joegratz.net

I’m liveblogging from Blog Law and Blogging for Lawyers, presented by Law Seminars International.

Page Mailliard:

There are several securities law risks of blogging. It could jeopardize private securities offerings, since there’s no general solicitation in that case. You’ve got to avoid appearing to solicit random people you don’t have a preexisting relationship with.

There’s also “gun-jumping”. When a company is in registration for a public offering, hyping the company, even on a blog, could be seen as an offer of securities. “The SEC may very well flip out.”

Rule 10b-5 could pose problems too, for securities fraud. Untrue statements or omissions of a material statement could be securities fraud. This applies to all public companies as well as those in the middle of an offering. This is really tough, since this communication is informal and has to be authentic. However, there are implications to failing to tell the whole story.

The other issue is selective disclosure. Disclosure of material nonpublic information about a publicly traded company could be a problem. So when you’re saying something that might be material in a possible nonpublic setting, you put out a press release and file an 8-K. Blogs are a tough question — she doesn’t think they’re public enough, at least under current rules. This is likely to change over time.

Insider trading is also tricky. “It’s bad. You go to jail.” The disclosure of material nonpublic information to others who trade on it is illegal; there’s liability for tippers and tippees.

Forward-looking statements are promoted by the SEC, but they can be problematic in litigation. Federal law allows companies to include “safe harbor” cautionary language that protects these statements, but if you don’t include that language in your blog, your optimistic statements could be used against you in future litigation.

How do you minimize your securities law risks? First, establish blogging guidelines. Use clear disclaimers that indicate that personal blogs are not corporate communications. (Don’t rely entirely on the disclaimers.) Training and regular monitoring helps, showing that you are trying to avoid securities law violations.

Q: What about Microsoft, with thousands of employee bloggers? A: Maybe have a blogging hotline, so they can self-police and call if there’s a problem.

Also, archive blogs in case there’s a discovery requirement.

Continue to talk to legal advisors as the blogging environment continues to change.