The Securities and Exchange Commission voted to prevent companies from releasing market-sensitive information to selected Wall Street analysts before making that information public. Last week’s vote comes close to a year after Abercrombie & Fitch, the retailer and direct marketer, is alleged to have selectively disclose it would not make its quarterly expected earnings.
The measure should “bring all investors, regardless of the size of their holdings, into the information loop — exactly where they belong,” said Arthur Levitt, the SEC’s chair.
The new rules mean that a company that wants to tell some Wall Street analysts that it may not meet an earnings forecast, must post the information in a press release or regulatory filing at the same time.
Abercrombie & Fitch selectively disclosed such information last October, which led to a sell off of company stock. In December, the SEC launched a formal investigation into the matter. Abercrombie & Fitch has yet to comment further on the matter.
Network
