The Securities and Exchange Commission has lost an enforcement case against Siebel Systems over the issue of disclosing material information to the market.

Regulation Fair Disclosure (Reg FD) was the legal source of the SEC 's argument. Reg FD stops companies disclosing material information to securities analysts that is then witheld from the public.

In the case, Siebel argued that the information disclosed to the public and the analyst community had been the same, except for small linguistic differences.

The SEC however felt the publicly available spin had been downbeat, whilst the analysts had been more upbeat.

Following an exhaustive process of comparing the disclosures word for word, Siebel won. The New York Federal judge commented the SEC placed "unreasonable burden on a company's management and spokespersons to become linguistic experts or otherwise live in fear of violating Regulation FD should the words they use later be interpreted by the SEC as connoting even the slightest variance from the company's public statements.

Siebel had previously had an encounter with the SEC over Regulation FD which resulted in a $250,000 settlement.

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