SEC Web guidelines vex press release services

By Robert MacMillan - Analysis

SAN FRANCISCO (Reuters) - A decision that may allow U.S. companies to use their websites to release market-sensitive information could hurt firms that distribute press releases and give some investors an edge over others.

The Securities and Exchange Commission, in a little-noticed decision last week, said companies could post information about themselves on their websites and blogs, and in some cases skip traditional distribution channels.

The trouble, press release distributors say, is that companies risk running afoul of regulations that require them to disclose information simultaneously and quickly.

Corporate press releases are generally available widely on the Internet, mainly through BusinessWire, which is part of Warren Buffett's Berkshire Hathaway Inc, and PRNewswire, a division of United Business Media Plc.

"When you post information on a website, it's not simultaneously available, and nobody really knows it's there either," said Cathy Baron Tamraz, chief executive of BusinessWire.

The debate revolves around "Regulation Fair Disclosure" (Reg FD), a rule that "material" financial news, such as results, executive changes or criminal investigations, be distributed to the public at the same time and for free.

"You have to really push it out and take steps to make sure that everyone gets their hands on it whether you're the largest institutional money manager at Calpers or if you're an individual investor in Kansas City," said Dave Armon, president of PRNewswire.

For example, thousands of companies release crucial information in their financial results through BusinessWire, PRNewswire and others.  Continued...