Comments on Proposed Rule:
Selective Disclosure and Insider Trading
Release Nos. 33-7787, 34-42259, IC-24209, File No. S7-31-99
Author: "B" at Internet
Date: 04/27/2000 10:52 PM
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TO: RULE-COMMENTS at 03SEC
Subject: "Proposed Regulation FD: File No. S7-31-99"
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The following paragraph summarizes my understanding of subject proposed
regulation. I support enactment of this regulation. I also support the rapid
implementation of Internet electronic securities trading on all U.S.
securities exchanges. Hopefully, this will expand to 7-day, 24-hour trading.
In addition, I support the rapid implementation of securities quotes in
cents, instead of in fractions.
Proposed Regulation FD (Fair Disclosure) would require that:
(1) whenever an issuer intentionally discloses material information, it does
so through public disclosure, not through selective disclosure; and
(2) whenever an issuer learns that it has made a non-intentional material
selective disclosure, the issuer make prompt public disclosure of that
information.
Under the proposal, a company could make the public disclosure through one
of several methods: (1) filing the information with the SEC; (2) issuing a
press release; or (3) providing public access (for example, by phone access
or over the Internet) to the conference call or meeting.
Sincerely,
Brent Duncan, CPA
Author: "G. Higa" at Internet
Date: 04/27/2000 11:49 PM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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Totally in favor of this proposal!
Gene Higa
Author: Sterling E Kress at Internet
Date: 04/27/2000 10:31 PM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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To Whom it may concern,
Here's another vote for a level playing field. Let us put an end to these
selective
disclosure practices. What you don't know can and usually will hurt you.
An
educated and informed investment decision begins with the facts, ALL OF
THEM,
be it good or bad. I do not need nor want an omniscient analyst to save
me from
myself! Thankyou for your time.
Sincerly,
Sterling Kress
Author: "Herbert Laflamme" at Internet
Date: 04/27/2000 10:09 PM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No S7-31-99
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Dear SEC,
As an individual investor who is actively pursuing new investment opportunities
by utilizing information readily available over the Internet, I wholeheartedly
request and recommend leveling the playing field to combat selective disclosure
of information useful to all investors that is being made available to selective
analysts and / or institutional investors. I thought all Americans support free
and open markets. Moreover, as the Internet means of investing attracts more
individual investors, additional tools and techniques will become available to
enable new opportunites not only to the growing numbers of new individual
investors, but also for publicly held companies themselves to pursue resources
that will fuel their respective enterprises. The operative enabling maxim and
objective here is "support free and open markets." Special interests and favored
groups have no place in a free and open market place. Either special interest
groups or companies that seek to restrain others' freedom ought to expect to be
denied privileges of access to those free markets. And individual investors like
myself must look to continued SEC leadership and stewardship in attaining that
objective - - please support a level playing field, safeguard free and open
markets and the benefits that brings to all parites.
Herb Laflamme
Author: keltyrcm at Internet
Date: 04/27/2000 10:50 PM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No.S7-31-99
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Dear Sir/Mam:
Egalitarian reform is needed in the stock market now. Please tighten
restrictions on selective disclosure which exclude or limit direct
public participation!
This market needs to be cleaned up and returned to the control of the
People!
Sincerely,
Raymond C. Madsen
Author: at Internet
Date: 04/27/2000 11:47 PM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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Dear Sirs:
Please allow all investors to have timely and equal access to information.
Education of the individual has always been a driving force in our great nation.
Robert M. Moreno
University of Washington
Author: "Stephen Radican" at Internet
Date: 04/27/2000 10:48 PM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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Selective Disclosure Must End. I back legislation to End the practice. Give
the small investor a level playing field.
Thank you.
Stephen R. Radican
100 Adirondack Dr.
E. Greenwich, RI 02818
Author: "Arnold Rammel" at Internet
Date: 04/27/2000 10:39 AM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD:File No. S7-31-99
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I am in favor of opening the playing field to all investors. Giving select
information to only large shareholders must be stopped. It should be given to
all shoreholders at the same time. Please change the rules so that I can get the
same information, at the same time that the large shareholders get.
Author: David Smith at Internet
Date: 04/27/2000 11:59 PM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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In regulating this industry and managing this highly respected agency,
please let the market apply its collective not selective intelligence.
