“For an executive to use a pseudonym to praise his company and stock ‘isn't per se unlawful, but it's dicey,’ said Harvey Pitt, a former Securities and Exchange Commission chairman. Told of the Mackey posts, Mr. Pitt said, ‘It's clear that he is trying to influence people's views and the stock price, and if anything is inaccurate or selectively disclosed he would indeed be violating the law.’ He added that ‘at a minimum, it's bizarre and ill-advised, even if it isn't illegal.’
A spokeswoman for Whole Foods said Mr. Mackey only revealed information about Whole Foods that already was public knowledge. His comments ‘weren't illegal’ and weren't ‘against company policy,’ she said.”
I called some securities law experts, but they all seemed to think that the problem was a bit broader than that. It’s a control issue, they explained. The CEO is disseminating information that hasn’t been reviewed by either the general counsel or the board. If his comments move the market, he could be engaging in stock manipulation. If anything he says is materially misleading, he’s violating Section 10B of the Securities Exchange Act. If any material nonpublic information slips out, he’s violating Regulation FD, which forbids selective disclosures. If he’s ragging on a competitor’s CEO, he could inadvertently say something defamatory. If there are confidentiality agreements in place, he could be violating them.
« Older Star Trek as you’ve never seen it.... | Arise ye criminals
of want...... Newer »
This thread has been archived and is closed to new comments
Buy a Shirt