Monday, April 27, 2009

Consult Your Regulator to See if Twitter is Right for You!

In yet another example of how regulators exert unfathomable control on business, this WSJ article describes how corporations are wary of disseminating information to investors via Twitter and blogs, lest they incur the wrath of the SEC. Here's a quote:

But even some tech-savvy companies remain wary. Intel Corp. in May will be among the first companies to allow shareholders to ask questions via the Web and vote online during its annual meeting. But the chip maker avoids blogs and Twitter for investor issues, because it fears violating SEC disclosure rules or inviting public criticism in a company-hosted forum, says Kevin Sellers, vice president of investor relations.

The second concern is valid, although I think Intel would get over it. The fact that disclosing more, and more easily accessible, information would violate SEC disclosure rules boggles the mind. This shows the pointlessness, in addition to the more obvious violation of individual rights, inherent in corporate regulation. Regulations are statutory, they are static, while the business world is dynamic and ever-changing. Companies should not have to ask the SEC's permission every time they want to improve service to their shareholders.

For another example of regulatory abuse, see the ongoing saga regarding how Paulson and Bernanke forced Ken Lewis to betray Bank of America's shareholders "for the good of the country." (To be blogged on once more details have trickled in.)

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