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SEC rules not OK

The globalization of the securities markets can put issuers and underwriters in breach of us law without their realizing it. And journalists can be the unwitting bearers of illicit news. Peter Lee asks if the SEC is about to make some long overdue changes.

In mid-May, Salomon Brothers invited journalists to a briefing by Impress Metal, a newly-formed European canning business created through a management buyout led by equity investor, Doughty Hanson.

The briefing was scheduled for the River Room of the Savoy Hotel at 12.30pm on May 16. There was considerable interest. The single B-rated company was due to sell a Dm200 million Eurobond the following week, the third in a recent series of high-yield European corporate bond issues. Like its predecessors, the deal carried a 144A option for sale in the US.

No sooner had journalists put the date in their diaries than they received a follow-up letter. Everything said at the press conference was to be embargoed. Nothing could be published before the following Tuesday May 20, the launch day for the bond. Worse followed. On the morning of the planned news conference, Salomon Brothers' public relations department telephoned reporters to tell them, with many apologies, that the event had been cancelled.

Fortunately, journalists with a sudden hole in their diaries had another interesting engagement that day. The administration of the City of Moscow was celebrating its 850th anniversary at a conference hosted by Sachs Associates and Bloomberg on new opportunities in finance, investment and trade.

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