Recent SEC Decision - Will it hurt PR Distribution Companies

2008-09-01 04:37:50 (GMT) (WiredPRNews.com - Business, Top Stories)

Dallas, Texas (WiredPRNews.com) — A Minor Decision of the Securities and Exchange Commission Could Have Major Consequences for Press Release Distribution Firms and Investors.August 11, 2008- The Securities and Exchange Commission (SEC) recently made the decision to allow companies in the United States to use their own websites or blogs to display information that is to be distributed publicly. For some, the announcement means a relief from having to spend money on distributing certain information through various media outlets. However, for those whose job is to distribute important news releases and announcements for companies, the consequences may be less beneficial.

An End to Widespread Use of Media Distribution Channels?

Many companies rely heavily on news distribution outlets such as Business Wire, PRWeb, WiredPR News, and PRNewswire for release of financial data, company records, and other critical information pertaining to themselves. With the recent decision of the SEC, companies may choose to disclose this information on their own websites or blogs and not go through the various channels they normally use to get this information to the public. This could potentially have a significant impact on firms that specialize in press release or business news distribution, and decrease their number of clients as well as revenue. Distributors have proposed that the decision may have adverse affects on companies as well. Some who choose to use their own sites for certain kinds of information distribution may be at risk of going against regulations and SEC requirements of getting it out concurrently and expeditiously. This is because often times, when information is posted on the Internet, there is little awareness of its availability, and it is not accessible on more than one resource. SEC committee reports propose that the recent decision was not intended to be controversial, or undermine the value of news and media outlets in distributing information for companies.
Time Will Tell

Many are worried about the possible repercussions of the new guidelines for company reporting, and some newswires have gone so far as to lobby against the changes. A major proposed issue is with inefficiencies in the market and unfair circumstances for investors. Investors may be at risk for being misled by falsified or inaccurate information. Some suggest that it opens up the opportunity for companies to broadcast positives they want emphasized and force investors to play hide and seek with the negatives. Newswires and press release distribution services are now waiting on time to tell whether the changes will affect them, or persuade companies to shy away from traditional disclosure methods.

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