The US Securities and Exchange Commission (SEC) took its first
enforcement actions yesterday under a fair disclosure rule enacted
in 2000, citing three companies, including Siebel Systems, for
violations.
Siebel chief executive officer Tom Siebel told attendees at an
invitation-only Goldman Sachs conference in November last year that
he was optimistic because Siebel's business was returning to
normal.
His comments contrasted with statements made three weeks earlier
that the IT market was tough and the company expected to face that
climate for the rest of the year.
Siebel's optimistic remarks, to which most investors had no access,
prompted significant trading and pushed Siebel's share price up
about 20% higher than the previous day's close.
Regulation FD, which took effect in October 2000, bars companies
from selectively disclosing material information before releasing
the information publicly. By failing to simultaneously release Tom
Siebel's comments via a Web cast, press release or SEC filing,
Siebel ran foul of the regulation, according to the SEC.
The SEC has filed a cease-and-desist order against Siebel. It has
also sought a $250,000 (£160,050) fine for the infraction, a
penalty to which Siebel has agreed.
Siebel confirmed the penalty in a statement yesterday, which said
that Tom Siebel had been unaware when he made the remarks that the
presentation was not being broadcast on the Web.
The SEC backed that statement in its own report on the case, noting
that while Siebel's director of investor relations knew no Webcast
was planned and spoke with Tom Siebel shortly before the
conference, she did not tell him there would be no Webcast.
The SEC settlement will not affect the company's financial
condition, Siebel said, adding that this resolves the only known
matter of investigation between the company and the SEC.
The SEC also took action against Raytheon and its chief financial
officer, Franklyn Caine, and Secure Computing and its chief
executive officer, John McNulty, for similar violations.
It also filed an investigation report on Motorola related to the
disclosure regulation, but did not take action against the company.