New Rules for Trade Disclosures Approved
The Securities and Exchange Commission on Thursday took the first major steps toward reform of corporate disclosure practices, approving proposed rules to speed reporting of insider stock transactions and key company financial data.
The agency’s commissioners unanimously OKd a proposed rule to make companies disclose executive stock trades in as little as two days, to give investors early clues about the faith that corporate leaders may have in their firms.
A second proposal approved Thursday would shorten by one-third the deadlines for firms to file annual and quarterly reports.
Both of the rule changes were spurred by Enron Corp.’s collapse, which was preceded by heavy sales of stock by some insiders. Many experts argued that the energy trader’s hidden financial woes might have become apparent to investors earlier if disclosure rules were tightened.
The SEC’s proposed changes would require companies to disclose sales and purchases of stock by corporate insiders on the SEC’s 8-K or “current report” format, which companies now file to report important news. Transactions or loans totaling more than $100,000 would need to be filed within two business days, with longer deadlines for smaller transactions.
Currently, corporate insiders are responsible for disclosing their stock transactions, not the companies. For some kinds of transactions, such as sales back to the company, executives have until 45 days after the end of a firm’s fiscal year before they must report.
The second rule change would require companies to file annual reports within 60 days instead of 90 days after the end of a fiscal year. Quarterly financial filings would be required within 30 days instead of 45 days.
The proposed rule on trade disclosures will be open for public comment for 60 days before the SEC votes on whether to make the proposal permanent. The proposal on accelerated filing of quarterly and annual reports will be open for public comment for 30 days.
JetBlue Airways Raises
$158.5 Million in IPO
JetBlue Airways Corp., the 2-year-old discount airline, raised $158.5 million in its initial public offering Thursday after twice boosting the sale to meet demand from investors.
New York-based JetBlue sold more shares at a price higher than it was seeking. The airline sold 5.87million shares at $27 each, up from the 5.5 million shares at $25 to $26 it had expected to offer.
The airline, which operates from Long Beach Airport and Ontario Airport in the Southland, is run by businessman David Neeleman and is backed by investors such as George Soros and JP Morgan Partners. It has lured customers with new planes, leather seats, reliable service and inexpensive coast-to-coast fares starting at $114 each way. It enticed investors with promises of increasing earnings and steady expansion.
“It seems to be a winner,” said John Hammerschmidt, an aviation analyst at money manager Turner Investment Inc. “They seem to have gone into a market niche that makes it hard for competitors to catch up.”
The IPO marks the first time since Netscreen Technologies Inc. went public in December that a company has found enough demand to twice boost its offering, according to Dealogic, which tracks IPOs. When JetBlue first filed terms of its sale in March the company was seeking a share price of $22 to $24.
The stock will begin trading today on Nasdaq under the ticker symbol JBLU.
Bloomberg News
