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The New Age of Financial Disclosure is Upon Us
August 07, 2008

I noted with pride in an August 2007 post the fact that several members of my team worked with Sun Microsystems to facilitate the innovative disclosure of its quarterly earnings results. Sun released those results via its Web site and RSS feeds a short time prior to sending it over PR Newswire. Sun’s CEO Jonathan Schwartz had announced plans to do so in a blog entry posted the week prior.

The news wires had, to that point, been the only game in town. The wires represented a traditional, old school method of dissemination that, while in accordance with governing rules, didn’t truly meet the current needs of players in the financial market.

While, I still believe there is an important and complementary role for newswires, the tools of social media – blogs, RSS feeds and the like – represent a modern mechanism for the distribution of financial data in a fair and equitable manner, particularly when you consider the speed with which such information is received and acted upon. Schwartz declared Sun’s method of disclosure to be "a small, but exceptionally symbolic change."

Understandably, the wires reacted poorly to such symbolism; this poses a clear threat to their business model. At that time, many cautioned them to embrace this change, rather than fight it as it was clear that such changes were coming, with or without them.

And, on July 30, the SEC declared that companies can now leverage their Web site and blogs to meet public disclosure requirements under Regulation FD, which mandates the “full and fair disclosure of information by issuers.” Sun’s “symbolic change” has spurred a sea change. My hope is that our friends at wire services will embrace and help shape the future rather than trying to stave it off. The future isn’t en route – it has arrived.

Posted by Michael Kempner at August 7, 2008 12:58 PM