Friday, November 22, 2013

Securities and Exchange Commission v. Siebel Systems, Inc. case brief

Securities and Exchange Commission v. Siebel Systems, Inc. case brief summary
384 F. Supp. 2D 694 (2005)


CASE SYNOPSIS
Plaintiff Securities and Exchange Commission (SEC) sued defendants, a corporation, its chief financial officer (CFO), and a senior vice president, alleging violations of Regulation FD, 17 C.F.R. § 243.100 et seq., § 13(a) (15 U.S.C.S. § 78m(a)) of the Securities Exchange Act of 1934, and S.E.C. Rule 13a-15. Defendants moved to dismiss.

CASE FACTS
The SEC claimed that defendants violated Regulation FD because the CFO disclosed material nonpublic information about the corporation's business activity levels and sales transaction pipeline at private events attended by institutional investors; the CFO's positive comments allegedly contrasted with public statements by the corporation's chief executive officer (CEO).

DISCUSSION

  • The court found that the alleged disclosures were neither material nor nonpublic, as the substance of the CFO's private statement was equivalent to the information previously disclosed by the CEO. 
  • The fact that the CFO's statement was in the present tense while the CEO's statement was in the past tense did not cause the statements to materially differ. 
  • The CFO's statement that the transaction pipeline was growing or building added nothing to the CEO's statement that an increase in revenues was projected based in part on an analysis of the pipeline. 
  • The § 13(a) and Rule 13a-15 claims failed as well; the SEC made only conclusory assertions that the corporation failed to maintain controls designed to ensure proper disclosure of nonpublic material information.

CONCLUSION
Defendants' motion to dismiss was granted.

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