A new rule is proposed by the US Securities and Exchange Commission to stop companies giving favoured analysts and investors advance news of important financial information. This new rule, which the SEC commissioners will vote on tomorrow, says that if a company disclosed material, (non-public information) to any outside person, it must simultaneously or quickly place the information in the public domain.
This is meant to prevent selective disclosure of news, which benefits big securities firms and potentially gives their clients an advantage over smaller investors. It will be interesting to see, however, whether the consequence of the rule is greater availability of information, or such strict bans on talking to any outside contact that news to the public is effectively choked. Either way, the potential impact on the corporate culture of secrecy in America could be huge.