Marketwatch is reporting that the SEC has charged Office Depot executives with violating fair disclosures regulations:
Office Depot Inc. executives selectively shared information with analysts and its largest shareholders, giving some an unfair advantage, the Securities and Exchange Commission said Thursday after launching enforcement actions against the retailer and CEO Stephen A. Odland and then-CFO Patricia A. McKay for violating fair disclosure regulations. “Office Depot executives selectively shared information with analysts and the company’s largest shareholders in order to manage earnings expectations,” said SEC Division of Enforcement Director Robert Khuzami.
The SEC’s concern here is that selective disclosure gives certain traders and investors an unfair advantage in the marketplace, and that companies ought to disclose material information to all investors at the same time. The theory is that disclosing material information to all investors at the same time levels the playing field and makes markets fairer.