11–11. Use Web Broadcasting for Public Reporting

Publicly held companies are supposed to issue financial information to the public through the quarterly reporting process. However, this has, until recently, only required the issuance of standard quarterly financial statements and an annual meeting. Any further information was frequently limited to meetings with selected Wall Street analysts. This reduced level of information dispersal has now come to an end, thanks to the Securities and Exchange Commission’s Regulation FD (for Fair Disclosure). This rule requires companies to make a broad disclosure, through a press release at a minimum, whenever company officers release important information about the company to any outsiders. Though the traditional press release is sufficient for compliance with the regulation, it is also possible to generate much broader distribution of this information through the use of a webcast.

A webcast is simply a conference call that is posted on the Internet for general access. It allows virtually anyone to listen in on the discussions between company managers (usually the chief executive officer or chief financial officer) and outside analysts regarding company-specific information. This is a very inexpensive approach to disseminating information. It also keeps analysts from getting access to tidbits of company information that they can in turn send out to their clients as hot tips (especially since their clients may have been listening to the same ...

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