CORPORATE WEB SITE DISCLOSURE AND RULE 10b-5: AN EMPIRICAL EVALUATION

Previous writing has speculated the companies might employ Web site disclosure practices that incrementally increase corporate liability risk. The study presented reviews the contents of over 400 corporate web sites to determine whether such potentially risky practices are extant on the Internet, an...

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Bibliographic Details
Published in:American business law journal 1999-06, Vol.36 (4), p.531-578
Main Authors: PRENTICE, ROBERTA, RICHARDSON, VERNON J., SCHOLZ, SUSAN
Format: Article
Language:English
Subjects:
Aircraft carriers
Annual reports
Commercial law
Disclosure
Dividend reinvestment plans
Internet
Investments
Liability
Natural gas distribution
Securities regulations
Shareholder relations
Stockholders
Studies
Web site design
Websites
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Summary:Previous writing has speculated the companies might employ Web site disclosure practices that incrementally increase corporate liability risk. The study presented reviews the contents of over 400 corporate web sites to determine whether such potentially risky practices are extant on the Internet, and of so, to what degree. The statistics indicate that the most frequently presented items are documents vetted for presentation elsewhere: financial press releases, quarterly reports and annual reports, or links to stock price information and the SEC EDGAR database. In other words, the more commonly found items appear to be fairly innocuous. However, web site arrangements which may court additional liability were also identified, albeit with lesser frequency. Some of these potentially troublesome practices are due to the nature of the information provided; others are related tot he management and presentation of otherwise benign information. Overall, 5 extant web site practices were found that may increase companies' litigation risks.
ISSN:0002-7766
1744-1714
DOI:10.1111/j.1744-1714.1999.tb00263.x