8.5.2 Informal Statements and Websites

Informal statements by officials and officers of an issuer, even those not taking place during the course of a bond financing, can also be considered disclosure or “speaking” to the market. Public statements, press releases, website postings and statements to the press and governing board proceedings are all widely and publicly available and are often monitored by rating agencies, investor analysts, and other market participants. “Newsworthy” developments, such as natural disasters or the emergence of financial setbacks or challenges, present heightened risk. Officials and officers of issuers should take care not to make unconsidered public statements that may provide only a partial story or distort investors’ perception of the issuer’s financial strength. Further, issuers should always consider whether informal statements should be accompanied by other material information to avoid being misleading.

Issuer websites can be useful tools for providing information, but they present unique risks. First, a website may facilitate the ongoing and continuous availability of stale or outdated information about the issuer, and even information that is no longer online may be accessible to researchers. Second, there is the potential for the simultaneous availability of inconsistent information. Third, websites facilitate routine “publication” of vast amounts of information that is available to the investing public and may not have been reviewed from the perspective of the issuer’s compliance with securities laws.