Reg FD Busts Didn't Rock Anyone's World

SEC officials indicated that the comments likely would not have violated Reg FD had the question-and-answer session with Siebel been Webcast and had the company widely distributed a press release alerting the public of the Webcast in advance.

Siebel Systems did not admit or deny any wrongdoing in the case and noted in a statement that the CEO was unaware the conference was not being Webcast. Spokeswoman Nitsa Zuppas added that Siebel always has gone out of its way to comply with Regulation FD.

"The company's investor relations director knew the conference was not going to be Webcast, and she did not provide that information to the CEO," said Scott W. Friestad, the SEC's enforcement division assistant director. "It's also the case that he [Siebel] probably should have asked."

Friestad said in the aftermath of the Siebel fine that he suspects Webcasting will pick up even more momentum than it already has.

Donald Eagon, chairman of NIRI's board and vice president of global communications and investor relations at Diebold, agreed Webcasting may become even more popular following the Siebel fine. He said his company tells conference hosts, "If you're not going to Webcast this, then we probably will be a little more cautious about information that could be borderline material and nonmaterial."

NIRI recommends that its members use Webcasts as often as possible -- not only investor conferences, but also events such as analyst days, according to Thompson. According to a NIRI survey of its members in August 2001, 92% broadcast live Webcasts of their conference calls, up from 66% just 12 months earlier.

But in contrast to Thompson, others said Siebel's comments seemed relatively innocuous and thus did not present such a clear violation of Regulation FD.

"It struck me as a very general statement about business trends," said Ian Murray, a portfolio manager at Straus Asset Management in New York. It was not as if Siebel gave away details about a specific contract or what the company's financial results would be, he added. "For him to get in trouble for something like that kind of worries me."