SAN MATEO, CA: Siebel Systems is defending itself on First Amendment grounds against a charge of violating Regulation Fair Disclosure - claiming it violates companies' rights to free speech.
The enterprise-software maker raised the defense in its mid-September motion to dismiss a charge brought in June by the Securities and Exchange Commission (SEC), according to the San Francisco Chronicle.
"Regulation FD works an unprecedented and remarkably sweeping infringement of corporate speech," the Chronicle quotes the motion as stating.
Siebel did not return calls seeking comment.
Reg FD forbids public companies from disclosing business-related information to institutional investors and analysts before the public.
In June, Siebel became the first company ever charged twice by the SEC under Reg FD.
In the latest charge, the SEC said the company and two of its executives disclosed information to Wall Street before giving that information to the public.
In November 2002, Siebel paid a fine of $250,000 after the SEC said its CEO improperly released information at an investment-banking conference.
Andy Merrill, global MD of Edelman's financial communications practice, said if Siebel is successful, it could set a dangerous precedent in which a company's management could determine who gets to hear what kind of information and "then hide behind the First Amendment."
Howard Zar, partner and head of Porter Novelli's IR practice, said Siebel's contention "would have far greater credibility if it had followed Siebel's initial settlement and not before a second charge."