Regulation Fair Disclosure and its Effect on Corporate Information: a Checkup on a Controversial Rule & Content Analysis of Hewlett-Packard News Release Habits

On October 23, 2000, the Securities and Exchange Commission (SEC) instituted Regulation Fair Disclosure (Reg FD), which mandated that all public companies give stock-moving information to all investors simultaneously. What seems simple in concept has actually been difficult for many companies to interpret and has resulted in some falling victim to sanctions from the SEC. Siebel Systems, ImClone Systems, Tyco International, Adelphia Communications and Raytheon are some examples of companies who have recently engaged in corporate fraud that has misled investors. Reg FD is in existence today to stop companies from hand-picking who gets their news first. This study will provide background on Reg FD and what effect it has had on disclosure for publicly held companies, analysts and investor relations professionals. Reg FD is just over six years old - what are the differences since the implementation over the last three years compared with the first three years? Is disclosure of stock-moving news happening with more frequency? This author will take a look at the news release practices of Hewlett Packard and compare what it has done since the inception of Reg FD. This author is in charge of a newsroom in New York for Business Wire - a company that distributes hundreds of news releases on a daily basis. It is that involvement in news distribution over the last 18 years which has motivated the author to focus on this topic