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SEC: Corporate blogs may be used for required financial disclosures

October 12, 2006

UCLA Law Prof Steve Bainbridge pulled another reason for corporate blogs from a New York Times article. The disclosure of significant financial information. The S.E.C. will allow blogs to be used to disseminate a company’s financial information so long as the blog reaches a broad audience.

Knowing the The S.E.C. chairman, Christopher Cox, has a penchant for technological innovation, Jonathan Schwartz, CEO of Sun Microsystems has made the the case for blogs — including his own — as a way to expand investors’ access to information. In a Sept. 25 letter to the S.E.C. Schwartz noted that Sun’s Web site gets an average of nearly a million user hits a day, including the blog that he writes as chief executive and those of thousands of Sun employees. He further wrote “Its content is ‘pushed’ to subscribers. This Web site is a tremendous vehicle for the broad delivery of timely and robust information about our company.”

S.E.C. spokesman, John Nester, said that agency regulations contemplate “Web-based disclosure, and that’s why the rule does not proscribe any particular method of dissemination — so long as it is broad and nonexclusionary.”

The Times also noted Thirty Fortune 500 companies are now publishing corporate blogs.

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