SEC Enforces Insider Transaction Rules As Boards Authorize Buybacks at Brisk Pace


1903 stock certificate of the Baltimore and Ohio Railroad (Photo credit: Wikipedia)

1903 stock certificate of the Baltimore and Ohio Railroad (Photo credit: Wikipedia

Insider buying or selling of shares is one of the most emotional and telltale communications messages a public company can send.

Last week, the SEhanded out charges against 28 officers, directors and major shareholders for violating federal securities laws requiring the prompt reporting of information about transactions in company stock.  In addition, six publicly traded companies were charged for contributing to filing failures by insiders or failing to report their insiders’ filing delinquencies.
Curiously, the SEC did not say whether or not those transactions were on the buy or sell side. But this is important stuff and a subject that many investors hold sacrosanct.
Some funds immediately sell if they see insiders are selling for anything other than “personal” reasons, such as sending a child to college. And other investors immediately buy when they see insiders buy, believing those insiders must know something positive about the future. The same usually holds true when companies initiate buyback programs.
A news release issued by the SEC September 10 said information about insider buying and selling gives investors an “opportunity to evaluate whether the holdings and transactions of company insiders could be indicative of the company’s future prospects.”
Granted, it is important to look at much more than insider transactions when evaluating a stock’s viability. But as Peter Lynch, who is still regarded as one of the greatest and smartest investors of all time, has said on numerous occasions: “Insiders may sell their shares for any number of reasons, but they buy for only one—they think the price will rise.”
So while it is not necessary in this blog to name names of those violators, as the SEC’s press release did (in case you want to know), 33 of the 34 individuals and companies cited agreed to settle the charges and pay financial penalties totaling $2.6 million.
“Using quantitative analytics, we identified individuals and companies with especially high rates of filing deficiencies, and we are bringing these actions together to send a clear message about the importance of these filing provisions,” said Andrew J. Ceresney, director of the SEC’s Division of Enforcement, in the news release.
There are usually no such communications issues when public company boards authorize buyback programs. Making a public announcement, usually via news release, is often one of the key reasons such programs are launched—to make a statement that one’s stock is undervalued and we’re not going to take it anymore.
In fact, according to an analysis by Barclays PLC as reported in the Wall Street Journal September 16, companies are buying back their own shares these days at the fastest pace since the financial meltdown, and companies with the largest buyback programs have outperformed the broader market by 20 percent.
Barclays’ head of U.S. equities strategy, Jonathan Glionna, as reported in the same article, said that among the reasons why companies do stock buybacks, “one is that it seems to work; it makes stocks go up.”

– Roger Pondel,


Ad Tech’s Implications for PR and IR

1101110321_400Los Angeles is an epicenter for all things trendy, so it should come as no surprise that the City of Angels is also a hotbed for “Ad Tech” or advertising technology companies. Ad Tech has surfaced as a formidable force in the marketing world, enabling advertisers to slice and dice data to prognosticate trigger points for consumers.

Indeed, advertising and technology have long been consummate bedfellows, but does the rise of the ad tech industry have implications for PR and, perhaps even, IR worlds?

The metrics used in ad tech seem relatively objective, while the variables that factor into the success of PR and IR are often subjective. And yet, PR and IR firms are consistently asked to measure success. It is a conundrum that will likely continue to thwart PR and IR firms with greater frequency, as metrics from contiguous industries, such as ad tech, dominate the collective consciousness of the marketing world.

There are certain variables that PR and IR folks use to gauge success, including media coverage, the number of new analysts covering a company, and attracting new followers on Twitter and LinkedIn. But again, in the ad tech world there is usually a direct correlation between a successful advertising campaign and sales. This isn’t necessarily true for PR and IR.

What is true is that setting realistic expectations apply to all industries, and if you can present a program with achievable goals, it shouldn’t matter what the data say, as long as they support the expectations set forth at the beginning of an engagement.

–  Evan Pondel,

Unblocking Writer’s Block

I enjoy blogging…really I do.  But sometimes, like now, I get writer’s block and can’t think of anything meaningful to say.  It’s frustrating, to say the least, but even worse when I’m staring at a blank screen trying to find the perfect opening sentence for an annual report shareholder letter, press release or earnings conference call script, especially when a client is awaiting my draft.Writer's Block 3

For someone who spends the majority of her day writing, writer’s block is like the kiss of death.  So it got me thinking about the best ways to unclog the brain.  A few ideas follow, but I’d love to hear your best advice in the comments section below.

  • Go for a walk, or just step away from your screen for a few minutes.  Focusing your mind on something other than putting pen to paper could free your mind and spur creativity.
  • Look at examples of work similar to what you need to write.  Sometimes seeing what someone else has done is enough to get that first word on a blank sheet of paper.
  • Brainstorm with colleagues.  Someone not as close to the task might come up with some good content to set you back on course.
  • Don’t be too hard on yourself.  Get that first draft going and worry about fine tuning it later.  Even those who have won writing awards don’t get it perfectly right the first time.  You’re in good company.
  • Try to understand why you’re blocked.  Purdue University recommends several “cures” for different types of writer’s block, including utilizing an outline to organize your thoughts.
  • In the words of John Steinbeck, as told by George Plimpton, “Pretend that you’re writing not to your editor or to an audience or to a readership, but to someone close, like your sister, or your mother, or someone that you like.”  This may help take away the pressure you’re putting on yourself.

Well, twenty minutes later and my writer’s block appears to be gone.  All it took was following the advice of Barbara Kingsolver, a popular author who is slated to receive the Library of Virginia Lifetime Achievement Award in October.  “Chain that muse to your desk and get the job done.”

– Laurie Berman,