Message Boards Raise Securities Laws Questions

Message Boards Raise Securities Laws Questions

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As with much of the rest of our world, the Internet is having a profound effect on the securities markets. Many institutional investors are now using corporate Web sites as a primary source for information about companies. Retail investors, empowered by on-line brokerage services, are becoming a more significant stockholder base. In response to these trends, companies are increasingly using the Internet to communicate with investors.

At the same time, institutional investors have joined retail investors, short sellers and others in the "wild west" of on-line investing -- Internet message boards and chat rooms. The growth of these forums raises a number of questions for companies:
  • Should we respond to false rumors posted on Internet message boards?
  • Should we monitor chat rooms to see what is being posted about our company?
  • Can we prohibit employees from posting messages on the Internet?
  • Is it possible to identify people who anonymously post false or confidential information about our company?

Click here to read the rest of this article, which was published as the July 1999 edition of Hale and Dorr LLP's Corporate Advisor. If you have any questions about this article, feel free to contact its authors, Jonathan Wolfmanat 617-526-6833 or [email protected], or Jeffrey Morganat 617-526-6277 or [email protected].

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