Regulators Rethink Pre-IPO Chatter --- SEC Reviewing 'Quiet Period' Rules That Limit What Companies Can Say Ahead of Offerings
U.S. securities regulators are reviewing whether to ease limits on what companies can say ahead of initial public offerings, after lawmakers complained small investors were kept in the dark during this year's botched stock sale by Facebook Inc.</br></br>Mary Schapiro, chairman of the Securities and Exchange Commission, has asked her staff to review the "quiet period" rules barring remarks about a firm's prospects around the time of a share sale, according to a letter she recently sent to Rep. Darrell Issa (R., Calif.).</br></br>"We should review our communications rules and the application of the quiet period" in light of changes in technology and the stock market in recent years, she said in the Aug. 23 letter, which was a response to one Mr. Issa sent in June.</br></br>The SEC's stance could open the door to more changes for IPOs, even as the agency has yet to complete rules to implement modifications set out in this year's Jumpstart our Business Startups, or JOBS, Act. The law was designed to facilitate capital-raising for some companies.</br></br>The JOBS Act, and Facebook's flubbed debut in May, have made IPOs one of the most controversial issues in markets this year. Facebook's share price fell sharply from its $38 debut, exposing what Mr. Issa called "substantial flaws" in the process.