| amirnetz said: If you recall, a bunch of analysts were having buddy-buddy relationships with the Enron executives and Enron discriminated with the information it supplied to various analysts. Analysts which were friendly to Enron got information that other did not get. It was not illigal at the time (the Analyst could not use the information for insider trading). It was just dirty and caused a conflict of interest for the Analyst. As a result, in order to get the fresh information from the company the friendly analysts recommeded the stock and caused it to be pumped up. |
First, with respect to GAAP, i never meant to imply that Sarbanes-Oxley was the sole regulatory document regarding financial disclosures. If it read that way, i apologise for my lack of clarity.
I do not recall analysts having buddy-buddy relationships with Enron. I do recall Enron having fairly acrimonious relationships with analysts including a famous incident where an Enron executive called an analyst an asshole during a quarterly report meeting because the analyst had the audacity to ask them if they could provide transparency to their books that was more in line with what every other company in the United States provided (he asked for a balance sheet).
I recall Enron having a very buddy-buddy relationship with Arthur Anderson (who was supposed to be their independent auditor) and I recall Arthur Anderson being convicted of fraud and obstruction of justice (they destroyed documents) and losing their license to practise (which ended the company). I do not recall any analysts being charged or convicted of fraud in relation to Enron (which certainly would have happened if they had been part of a pump and dump scheme).
It is important to remember that the financial statements from enron were complete lies. Any inside information an analyst could have gotten would have been incredibly negative to the company because they were reporting significant profits while actually losing massive amounts of money. Any analyst who had inside information and continued to recommend the stock was absolutely committing a major crime.
Enron had no need to lie privately to select analysts to pump their stock because they were lying publicly to all of the analysts to pump their stock.
So I just took a look through the Sarbanes-Oxley act itself (a quick glance, i didnt read the whole thing). I see section 302 which discusses executive accountability for for periodic filings made under the Securities Exchange Act (quarterly and annual filings). I don't see anything about non-SEC related statements, like press releases. I think your company's rules regardings press statements are a good idea, but are corporate policy, not legal requirement.
