NEW YORK: Siebel Systems on Tuesday became the first company ever charged twice by the Securities and Exchange Commission under Regulation Fair Disclosure, or Reg FD.
The SEC filed suit in federal district court in New York against the software company and two of its executives for disclosing information to Wall Street before giving that information to the public.
The 4-year-old Reg FD seeks to eliminate "selective disclosure" by forbidding a public company from disclosing business-related information to institutional investors and analysts before the public.
Siebel is also charged with violating an SEC rule that requires stock issuers to maintain proper disclosure controls and procedures. The agency said this is the first case charging violation of that rule.
The company, its CFO Kenneth Goldman, and its former SVP for IR and corporate development, Mark Hanson, are expected to face permanent injunctions and unspecified civil fines from the SEC. Hanson remains a senior officer in the company. The commission has been investigating the company for more than a year.
The lawsuit alleges that Hanson disclosed confidential information during two private events in New York, one with an institutional investor and the other with investment firm Morgan Stanley.
In November 2002, Siebel paid a civil fine of $250,000 to the SEC after it accused Siebel of violating Reg FD when the company's CEO spoke at an investment-banking conference.
The new charges also allege that Siebel violated the cease-and-desist order that stemmed from that settlement.
In a statement Siebel denied the newest allegations.
"After an extensive internal review, the company concluded that no violation of Regulation FD occurred," the statement said. "The company has meritorious defenses to the lawsuit."
Steve Diamond, senior PR director at Siebel, said the company had no further comment.
San Mateo, CA-based Siebel is a leader in business and CRM software. Founded in 1993, it posted revenues of $1.35 billion in 2003.