Material Disclosure Exclusively on Blogs? No!

It's always a good thing when a company pushes for greater transparency and timelier, more relevant communications. I empathize with Sun Microsystems CEO Jonathan Schwartz's contention in his letter to SEC Chairman Christopher Cox that material corporate disclosure on a personal blog should meet dissemination requirements. However, I believe granting such a request would inhibit fair disclosure -- in effect, compromising simultaneous dissemination to all investors.

I don't even see this as a grey area. How in the world would anyone but an informed investor know that information is out on a personal blog, unless the blog were marketed by an RSS feed to the same news sources as a news release or unless a recognized search engine recovery approach is promoted ... neither of which Schwartz is advocating? The personal blog alone should suffice, Schwartz says, instead of "an anachronistic press release or telephone conference call."

Experience has shown that even the most disciplined companies are tempted to give preference to friends in the market when they release material news. And as for the undisciplined companies -- well, why say more?

While I vote to continue simultaneous access, I do feel that blogs should be included as an optional disclosure channel as long as the other required channels have been employed.

Technorati Tags: material disclosure, fair disclosure