Category Archives: Industry news

The EDGAR time-lag is not high frequency traders’ conspiracy. But it is why XBRL is needed.

Recent articles by the WSJ’s industry watchdog Scott Patterson highlighted academic research that showed that some (assumedly professional) investors are receiving SEC EDGAR files moments-to-minutes before retail investors via a dedicated paid subscription feed. This paid feed is in comparison to the files being openly available on the SEC.gov EDGAR site… free for anyone.

From the WSJ:

The studies were the latest indication that some superfast, sophisticated trading firms enjoy an advantage over other investors, echoing previous cases in which high-frequency traders received corporate news releases or key data on the U.S. economy milliseconds before competitors.

It wasn’t clear whether the change in timing was the result of action by the SEC, a contractor running a direct feed or simply stemmed from technology glitches in its distribution system.

In this case, unlike the high frequency traders’ conscious effort to game the system, this is more likely to be a result of “left-overs” from pre-2002.

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Allow me to explain: up until May 2002, the SEC did not publish issuers’ SEC files when they received them – their website technology took up to 48 hours!

I know this first-hand via the shareholder communications business - as to populate the SEC files on investor relations websites, we bought a separate “real-time” feed from ye olde’ Edgar Online. Besides, being pert-near instantly available (to advance corporate transparency), the commercial feed was also property parsed for import. In fact, all IR website vendors still buy a feed from a 3rd party – not the SEC. I doubt the research looked at the EDGAR file publishing timing on an issuers own IR website.

Obviously, this data formatting is a necessity for Street portals like Bloomberg. It’s a tried and true data feed that the portals have used for years – long before the SEC itself went real-time. No conspiracy. Just the reality of the data business.

From the WSJ:

Still, the episode underscores how outmoded the system has become, say securities experts.

“It’s an ancient computer system that is processing more and more data than it was designed for,” said Scott Kimpel, a partner at law firm Hunton & Williams LLP.

The SEC is in the early stages of a multiyear modernization of the system. Ms. White said in congressional testimony earlier this year that the effort would simplify the financial-reporting process and ensure investors have access to better data.

This is where the evolution to XBRL will level the playing field compared to EDGAR. One single source – directly verified by both issuer and SEC. Will XBRL curtail the nefarious appetite of high frequency traders? – of course not, but at least the SEC will not be accused as an enabler.

This discussion above makes my XBRL rant even more “interesting.”

Have a great day.

Total IPO and SEC transactions: Q1 – Q3 2014

2014 is well-celebrated for the return of IPOs to the capital markets, with 207 IPOs counted by industry watchdog Renaissance Capital.

However, important as they are, IPOs are a small percentage of the year’s success. In fact, these 207 IPO S-1 filings are only NYSE and NASDAQ listed – and less than 27% of the total S-1 filings count of 790.

 

The eight key transactions. Click to enlarge.

Remember, an S-1 is not just for an Initial Public Offering. Public companies submit a Secondary Offering S-1 (and sometimes S-3) file to the SEC anytime they issue new stock for public sale. Post IPO, this S-1 registration is typically to refinance or raise more capital for growth. Click here to download our S-1 workflow whitepaper. 

Total transactions for Q1 – Q3 2014 is 1,858. We carefully track all capital markets transactions as Vintage executes the end-to-end registrations tasks for issuers: typesetting to filings to hardcopy printing. You can see a drafting session in this video.

Transaction types:

  • S-1: General form of registration statement for all companies including face-amount certificate companies
  • S-3: Registration statement for specified transactions by certain issuers
  • S-4 Registration of securities issued in business combination transactions
  • N-2: Initial filing of a registration statement on Form N-2 for closed-end investment companies
  • F-1: Registration statement for securities of certain foreign private issuers
  • S-11: Registration statement for securities to be issued by real estate companies
  • 10-12G: Initial general form for registration of a class of securities pursuant to Section 12(g)
  • 10-12B: Initial general form for registration of a class of securities pursuant to Section 12(b)

A last point is to re-emphasize is that the media (i.e. Jim Cramer shouting and honking horns) tends to focus on the NYSE and NASDAQ IPOs. Hundreds of Emerging Growth Companies and large international companies IPO each year on the OTC Markets. Dig deeper to see growth.

Have a great day.

Board members are under a lot of pressure. Sending “Tweets” is not one of them.

The 11th Annual NYSE Boardroom Summit was an exceptional conference. Hundreds of directors, general counsel and compliance officers from hundreds of public companies’ boards assembled to review the essential issues that drove success in 2014 and what will drive success in 2015.

NYSEBOARD

One point was evident – the board members in attendance have an intense desire to be effective as possible: cyber-security, succession, diversity, culture, activists, crisis preparation, say-on-pay were all on the two-day agenda. The common tread across all these topics was understanding and mitigating risk for company and shareholder alike. You can download the summit handbook here now, courtesy of the NYSE Governance Services team.

One of the most promising sessions (that pertains to this blog) was titled “Social Media and the Changing Landscape of Corporate Disclosure.” Being a noise-maker in the shareholder communications industry, I was looking forward to hearing what boards were doing in regard to social media: 1.) what channels do they use, 2.) what topics do they share, 3.) how they work with the company to assure no material disclosure.

Well, the conference would have none of that. Having directors personally active in outbound social media was never discussed. Not even in the slightest. The dialog was completely focused on the business and risk oversight of the companies’ use of social media. It’s important to emphasize there was not a “should we or shouldn’t we” debate like is still lingering in investor relations. The board was not “against” social media - it’s just not in their sphere of communication responsibilities.

