Lurking in the Shadows: The Hidden Issues of the Securities and Exchange Commission's Regulation FD

Abstract

This Article explores key issues likely to arise under Regulation FD, including some that the Commission may not have envisioned in promulgating the Regulation. The first part begins by reviewing the scope of the Regulation in the ensuing discussion. In Part II, the Article addresses how well the Regulation fits with the policies underlying the federal securities laws. Focusing on issues related to an issuer's duty to disclose, the efficiency of capital markets, and the Commission's predominant emphasis on fairness in promulgating the Regulation, the authors note that in many ways Regulation FD provides an awkward fit with the general securities law framework. In Parts III and IV, the Article examines more closely how this awkward fit will play out in practice as the Commission implements the Regulation. Here, the authors highlight such issues as materiality determinations, distinguishing between intentional and non-intentional disclosures, and Regulation FD's interplay with Rule 10b-5. Finally, in Part IV, the authors offer some concluding thoughts on the Regulation's future.

Keywords: Securities law, Regulation FD, Regulation Fair Disclosure, Rule 10b-5