SEC's fair disclosure regulation puts pressure on tech companies

The US Securities and Exchange Commission''s fair disclosure regulation may well mean the end of investor conferences.

I hear from an excellent source that CSFB’s huge technology conference in Phoenix this year was not the brokerage dream that it was in 1999. There is a simple reason for this: it is the US Securities and Exchange Commission's (SEC’s) new regulation FD (fair disclosure).

It appears that the various tech companies presenting to investors were hamstrung by the new regulation.

At last year’s conference, the various internet and tech companies were able to give fund managers some fairly strong ideas of where their various companies were going. Scenes of investors rushing out of the auditorium to place a buy order, were common. Of course, the CSFB brokers were happy to take their orders.

This year those scenes were absent. Apparently, according to my source, the companies were “basically reading out aloud the information on their web sites”. That’s because if they’d said anything ‘new’ they’d have then had to send out a simultaneous press release, so as to inform all investors simultaneously – as required by the new SEC regulation.

Is this the death of the investor conference?

Here in Asia, CSFB holds a massive conference just before the Hong Kong Sevens and CLSA holds a big conference too. Luckily, most Asian companies don’t have to comply with SEC regulations and can therefore still make some racy remarks. But for those companies listed on the NYSE or NASDAQ, investors can expect some fairly pointless presentations telling them no more than they already know.