Osisko Gold Royalties Ltd - Corporate Presentation, March 2024
Sullivan & Worcester Social Media for IR
1. The Use of Social Media
in Investor Relations
Securities Law Issues
Howard E. Berkenblit
Sullivan & Worcester LLP
June 4, 2013
2. What is Regulation FD?
“Fair Disclosure”
› SEC’s effort to make information
available to ALL investors equally
without selective disclosure
Prohibits disclosure by certain
persons acting on behalf of an
issuer of material nonpublic
information to particular
individuals without simultaneous
disclosure to the investing public
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3. What is “Material” Information?
No bright line test
Substantial likelihood that a reasonable shareholder
would consider it important in making an investment
decision
Substantial likelihood that a reasonable investor would
view it as having significantly altered the total mix of
information available
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4. What is “Material” Information? - Cont’d
Qualitative and quantitative
determination
Can be direct or indirect (a wink or a
nod can be as expressive as words)
Mosaic Theory - Can’t disguise by
breaking into pieces, but a company
can disclose information which is
not material, even if it helps the
other party complete a “mosaic” of
information that, taken together, is
material
Reaffirming information can be
material
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5. Regulation FD Applies to Communications by:
Senior officials (executive officers and directors)
Investor relations and public relations personnel
Any other officer, employee or agent who regularly
communicates with securities market professionals or
security holders
Can’t direct someone not covered to make disclosure as
a way around
Person who communicates in breach of a duty to issuer
not considered acting on company’s behalf
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6. Regulation FD Applies to Communications to:
Analysts
Broker-dealers and their associated
persons
Investment advisers and certain
institutional managers and their
associated persons
Investment companies and hedge
funds
Security holders under circumstances
in which it is reasonably foreseeable
that such persons would purchase or
sell on the basis of the information
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7. Regulation FD Does Not Apply to Communications to:
Persons who owe the company a duty of trust or
confidence (e.g., attorney, investment banker, or
accountant)
Persons who expressly agree to maintain the
information in confidence
Employees (deemed to be part of the company)
Persons with whom the company communicates in
the ordinary course (e.g., customers and suppliers)
Relating to most registered (but not private) securities
offerings
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8. How are Subject Communications Made Available
to the Public?
Methods are flexible as long as reasonably designed
to effect broad, non-exclusionary distribution of
information to the public
› Press Release
› Form 8-K (can be “filed”
or “furnished”)
› Disclosed during a
pre-announced, open
conference call
› Website and social media (described later)
› Combinations provide maximum protection
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9. What are the Potential Penalties for a Violation of
Regulation FD?
SEC enforcement action
› Disclosure rule, no liability for fraud
solely as a result of failure to comply
with Regulation FD
› Cease and desist order
› Civil action seeking injunction or
penalties, but no private right of action
› The existence of appropriate disclosure
policies adopted by company may
affect SEC decisions to pursue
enforcement actions
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10. How Does Social Media Fit in with Regulation FD?
Not “traditional” Regulation
FD disclosure method
2008 guidance allowed
website posting, but subject
to conditions
2013 report allows social
media, subject to the same
conditions
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11. 2008 Website Guidance
Website is “recognized channel of distribution”
Posting on the website disseminates the information in a
manner making it available to the securities marketplace
There has been a reasonable waiting period for investors
and the marketplace to react to the posted information
Information initially posted on a website (but not
elsewhere) is “public” if:
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12. 2008 Website Guidance (cont’d)
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Recognized channel of distribution is a factual question
› How closely is website followed?
› Has company taken steps to direct public to look there as a
primary source of information?
› Companies, especially small and mid-sized, need to establish a
pattern of directing the public there and actually posting
› Early and often?
13. 2008 Website Guidance (cont’d)
Dissemination
› Is the information prominently placed or in a location
where such disclosures are known to be routinely
made?
› Is it easily accessible?
› Is a RSS feed or similar push technology available?
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14. 2013 Social Media Report
Guidance in the form of an enforcement report
(but no penalties imposed)
Resulted from enforcement investigation of Netflix
CEO posting (arguably) material information for the
first time on his personal (but public) Facebook
page
Neither he nor Netflix had
previously used, or indicated
they would use, this Facebook
page to disclose material
information
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15. 2013 Social Media Report (cont’d)
SEC report notes that social
media disclosures are
subject to Regulation FD
Report merely extends
2008 website guidance to
social media – no “new”
guidance
Some companies
announcing “laundry list”
approach – not clear this is
sufficient
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16. Other Securities Concerns with Social Media
General antifraud liability under Rule 10b-5
Character limits – are links enough?
› Forward looking statements warnings
› Non-GAAP financial measure reconciliations
Liability for content in third party hyperlinks
Liability for imbalanced hyperlinks, posts
Perpetual republishing of information
Not well integrated into Regulation FD disclosure
policies and other company policies
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17. Other Securities Concerns with Social Media
(Cont’d)
Securities offerings
› “Gun jumping” concerns for
public offerings
› “General solicitation” concerns
for private placements
JOBS Act may help
Shareholder meeting proxy
solicitations
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18. Other Legal Considerations
Employment law issues regarding social media policies,
actions in response to postings
Confidentiality/intellectual property exposure, leaks
Privacy
Harassment
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19. General Best Practices for Securities Law
Compliance
Adopt/update corporate policy designed to deal with
disclosure of material information and Regulation FD,
including social media
Designate, and limit, individuals who are authorized to
speak on behalf of the company, including on social
media outlets
Identify in advance who would need to be involved in
corrective disclosure
Know what is public both from the company and from
the outside
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20. General Best Practices for Securities Law
Compliance (cont’d)
Integrate social media into any
company policy related to
communications/IR, and
continually review for updating
Educate employees about
Regulation FD, social media issues
Consider quarterly “quiet
periods”
Use confidentiality agreements
Maintain consistency and
patterns
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