SEC's Cox uses blogs to gauge public sentiment

By Karey Wutkowski

WASHINGTON (Reuters) - The chairman of the U.S. Securities and Exchange Commission, a technology cheerleader who recently posted on a corporate blog, said on Monday that he uses blogs to gauge public reaction on securities issues.

Christopher Cox, speaking at the Reuters Regulation Summit in Washington, also said the commission will be looking further at what corporate Internet posts might constitute public disclosure.

Cox has been an outspoken proponent on using technology to improve company transparency and investor education, especially pushing to make SEC filings rich with interactive data.

But he also uses technology to get an early peek at how the public will react to SEC action on issues.

"Blogs are a great way to infer passion and depth of feeling," he said at the summit. "They give you an early read on the ... response you might expect."

But Cox said he does not rely on blogs to find the way forward on tough issues. "Blogs in many cases are so irreverent," he said. "They don't wait for facts."

Cox himself made a brief public blog appearance in November, posting a comment on the blog of Sun Microsystems Inc. Chief Executive Jonathan Schwartz.

Schwartz had sent a letter the month before to Cox requesting that the SEC allow company news released on his personal blog to satisfy corporate disclosure rules.

Regulation Fair Disclosure requires publicly traded companies to widely publicize material information that may be important to investors in an SEC filing or a news release.

Cox then posted his response on Schwartz's blog, saying the SEC encourages the use of Web sites to give information to the market and investors and that it welcomes his offer to discuss the topic.

He said on Monday in the summit that the commission "will continue to look at the issue."

He said when Regulation FD went into effect in 2000, some of the commissioners raised questions about whether certain company Internet posts could qualify under the rule.

At that time the SEC concluded that a Web site would not be considered a sufficient disclosure method.

But Cox said Monday that the use of the Internet is "much more pervasive" today.