The SEC tightly controls how publicly quoted companies can announce information that could affect their share prices. The regulator must ensure that no investor or potential investor has access to information earlier than any other. Current rules dictate that information can be made public by a press release or by a telephone conference call but not simply on a website.
"A couple [of] years ago, when I first started blogging, I and our illustrious general counsel were far less worried about what I was saying than where I was saying it," wrote Schwarz on his blog. "For example, I couldn't use my blog to announce our quarterly performance, or disclose a material transaction. I had to use a press release, or a conference call with a telephone operator, no less!"
Schwarz has written to Christopher Cox, the Chairman of the SEC, asking for the rules to be changed. "Our corporate website (www.sun.com) currently receives on (sic) average of nearly a million hits per day," wrote Schwarz. "This website is a tremendous vehicle for the broad delivery of timely and robust information about our company. It is our view that proprietary news outlets are insufficiently accessible to the broad majority of Internet users and individual shareholders."
"It is certainly the case that the internet represents a broader user base than those able to afford subscriptions to traditional forms of media and thus usage of this or any other freely available company blog or web site should be considered sufficient in satisfying the objectives of Regulation Fair Disclosure," wrote Schwarz.
Regulation Fair Disclosure is the set of rules governing the release of information from listed companies. Schwarz is confident of a sympathetic hearing from Cox. "Now we happen to have a like-minded Chairman at the SEC," he wrote in his blog. "We've had enough interaction with the Chairman (and read enough of his writings) to know he understands the utility of the internet to inform investors - but until we see a formal revision or clarification to FD, we'll still be limiting what we disclose via blogs and the internet. And consuming trees with press releases. Which can't, in the long run, be all that desirable."
The SEC has said that using the internet to communicate is not against its rules, which do not specify or rule out any medium, but that any platform must be "broad and non-exclusionary".
