2nd Circuit

When Siebel Systems Inc. agreed to pay $250,000 to settle a civil suit for violations of Regulation Fair Disclosure (Reg FD) in November 2002, the software company believed it had made its peace with the SEC's controversial selective disclosure rule. This rule prevents corporations from disclosing "material, nonpublic information" to analysts before making the information available to the public.

But it was not to be.

But Daniels didn't see it that way. He concluded that the private statements did not add anything material to the company's public statements.

"Siebel tells companies that as long as their private statements don't contradict or significantly alter their public pronouncements, they're OK," says Andy Beck, a securities partner at Torys in New York.

However that may be, the decision may well have contributed to Siebel's recent good fortune: on Sept. 12, less than two weeks after Daniels released his decision, Oracle announced that it had agreed to buy Siebel for $5.8 billion.


Julius Melnitzer

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