Fair disclosure will put an end to the "legal" insider information
advantage that Wall Street has over the unaffiliated individual
investor.
The SEC has the intelligence and the power to correct this long since
outdated method of information dissemination.
Thank you for your consideration of this issue and my comment.
David F. Smith
Individual Investor
Author: Jim Voos at Internet
Date: 04/27/2000 10:54 PM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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I am in support of the proposed regulation, as it creates a fairer open
market.
Jim Voos
Author: Stan Ward at Internet
Date: 04/27/2000 10:23 PM
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TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
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April 27, 2000
Re: Proposed Regulation FD: File No. S7-31-99
I fully support proposed regulation FD, with one small caviat noted below.
Supporters of Selective Disclosure have universally been industry analysts at
firms that benefit from one-sided information flow. They have numerous
conflicts of interests with respect to their most commonly cited arguments:
1. By getting information first, their 'analysis' of a companies' prospects
has significantly increased value, i.e., as an individual investor, I am forced
to acquire the opinion of some professional analyst in order to get at the raw
facts, whether I wanted the opinion or not. This obviously supports the value
of the investment industry's analysis as product, regardless of whether their
'analysis' is shown to have any value to the market. Regardless, this
assignment of value belongs to the consumer, not the producer of the product.
2. Since most analysts are in the employ of investment houses that themselves
manage mutual funds and large private investment pools, they are inherently
competitors to my personal investment goals. If industry analysts have news
about a company even a few hours before the broader market does, mutual funds
and other large positions will have already been adjusted, with a subsequent
market value impact. Collectively, analyst' investment firms have therefore
profited at the expense of individual investors, another advantage that would
significantly diminish under Full Disclosure.
3. The argument that industry analyst' opinions make for a more stable and
efficient market is, in my opinion, questionable. Time and again, individual
investors have been shown to take a longer view and panic less during market
turbulence. The professionals whom we would be beholden to for advice, on the
other hand, tend to instigate instability by inciting concern over short term
events. A steady stream of glaring headlines and 'Buy/Hold/Sell'
recommendations issued by major analysts seems more geared toward generating
commissions than profits, while trying to instill fear, uncertainty and doubt
in the mind of the investor. I believe this causes more instability than it
prevents. These recommendations can also be blatantly self-serving if the
investment firm holds a position in the stock in question, which it nearly
always does either directly, or for key clients.
4. In spite of the wisdom available to the investment industry, the average
professionally managed fund portfolio turns over at a far higher rate than that
of the individual, who is more likely to be thinking his own long term self
interest (anywhere from a few years out to his retirement age), not this
quarter's mutual fund rankings. The well-documented failure of professional
mutual fund managers to beat market averages in spite of all their wisdom and
advantages calls into question the fundamental value of the analysis services
the industry would force on individual investors. How would the professional
investment industry do if the game wasn't rigged in their favor?
With respect to roadshows and other mechanisms for promoting IPOs and secondary
offerings, it seems to me that many of the 'protections' in place for
individual investors are really crutches for the underwriters. There is never
a case where ignorance is good for an investor, and restricting access to road
shows is no different than access to quarterly conference calls.
Purchasing an IPO at the offering price is in itself restricted to 'experienced
investors' (read: good customers of the underwriter), giving these customers a
nearly guaranteed gain over the first trades on the open market. 'Protecting'
the small investor by making him buy on the open market is really just adding
to his risk, because he doesn't get the protection of the discount available to
the underwriter's regular customers.
I do agree with some of the concerns raised by some industry experts about the
distinctions between intentional and accidental disclosures of information.
The key effect of Regulation FD should not be a series of petty fines and legal
expenses against company officers for legitimate mistakes, but the routine
opening of key meetings and conference calls to the public in some fashion,
without the 'filter' and delay of an investment professional whose interests
fundamentally conflict with mine.
Once the value of the 'chummy' relationship between investment analysts and
some company officers is diminished, a publicly traded company should have
nothing to fear from full disclosure. After all, everyone finds out in the
end. The only question is who got to profit from it.
Sincerely,
Stanly E. Ward
http://www.sec.gov/rules/0427b09.htm
Last update: 05/18/2000
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