Other than Reg FD, is there a law that restricts the bankers and attorneys who are on the deal from questions?

Question

For example, I understand about insider trading laws and any breaches of confidentiality, but just curious that in Europe and Canada the attorneys and investment bankers can address questions from research analysts looking for clarification or additional information, but that doesn't seem to be the case here in the US. So, I was curious, other than Reg FD is there a specific law that restricts them (is there a quiet period during a M&A deal)?

Answer 1

The US does have a quiet period. You can put out a "red herring" prospectus, but otherwise silence is required. It is important to understand that in the United States, if a broker even writes their phone number for you to call them on a prospectus, or a smiley face, they have altered it. It is now part of the disclosure even if the company did not intend it. It can be used in court. The smiley face especially would imply some form of approval and would impute a recommendation by the management, not just the broker.

Fraud can occur by accident under the US Securities laws and so people are extremely cautious about any disclosures not in writing and filed first with the SEC. Reg FD killed access to management by exempt persons such as analysts and accredited investors. Fraud under the securities laws does not require any form of intent. It need not even be a falsehood in the strictest sense.