Sep

26

From SECLaw.com:

I recently represented a sales trader who received a Wells Notice, alleging that he had violated the rules of fair practice by "url guessing." It seems that a public company was not particularity concerned about the publication of its earning releases, and numbered them sequentially - the press release for the first quarter ended in "1", the release for the second quarter ended in "2", and so on. In September, before the release of the third quarter earnings, analysts at the firm tried to find the press release - and they changed the URL of the second quarter press release URL from a "2" to a "3". Much to everyone's surprise, the third quarter press release appeared in the browser.

Analyst told sales trader, sales trader told customer, customer purchased. NASD investigation ensues, and we successful argued that "url guessing" was an accepted practice in the Internet age, that the issuer had actually released its earnings by posting the release in an unprotected portion of their web site.

While it is unclear if the NASD agreed, we received notification, after a receipt and review of the Wells Submission, that the NASD had decided not to proceed with an enforcement action.


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