Warren Buffett's Business Wire Whines About The SEC Letting Companies Post Information On Twitter
This week, the SEC said it was OK for companies to use social media platforms such as Facebook and Twitter to post financial reports so long as their investors are aware ahead of time that those will be outlets used to disseminate that info.
Business Wire, which puts out press releases, said in a release that the SEC's latest rule "poses a disservice to the investment community." [via @cr_harper]
Here's Business Wire's release:
While Business Wire is strongly supportive of social media tools, web posting on company web sites and blogging as supplemental platforms to communicate material information, Business Wire believes that a broadly disseminated news release -- distributed simultaneously and in real-time via a legitimate news wire service -- is still the most effective way to maximize investor outreach, and to inclusively serve the needs of all market participants.
In Business Wire's view, the SEC's latest guidance on the possible standalone use of social media platforms for regulatory compliance purposes poses a disservice to the investment community, threatening increased fragmentation of price-sensitive information, privacy concerns as users are required to register to gain access to material news, security risks that may adversely affect market stability, and the loss of simultaneity -- and the "level playing field" -- that is at the core of Regulation Fair Disclosure.
Business Wire, which makes extensive use of Twitter (with 61 industry Twitter feeds) and other social media tools as part of its multi-channel distribution platform, believes that social media should be leveraged as part of a broader news dissemination strategy. Reliance on social media alone, even in accordance with the SEC's newly issued guidelines, will likely negatively impact market fairness and investor awareness.
However, social media used in conjunction with Reg FD-compliant disclosure vehicles, including a broadly circulated news release, an 8-K filing, and an IR web site, is a valuable adjunct that extends the reach of investor communications. "Best Practices" dictate that investor relations professionals utilize the full ensemble of communications tools at their disposal.
"Protecting our clients' sensitive information is at the core of what we do, and we'll continue to do that in the most secure and innovative way possible," said Cathy Baron Tamraz, Business Wire's chairwoman and CEO. "Social media can be a valuable part of the investor relations ecosystem, but it should not be the core. Social media has been an integral part of our distribution platform for many years, and we also hold two social media patents. However, we are wary of unintended consequences by limiting access to a single site that doesn't have the security, reliability, or interface to reliably serve the entire investment community."
Business Wire prides itself on its patented internet news delivery network that ensure simultaneous, real-time distribution of material news to all network market participants worldwide. As the world's leading regulatory compliance service -- satisfying disclosure in 14 markets throughout North America and Europe -- Business Wire is subject to rigorous independent audits of its network security, technical systems and organizational infrastructure, and editorial procedures, to validate that it meets the stringent criteria of securities regulators, including the FCA in the UK, the AMF in France and the TMX in Canada.
Business Wire also provides a complete audit trail that provides publicly listed companies with priceless "peace of mind" in the event of a regulatory investigation.
As the industry's technology leader with five patents -- including "NX," the news delivery system that revolutionized the information industry when it was introduced in 2003 -- Business Wire is a strong proponent of harnessing new communications solutions. Business Wire remains a firm believer in taking a holistic approach to news distribution and investor relations, using its dynamic Internet-based platform as the backbone of its worldwide network, and continually bolstering its reach by adapting emerging technologies for its clients' constantly changing needs.