Banks Mum to Investors as New SEC Rule Looms
American Banker (08/25/00) Vol. 104, No. 34 p.2; Moyer, Liz

Banks have become suddenly silent as they try to flesh out the new disclosure rule imposed by the Securities and Exchange Commission. Although the rule does not go into effect until late October, it is already creating confusion, as banks are beginning to stay silent, rather than risk anything. The rule, called Regulation FD, was created to level the playing field between large institutional investors, securities analysts, and individual investors, requiring that a company release market-moving information to all investors at the same time. In the wake of the new legislation, U.S. Bancorp cancelled a conference call concerning strategy between its chief executive and about 100 investors. Meanwhile, Bank One cancelled a meeting between its chief executive and five investors, and SunTrust Bank announced that it will no longer accept invitations to present at investor conferences, nor will it meet with individual investors or analysts; all of the banks site the new rule as the catalyst for these decisions. Tom Kelly, a spokesman for Bank One, said, "Based on the advice of counsel, we have substantially pared back our activities as we look at what's appropriate in the post-FD world."


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