Thursday, May 3, 2001

Schuler takes
no chances with
disclosure law

A recent Schuler Homes Inc. filing with the U.S. Securities and Exchange Commission raised eyebrows and questions about SEC requirements. Was Schuler doing more than what was required to satisfy the spirit of a rule? Was it merely a case of too much information?

The February filing contained only a news article about Schuler's earnings and its then-pending merger with Western Pacific Housing, written by another Honolulu daily newspaper.

But who files a news article with the SEC, and why would the SEC require a company to include news stories in its filings?

"With Regulation Full Disclosure enacted in the Fall of 2000, there may be situations where we need to file reports or articles on the company to ensure that they're disseminated to everyone," said Schuler Homes Executive Vice President and Chief Investment Officer Pam Jones.

"Whenever there was anything written about the company, especially with regard to the merger, we filed (with the SEC)," she said.

"As a public company it's important that we comply with the rules."

SEC Deputy Director of Public Affairs John Heine said while he couldn't comment on the specific filing, "Regulation FD has been a big topic here -- but it has to do with selective disclosure.

"It requires any company that communicates nonpublic material and information to selected groups -- not including the press, by the way -- to at the time of that communication or before, make that information available to the markets and general public as well."

Heine said the rule includes top management within the company talking to analysts or investors "who could reasonably be expected to trade on the basis of that information."

Business law attorney Dan Deveney, of Cades Schutte Fleming & Wright, said the SEC rule does not require all company developments to be disclosed, only certain events, which would include a merger.

As for including news coverage in SEC filings he said, "I guess there would be circumstances where it might be appropriate, but I would think in the ordinary course of things it wouldn't be required."

Erika Engle is a reporter with the Star-Bulletin.
Call 529-4302, fax 529-4750 or write to Erika Engle,
Honolulu Star-Bulletin, 500 Ala Moana Blvd., No. 7-210,
Honolulu, HI 96813. She can also be reached

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