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Avoiding Potholes When Guiding The Street

Biles Michael | January 25, 2005

Companies today are faced with the complex challenge of providing quality guidance to the marketplace while simultaneously avoiding the scrutiny of the SEC and the plaintiffs’ bar. The pressure to increase transparency—coupled with the threat of regulatory and shareholder litigation—means that companies must walk a fine line between disclosing too much information and providing insufficient amounts, which in turn can hamper analysts’ ability to report effectively on the company’s valuation and future prospects.

True, increased disclosure can lead to increased liability, but this doesn’t mean that companies shouldn’t be making the effort. In fact, companies that are armed with a basic understanding of the law and that enforce a few simple policies can provide quality information to the market without fear of litigation.

Enforcement Of Reg. FD: Rare But Painful

Two groups monitor public company interactions with analysts:...

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