Securities counsel ensures that IR activities comply with disclosure rules.
Regulation FD Compliance
Regulation FD requires that when a public company discloses material nonpublic information to certain enumerated persons, including analysts and institutional investors, it must simultaneously disclose that information to the public through a Form 8-K filing, press release, or other method of broad public dissemination. The regulation is designed to prevent selective disclosure that gives certain market participants an informational advantage. Securities counsel advises on what constitutes material nonpublic information, establishes procedures for investor communications, and ensures that selective disclosure is identified and corrected promptly.
Press Release and Earnings Guidance Review
Press releases containing financial information, earnings guidance, or material corporate developments should be reviewed by securities counsel before release. The antifraud provisions apply to all public statements by public companies, regardless of whether they are filed with the SEC. Forward-looking statements in press releases must comply with the safe harbor provisions of the Private Securities Litigation Reform Act, which requires meaningful cautionary language and identification of the assumptions underlying projections. Generic cautionary language does not satisfy the safe harbor requirements.
IR Firm Oversight
Many public companies engage investor relations firms to manage shareholder communications, analyst outreach, and market awareness campaigns. The actions of these firms are attributed to the company for securities law purposes. Securities counsel reviews IR firm engagement agreements to ensure they prohibit conduct that could constitute market manipulation, require compliance with Regulation FD, and establish clear approval processes for all public communications. The company remains liable for the statements and actions of its IR firm regardless of whether management specifically authorized the conduct.
Frequently Asked Questions
What is Regulation FD?
Regulation FD (Fair Disclosure) prohibits public companies from selectively disclosing material nonpublic information to analysts, institutional investors, or other market professionals without simultaneously making that information available to the public. Violations can result in SEC enforcement action against both the company and the individuals involved.
Can social media posts violate securities laws?
Yes. Social media posts by company officers or authorized representatives can constitute public disclosure for Regulation FD purposes and can create liability under the antifraud provisions if they contain material misstatements. The SEC has brought enforcement actions based on social media posts that contained forward-looking statements unsupported by reasonable basis.
What role should securities counsel play in IR?
Securities counsel should review press releases containing material information, advise on Regulation FD compliance, review IR firm engagement agreements, establish social media disclosure policies, advise on earnings guidance practices, and ensure that all public communications are consistent with SEC filings.
Questions about your specific situation?
Frederick M. Lehrer is a former SEC Enforcement Attorney with over 30 years of issuer-side securities law experience. All consultations are confidential. Flat-fee engagements.