Thus, the SEC explained in the Proposing Release: "To make clear the scope of the Regulation, paragraph (b) of Rule 100 expressly states that the Rule does not apply to disclosures of material information to persons who are bound by duties of trust or confidence not to disclose or use the information for trading.
On April 2, 2013, the Securities and Exchange Commission said companies can use social media to disseminate information if certain requirements are met.
[6] The rule only applies to certain groups such as securities market professionals and shareholders, which allows the company to continue providing necessary information to business partners.
[7] Before the 1990s, most individual investors followed the progress of their stock holdings by receiving phone calls from their broker, by reading annual or quarterly reports mailed to them by the company, by reading news in newspapers or financial publications, or by calling the company with questions.
Most investors relied primarily upon full service brokers, such as Merrill Lynch, for trading advice.
Large institutional investors, accustomed to benefiting from selectively disclosed material information, fought vigorously against the proposed regulation.