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Companies may soon be free to give interviews to Playboy without worrying about jeopardizing their initial public offerings. Sources said that the Securities and Exchange Commission is preparing changes to the so-called quiet-period rules, which limit what companies may say in the 45 days before issuing stock. The agency is expected this month to provide guidance permitting pre-IPO companies to reveal basic information about their business and their management philosophy in media interviews or on their Web sites during the quiet period, sources said. Google Inc. nearly had its IPO derailed because of an interview company founders Sergey Brin and Larry Page gave to Playboy in the run-up to the highly publicized offering. The SEC admonished Google for the interview, though it permitted the IPO to proceed in August. Providing forecasts The SEC also is debating whether to permit pre-IPO companies to provide forecasts, such as projected stock prices and revenue predictions, and to disclose additional historical data, such as order backlogs. Companies that take advantage of the rule changes must accept liability for any quiet-period statements. That means shareholders or the SEC could sue for fraud if a projection is found to have been made in bad faith or if its historical data were inaccurate. “Saying a company has an 18-month backlog of orders for widgets, and it turns out that is false, will be considered materially misleading,” the source said. The 25-day quiet period after the SEC approves a company’s IPO registration statement is expected to remain in force. Some securities industry lobbyists had pressed the agency to make it easier for independent investment analysts to produce reports during that post-registration quiet period. SEC officials also are considering other revisions to the quiet-period rules. These include shortening the pre-IPO 45-day quiet period to 30 days, and allowing companies making secondary and other follow-up stock offerings to disclose additional information. Sources close to the commission expect that public corporations will be permitted to provide potential investors with more information about financial developments during the 45-day quiet period. That is likely to include providing more detailed dividend notices and running product advertisements. In addition, the SEC is likely to allow eligible companies to respond to unsolicited inquiries from independent analysts who are not affiliated with their underwriters.

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