selectivedisclosure

Selective disclosure is the practice of sharing material nonpublic information about a company or issuer with a limited audience—such as analysts, institutional investors, partners, or executives—before that information is made available to the general public. Because the information is material and nonpublic, it could influence investment decisions if made public, and its leakage can affect market prices and fairness.

Regulation FD in the United States, administered by the Securities and Exchange Commission, prohibits publicly traded companies from selectively disclosing material information to favored audiences unless the information is simultaneously disclosed to the public. The rule aims to ensure a level playing field for investors. Violations can lead to SEC enforcement, with remedies including disgorgement and penalties. In practice, firms respond by issuing broad public disclosures—press releases, SEC filings, or widely disseminated postings—and by holding investor conferences that are open to the public or conducted with simultaneous broadcasting. An inadvertent disclosure can be cured by prompt public dissemination.

Outside the U.S., many jurisdictions have rules intended to ensure equal access to material information, though the specifics vary. Selective disclosure may also refer more generally to communications with insiders or strategic partners outside regulatory contexts and can raise concerns about insider trading and corporate governance.

To minimize risk, companies typically maintain written disclosure policies, use public channels for announcements, and execute disclosure plans that document timing and content for press releases and financial disclosures.