Disclosure Advisory Board Advocates Full Disclosure of All Public Company Shareholders

    Second white paper from esteemed group calls for transparency of
    shareholder identity to make disclosure a two-way street

    NEW YORK, June 4 /CNW/ -- The Disclosure Advisory Board -- a 15- person
council of leaders in the corporate, regulatory, investor, reporting and
academic communities organized by PR Newswire -- announced today
recommendations for shareholder disclosure, voicing its concern that the
concealment of shareholder identity is creating a disorderly market in the
    (Photo:  http://www.newscom.com/cgi-bin/prnh/20070604/NYM101 )
    (Logo:  http://www.newscom.com/cgi-bin/prnh/20000306/PRNLOGO )
    In a newly published white paper, "Shareholder ID:  The Resounding
Silence of Non-Disclosure," the Board calls for investors to follow emerging
global best practice, and reveal their identities, and for regulators to
re-examine existing shareholder disclosure rules, outdated by new derivative
investments. Further, the Board contends that lack of shareholder identity
disclosure is negatively affecting the U.S. capital markets by allowing
destructive behaviors to go unchecked, putting the U.S. at a competitive
disadvantage on the world stage.
    The white paper, the second in a series from the Disclosure Advisory
Board, was published in conjunction with the largest gathering of investor
relations professionals at the National Investor Relations Institute's (NIRI)
annual conference in Orlando, FL, June 3-6.
    "Vibrant equity markets depend on the active participation of investors.
However, certain practices in the U.S. send mixed signals and put many
investors at a disadvantage," said Mark Hynes, chairman and spokesperson of
the Disclosure Advisory Board, and managing director of Global Investor
Relations Services for PR Newswire.  "Non-disclosure on the part of investors
is not just an issue for public companies. It creates a disorderly market for
all parties involved.
    "Yet it is the company that bears most of the risk.  Lack of investor
information exposes shares to potential price manipulation from unknown
holders with unknown intentions, increasing a company's vulnerability to
takeovers and proxy fights.  This cloak of investor secrecy also makes
companies susceptible to the agenda of hedge funds and other short-term
holders who may provoke actions not favorable to longer-term business
    "Consequently, we believe it's time for undisclosed U.S. investors to
break their resounding silence. We're calling for shareholder identity
transparency to make disclosure a two-way street.  In an era of 'right to
know' advocacy, U.S. public companies should have the right to know who their
shareholders are."
    In reaching its opinion on shareholder disclosure, the Disclosure
Advisory Board noted the following concerns which it believes must be resolved
in order to bring a level playing field back to the U.S. capital markets:

    (*) Lack of shareholder knowledge -- as well as legal or regulatory
      recourse -- places companies at considerable risk.
    (*) Market practices inhibit disclosure professionals from communicating
      directly with certain investors.  As shareholders cry out for majority
      voting or for a "say on pay," the embargo on direct communications with
      investors is disadvantaging companies and corporate boards of directors,
      and even shareholders themselves.
    (*) Lack of investor identity and direct investor communications contribute
      to practices such as empty voting which, in addition to affecting the
      outcome of directors' elections, may also bestow unfair advantages on
      some investors who may even hold negative positions.
    (*) The growing practice of "borrowing" shares enables undisclosed investors
      without economic interest or with limited stakes to have an outsized say
      in elections that affect issuers and other investors.  Once the
      borrowers cast votes to achieve their objectives and return the shares,
      they leave the other investors and public companies to contend with the
    (*) Companies have been under increasing pressure to disclose information
      simultaneously since Regulation Fair Disclosure in 2002, yet are doing
      so to an audience that may only be partially known to them. This makes
      effective and targeted communications difficult.
    (*) Glaring paradoxes exist between capital markets in the U.S. and those
      abroad.  For example, foreign issuers can find out more about their U.S.
      investors than U.S. issuers can find out about U.S. investors.  Left
      unsettled, these paradoxes could thrust U.S. capital markets out of
    (*) Newer financial products and practices, such as the growing popularity
      of cash-based derivatives, enable investors to aggregate shares without
      disclosure obligations to issuers or other market participants. The
      prevalence and magnitude of this activity has had a resounding impact on
      the markets.

    William A. Relyea, managing director, H.C. Wainwright & Co., Inc. and a
member of the Disclosure Advisory Board, commented, "The end result of this
undisclosed shareholder syndrome is it allows investors with significant
capital backing a certain anonymity that enables them to make market-roiling
moves, particularly in individual stocks. This often has an adverse impact on
the company, its stockholders, as well as the employees and others who depend
on the services the business provides."
    Hynes concluded, "The U.S. shareholder identity problem calls for
immediate action. Shareholder non-disclosure is creating a disorderly market
in the U.S., making it less attractive than investment venues in other parts
of the world.
    "It is time for undisclosed shareholders to break their silence and
announce who they are. Collective silence on this matter is no longer an
    The complete white paper, the second published by the Disclosure Advisory
Boar, is available at http://disclosureadvisoryboard.mediaroom.com/.  To read
Mark Hynes' blog, Transparency Matters, go to

    About the Disclosure Advisory Board
    The Disclosure Advisory Board was brought together by PR Newswire in June
2006 to assess and comment upon the state of corporate disclosure and
transparency. Comprised of 15 individuals with a combined 450 years of
regulatory and compliance experience, the aim of the Board is to debate
current disclosure and governance issues, and based on the discussions,
propose "best practices" for improved financial and corporate reporting. The
Disclosure Advisory Board believes that communication -- disclosure and
transparency -- lies at the heart of winning back public consent.
    Members of the panel are: John Bierbusse, corporate director and retired
equity research analyst at A G Edwards; Janet L. Fisher, partner, Cleary
Gottlieb Steen & Hamilton LLP; Valerie Haertel, VP/director of investor
relations, Medco Health Solutions, Inc.; Jerry Hostetter, VP/director of
public relations and investor relations, Smithfield Foods Inc.; Deborah Kelly,
partner, Genesis Inc.; Mark Hynes, managing director of Global Investor
Relations Services for PR Newswire; Jack L. Kelly, co-head, industrial
research team, Goldman Sachs; Mary Beth Kissane, president and founder,
Corporate Perception Research; Sam Levenson, SVP Investor Relations, Sony
Corporation of America; William A. Relyea, managing director, H.C. Wainwright
& Co., Inc.; Diane Salucci, SVP, Bear Wagner Specialists LLC; Martin Shea,
EVP, investor relations, CBS Corporation; Kurt Stocker, member of the board of
directors of NYSE Regulation, Inc. and chairman of the New York Stock Exchange
Individual Investors Advisory Committee; Anna Sussman, director, Investor
Relations and Corporate Communications, Pharmion Corporation; Louis M.
Thompson, Jr., partner, Genesis Inc., and managing director, Kalorama
Partners, and former CEO, president and board member of the National Investor
Relations Institute.

    About PR Newswire
    PR Newswire Association LLC (http://www.prnewswire.com) provides
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    Rachel Meranus, Vice President, Public Relations, PR Newswire at
212.282.1929 or rachel.meranus@prnewswire.com

For further information:

For further information: Rachel Meranus, Vice President, Public
Relations,  PR Newswire, +1-212-282-1929 or rachel.meranus@prnewswire.com Web
Site: http://www.prnewswire.com                 

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