The SEC’s pre-holiday gift to AOL..
Forget about the usual boring office gift exchange where you wind up with a $25 gift certificate to some restaurant you’d never set foot in. The SEC has decided to give AOL (AOL) and, by extension, Google (GOOG) something much more valuable: it’s the gift of silence.
Yesterday, five separate Confidential Treatment orders (in SEC lingo, they’re called CT-ORDERs) were filed by AOL, or at least filed in response to requests by AOL to keep information in their filings under wraps. It’s been over two years since we last footnoted about CT Orders, so we’re not sure if the SEC now keeps stats on how many are requested vs. how many are granted, though we have a call in to ask and will update when/if we get an answer. (See below for update.)
One of things that’s particularly frustrating about these sorts of filings is that while the SEC began making their existence known several years ago, you really have to dig through past filings to find out what exactly is being kept secret. And even then, it’s not exactly clear.
Take this one (pdf) for example. While the filing lists the 11 exhibits that are subject to confidential treatment, you actually have to go back to the filing (in this case a Form 10-12B) and look for the exhibits, which don’t seem to be attached to the original filing, which means you know no idea what’s worth the hush-hush treatment. But with this CT-Order (pdf), which refers to exhibits in this 10-Q that AOL filed back in August, you can see that this request is related to AOL’s “Interactive Marketing Deal” with Google. Our friends at Business Insider have written about this a bit and picked up on our tweet yesterday when we first spotted this in the filings.
A quick search of the filings shows over 1,500 CT-Orders have been granted over the past year. Now some of those probably are real secrets in the true sense of the word. The type that might get Wikileaks juices going. But it’s hard to imagine that most of them aren’t things that investors in these companies really have a right to know. Which makes this nothing more than a gift from the SEC — one far more valuable than a $25 gift card.
Update: We heard back from the SEC, and a spokesman says the agency has received about 1,500 requests a year over the past five years. It has granted about 95% of those. Happy holidays, indeed!