WASHINGTON - The Securities and Exchange Commission said Wednesday that it would meet next week to discuss proposed rules on selective disclosure, among other things.
The meeting is one of the first stages in the rulemaking process, and could result in the proposals being put out for public comment, an SEC spokesman said.
Chairman Arthur Levitt Jr. recently told more than 100 lawyers at a meeting of the Association of the Bar of the City of New York that a proposal, due out by yearend, would address issues such as the "backroom practice" of companies feeding information to certain analysts, at the exclusion of others.
Other areas of SEC concern, he said, include the possibility that analysts are being silenced by their employers to protect the firms' investment banking relationships. That issue arose recently when Bear, Stearns & Co. reportedly cracked down on analyst Sean Ryan, who had made negative comments about First Union Corp. of Charlotte, N.C.
The SEC also said it would discuss at next Wednesday's meeting whether insider-trading liability requires "use" or "knowing possession" of material nonpublic information.
In addition, the SEC will consider adopting final rules and amendments to improve disclosure about the functions of corporate audit committees. The rules also seek to enhance the reliability and credibility of financial statements of public companies, the SEC said.
- Cheryl Winokur