I read a few posts that dismissed my argument that press releases still serve an important function: Complying with regulatory requirements for disclosing any news that could affect an organization’s share price. One of these comments, I recall, noted that failure to comply would be a small price to pay in return for the benefits that accrue to companies that switch their disclosure over to the more authentic human voice of a blog.

That’s an irresponsible position, at best. In the US, the Securities and Exchange Commission has companies under a microscope following the abuses of Enron, Tyco, WorldComm, and others. Martha Stewart went to jail for a minor violation. The grief a company would experience could be considerable if the SEC perceived that it provided pertinent information to one party before another. There’s a name for that. It’s called “insider trading.” Executives could go to jail. Investor confidence could plummet. That hardly seems like a trifling issue.

Now, with the proliferation of investment-focused blogs, commentators are noting that there could be a fine line between current news and insider trading. I’ve never heard of the Prudent Press Agency, but the agency has an interesting article today addressing the potential fallout from insider trading on blogs. The piece quotes David Jenys of SystemTradingBlog.com:

What regulators may be scared of is the potential for this new media to leak stock price sensitive news to the market. Just think about it, thousands of trading blogs and hundreds of active bloggers from fortune 500 companies making posts every day. These bloggers talk about everything from their private lives to the inner working of the businesses. Sometimes this news is unreleased to the market and can potentially tip traders to buy or sell stocks. This is where the danger lies.

And Jenys isn’t talking about the SEC. He’s based in Australia.

Precisely. The idea behind the regulation is to ensure all audiences have access to the information at the same time so nobody has an unfair advantage. Services offered by the major press release distribution companies ensure that a press release gets to all the markets at the same time, something you could never do with a blog—at least, not yet. This use of the lowly press release is one reason authorities like the SEC consider a press release the final, authoritative statement from an organization.

Don’t dismiss press releases just yet. Blogs are great, but they can’t do everything.