Ironically, these four tweets best summarize the session:

  • Boards’ responsibility is to concentrate on social media risk and policy rather than “tweeting.” #NYSummit
  • Boards to focus on the prevention of the negative rather than the promotion of the positive re: #socialmedia #NYSummit

Have a great day.

The SEC is closed for Columbus Day: Monday, October 13

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In honor of Columbus Day, the SEC is closed on Monday, October 13, 2014. No files can be received.

Files submitted after 5:30 pm ET, Friday, October 10, 2014 will receive a filing date of October 14, 2014 and will be posted to the public on October 14, 2014 at 6:00 am ET.

As with other holiday closings, the following file types will receive a Friday, October 10, 2014 filing date if filed by 10:00 pm ET on Friday:

  • Form 13H filings
  • Section 16 filings (3, 3/A, 4, 4/A, 5, 5/A)

For any filing with a due date of Monday, October 13, 2014, the SEC will move the due date to the next business day, Tuesday, October 14, 2014.

Have a great holiday.

Adding our expertise to the NYSE Governance Services Boardroom Summit, 9/30 – 10/1

Exciting news for Vintage and the further recognition of our intelligent value begins next week and continues throughout 2015.

“We’re pleased to add Vintage to our quiver of experts,” said Ty Francis, Vice President & Publisher, NYSE Governance Services. “Their practical product experience for regulatory compliance and investor relations complements our other conference series partners and sponsors perfectly.

Our corporate audiences will find their knowledge of the tactical execution of compliance and shareholder communications extremely useful.”

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One benefit of being the silver sponsor and official financial printer for the NYSE Governance Services is a sneak peek at the topics and event materials for next week’s 11th Annual Boardroom Summit.

Topics include:

  • Rethinking Shareholder Engagement in the Age of Activism
  • Social Media and the Changing Landscape of Corporate Disclosure
  • The Regulatory and Rule Making Agendas: What to Expect
  • The Role of Special Committees in M&A Transactions
  • Crisis Preparedness and Response: “When Things Go Bump in The Night”
  • Top Questions the Board Should Ask about Your Compliance and Ethics Program
  • The Art of Shareholder Communication
  • The Real Key to Driving Total Shareholder Return

Wow! Hundreds of CEOs, CFOs, directors, counsel and advisors will be well prepared for what the future may bring the equities they support.

Look for us.

Have a great day.

The SEC is closed for Labor Day: Monday, September 1

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In honor of Labor Day, the SEC is closed on Monday, September 1, 2014. No files can be received.

Files submitted after 5:30 pm ET, Friday, August 29, 2014 will receive a filing date of September 2, 2014 and will be posted to the public on September 2, 2014 at 6:00 am ET.

As with other holiday closings, the following file types will receive a Friday, August 29, 2014 filing date if filed by 10:00 pm ET on Friday:

  • Form 13H filings
  • Section 16 filings (3, 3/A, 4, 4/A, 5, 5/A)

For any filing with a due date of Monday, September 1, 2014, the SEC will move the due date to the next business day, Tuesday, September 2, 2014.

Have a great long weekend.

Pump-and-dump and revenge porn: twin trolls of different mothers

A recent briefing issued by Gray Reed & McGraw, P.C. highlighted a lawsuit against a social media platform by an individual accusing the platform of being slack in removing a fake profile, built in their name, that was populated with pornographic images. A spiteful ex-lover built the profile: a terrible, manipulative action.

From Gray Reed:

My guess is this case will likely be removed to federal court (both defendants are out of state) and then summarily dismissed… website operators [name] are not liable for the content created by others under the Section 230 of the Communications Decency Act.

“No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

NOTE: The New York Times published an EXCELLENT piece titled Dealing With Digital Cruelty.

Although it pales in comparison (psychological and creepy) –  this mainstream social media lawsuit absolutely reminded me of the recent NanoVircides v Seeking Alpha ruling. NanoVircides asked the court to force Seeking Alpha to disclose the name of an obvious (to most of us in IR) and manipulative stock pumper.

NanoVircides lost, via a core First Amendment Freedom of speech (opinion) position.

PUMPPORN

From the Supreme Court of NYS:

It is paramount in an open and free society that we protect the anonymity of those whose “publication is prompted by the desire to question, challenge and criticize the practices of those in power without incurring adverse consequences.”

So, what does this mean for “Investor Relations and Social Media?”

First, it means that the pump-and-dump “conversations” once only held in the deep and creepy board chats are now front and center on mainstream social media platforms. Before “social media,” the lionshare of chat rooms were populated by pumpers happily gaming each another. It was more like gambling than investing. Today, the elevation of these chats into mainstream portals plops the manipulative pump “stock opinions” directly in front of day-traders. Day-traders, although not proactive pumpers, are opportunistic investors.

Second, it means – to quote Talking Heads – same as it ever was. Equities cannot squelch people from expressing their investment “opinions” in social media. Similarly, restaurants and hotels are facing these legal battles over posts in review portals like Yelp and Trip Advisor.

Third, you need to listen to what is being said a bit more. IR – especially micro to small-cap issuers – should set up profiles and alerts in all the stock opinion portals. Begin to understand who the ethical opinion generators are and who the one-pump-wonders are… like the stock pumper that affected NanoVircides. This may begin to help germinate a relationship or at worst… a crisis response strategy.

Fourth, it’s time to stop ignoring social media. If fact, just call it “media.” Sit down with your PR team and make a plan, proactive and reactive. “Media” is not going away.

True, it was once a common and safe strategy to ignore the bulletin board chats… but the inescapable truth of social media is that it is now mainstream for many investors.

Fifth, start building your IR presence NOW. IR should feed the social media portals’ newsflow with your verified and legal-vetted news releases.  This is a safe and simple action.

CLICK HERE to download our whitepaper on how to start building your presence.