This is in the context of Icahn announcing he had a large position in Apple and had a phone call with Tim Cook. This then led to a 5% increase in share price. Basically 2 tweets worth $17 Billion in Apple's market value.
what is protection from "pump and dump" here? He isn't allowed to dump the stock for some time? doesn't seem so. One reason Buffet, for example, has special reporting arrangement with SEC is to prevent such volatility, and as a side effect i think it also decreases potential for such pump and dump on his side (not that i imply that Buffet would succumb to such temptation :)
edit: after refreshing myself on Buffet's exception, it seems it protects his interests from volatility, not public's :).
That's quite a nice scheme for free money, if you are that sort of person: "Hey dude, our share price could do with a kick, fancy a tweet or two? I'll give you 1% of the rallied price." That'd be 170 million dollars for two tweets, I bet not even the likes of Icahn would sneeze at that sort of petty cash. Obviously the money moves from Bahamas to Bermuda and the SEC is none the wiser.
I'm not convinced the fact that it's now legal to post such comments make such accounts any more valuable. It seems unlikely it not being legal would dissuade pump&dumpers.
Thankfully their new 2FA actually looks decent, although presumably you could just go after a known user's already-authorized client device for easy and profitable lulz/great justice.
Does it bother anyone else that the SEC is considering disclosures on closed ecosystems like Twitter to be ok when the stock impact is in the billions?
Is this allowed because Tweets are accessible without login or would this be ok on a platform like say, Quora, which requires login to access most of its content?
It's a good point, but the concern is not free as in beer, the concern is free as in access. The SEC doesn't allow publication in newspapers that refuse to sell copies to clients they don't like, but a Twitter open only to account holders might mean some people were denied access for non-financial reasons, especially if they were unable to make an account.
Running a closed access account on Twitter would be a gateway to jail for a guy like Ichan. That's simply pure speculation. Icahn is not trying to get retailers to buy his stock... that's what morons like Jim Cramer are for.
Well gateway to breaking the rules. But, essentially white collar criminals don't go to jail no matter how much they do illegally. Of course, there are exceptions, throwing Martha Stewart in jail, for example - but it is very very rare compared to the amount of crime done.
I would guess the days-in-jail/$-value-of-illegal-activity for white collar crime is under 1/10,000th of that for crimes generally done by those that don't have country club memberships.
The SEC was pretty clear that social media disclosures cannot be done in a way that restricts access. A non-public Twitter account would not be in compliance with the rules.
If Twitter had Quora's restrictions, it may or may not qualify as exclusionary, but it probably wouldn't be "reasonably designed to provide broad distribution" as rule FD requires, since its distribution would be far more limited.
The whole point is to increase distribution. The SEC's guidance was incredibly boring and utterly unsurprising. It said nothing more than that disclosures on social media sites can be (but not necessarily are) in compliance with Rule FD, the relevant portion of which I've pasted below. It's not a grant of immunity to anyone who might seek to disclose material non-public information to a limited class of people. On the contrary, it reminded issuers of their responsibility to ensure wide distribution.
"""(e) Public disclosure.
(1) Except as provided in paragraph (e)(2) of this section, an issuer shall make the ‘‘public disclosure’’ of information required by §243.100(a) by furnishing to or filing with the Commission a Form 8–K (17 CFR 249.308) disclosing that information.
(2) An issuer shall be exempt from the requirement to furnish or file a Form 8–K if it instead disseminates the information through another method (or combination of methods) of disclosure that is reasonably designed to provide broad, non-exclusionary distribution of the information to the public."""
Thanks, that's what I was asking about. Makes sense that the SEC allows this if the content is accessible to anyone without login and the content is crawl-able by search engines (i.e. easily discovered).
It looks like an old world rule applied to the new world. In the old world it was expensive to publish, so it was accepted that publication takes place in non-free (as in free beer) media.
In the new world publication is almost free, and perhaps one would just need to register a URI to point at all relevant information.
I'm not familiar with US legislation regarding this, but our (german) laws regulating publicly traded companies would cause a lot of trouble for both Icahn and Icahn Enterprises.
I wonder what he was thinking while typing up that double digit billion dollar tweet. And now I wonder what his accountants and lawyers are thinking.
While he was CEO of Sun, Jonathan Schwartz got an SEC clarification that blogging is OK under Reg FD, so I guess Tweeting is also allowed. I wonder if Bloomberg syndicates Icahn's tweets now.
This may be what you are referencing, but Bloomberg terminals began carrying tweets from selected financial figures and organizations earlier this year:
In order not to get into trouble with the SEC, wouldn't Icahn have had to issued this press release alerting investors to look at his Twitter account before he tweeted? Seems like it happened the other way around, which leaves plenty of leeway for screwy trading.
