May 14, 2006
The Quiet Period
The SEC's new rules on public offerings are a mess. The agency's preoccupation with "gun jumping" is continuing to stifle public information on new stock offerings. The new rules opened up some information flow in the pre-registration period, but only for our largest companies -- those with information already in the market, and did not fix the quiet period. The quiet period is after registration and before the effective date, the waiting period. In the quiet period only very privileged investors (those at road shows) get any information on a new offering. It is a travesty. The SEC's efforts to control information in the Internet age should be the subject of ridicule. The agency needs to focus on what is said (suing folks if they lie or otherwise mislead) and relax their censorship rules. censoring what can be said for fear of public misunderstanding. The SEC is following an obsolete and failing strategy.
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I suppose they could could stop reviewing registration statements and allow them all to go effective after the statutory 20 days. I do not see that happening now because of politics.
Posted by: Robert Schwartz | May 14, 2006 8:10:29 PM