SEC warns companies on restating earnings

Author: | Published: 1 May 2005

In late March the SEC charged Flowserve with violating Regulation FD, or fair disclosure, and charged its chief executive officer (CEO) and director of investor relations with causing the violations. The action is the first brought under Regulation FD to concern a reaffirmation of company earnings, and the first to involve an investor relations officer.

Regulation FD is intended to prevent issuers from selectively disclosing material non-public information to analysts, institutional investors or broker-dealers before the public.

In the recent action the SEC charged that, during a private meeting with analysts, Flowserve's CEO...