Siebel Systems Inc, Raytheon Co and Secure Computing Corp have all received a tap on the wrists from the US Securities and Exchange Commission for allegedly giving financial analysts material information in violation of securities regulations.
The orders, one of which was accompanied by a fine, mark the first time the SEC has enforced Regulation FD, for Fair Disclosure, which was introduced in 2000 to prevent public companies revealing material information to analysts before telling the public.
Siebel agreed to pay a $250,000 civil penalty, without admitting or denying any wrongdoing, over the SEC’s claims that a year ago CEO Tom Siebel gave material non-public information to about 200 attendees at a Goldman Sachs conference.The SEC filed a cease-and-desist order against Siebel Systems to prevent further infractions.
Siebel made positive comments about the company’s business that were based on material, non-public information and that contrasted with negative statements that he had made about the company’s business, the SEC said in a statement.
The SEC said the conference was invitation-only and that some attendees immediately bought Siebel stock following the comments, boosting the company’s share price 20%. Tom Siebel knew the comments were based on nonpublic information, but was not informed that the conference was not being webcast, the SEC said.
Secure Computing also received a cease-and-desist with no cash penalty, after the firm was unable to keep details of an OEM arrangement inked with Cisco Systems Inc under wraps. A deal announced this March under which Cisco would use Secure’s web filters in its content engine hardware was disclosed to analysts before the public, the SEC said.
Also on the receiving end of a cease-and-desist order this week is defense technology contractor Raytheon and its CFO Franklyn Caine. According to the SEC, Caine held one-on-one briefings with analysts tracking the company to inform them that their earnings estimates for the first quarter 2001 were higher than the company internally predicted.