Reuters: Regulatory News: SEC to review "quiet period" IPO rule after Facebook mess - WSJ

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SEC to review "quiet period" IPO rule after Facebook mess - WSJ Aug 27th 2012, 06:13 Mon Aug 27, 2012 2:13am EDT Aug 27 (Reuters) - U.S. stock market regulator the Securities and Exchange Commission (SEC) is reviewing whether to relax rules governing what companies can say ahead of initial public offerings, the Wall Street Journal reported on Monday. The review comes after Facebook's botched listing, which prompted more than a dozen shareholder lawsuits accusing Facebook and its underwriters of obscuring the company's weakened growth forecasts ahead of the listing. Facebook shares have almost halved from their $38 IPO price. Some U.S. lawmakers have complained that small investors were kept uninformed in the runup to the May IPO, the Journal said. The head of SEC Mary Schapiro has asked her staff to review the "quiet period" rules which ban remarks about a firm's prospects around the time of a share sale, the Journal said, citing a letter Schapiro recently sent to Republican Congressman Darrell Issa. "We should review our communications rules and the application of the quiet period" in light of changes in technology and the stock market in recent years, Schapiro wrote in her Aug. 23 letter, which was a response to one Issa sent in June, the WSJ reported. Issa wrote in his June 19 letter that in the case of Facebook's IPO, "the informational disadvantage to the less informed public proved harmful". Schapiro, while declining to comment on the Facebook share offer, responded by saying the agency could review rules that gag company executives ahead of an IPO to prevent hyping of a stock, the paper said. The SEC could not immediately be reached for comment by Reuters outside of regular U.S. business hours. Link this Share this Digg this Email Reprints

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