The Math of Undertracking

[amirnetz]

nephel said:

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.

 

I am not lawer and never read SOX myself. So you might be right that it is not SOX that govern public disclosure.

I did find however the SEC regulation that governs it and would explain the coporate rules we work with:

http://www.sec.gov/news/extra/endseldi.htm

The short story is that companies cannot guide analysts privately. All of the guidance is done through their SEC filings and through public statements. Therefore the public statements regarding business performance are treated as investment guidance and therefore must be accurate to the level you would guide wall street.

So this is not just "our company rules". This level of prudence is required by SEC regulations.