Dozens of small- and mid-cap companies have failed to comply with a Securities and Exchange Commission (SEC) deadline for them to file insider trading information on their websites, according to a survey by investor relations consultants Blunn & Company Inc.
The survey of 300 small- and mid-cap companies found that 11% had failed to meet the SEC's June 30, 2003 deadline. All of the companies surveyed are included in the Standard & Poor's Small-Cap and Mid-Cap indexes.
"Our surveys have shown time and again that public companies are not managing their corporate websites effectively, and in many cases their sites are in a state of neglect. That so many companies should fail to meet such a widely publicized requirement is really quite shocking," said Dominic Jones, head of Blunn & Company's online investor relations research and consulting practice.
Under the SEC requirements mandated by the Sarbanes-Oxley Act companies must post details of transactions by insiders on their corporate websites or link to individual filings or a list of them on a third-party site like the SEC's EDGAR database. However, a Blunn & Company survey on July 1, 2003 found that 22 out of 200 small-cap and 11 out of 100 mid-cap companies had not met the requirement.
An earlier survey by Blunn & Company of corporate governance disclosure on corporate websites found similar poor practices by small- and mid-cap US companies. That survey, released in April 2003, found that only 8% of these companies in the study had separate corporate governance sections on their sites, 6% posted codes of conduct and 8% published corporate governance guidelines online. By comparison, 44% of US large-caps in the same survey had corporate governance sections on their websites.
To assist companies, Blunn & Company has created a set of best practices for companies wishing to provide insider transaction information on their websites in formats that will make it easier for investors to obtain and use the information. The guidelines are available free online on the firm's professional development site.