For those who practically don’t care to whom or what they are linking to, it’s time for you to straighten up. In a new proposal of Securities and Exchange Commission, you could be held potentially liable legally because of the hyperlinks.
The issue have sprung from the fact that it’s possible that investors may be mislead by some information, and thus, their judgment or financial decisions may cause negative changes to the stock market. For example, if a public company decides to link to any of the pages of SEC, it could be interpreted as an endorsement to the information that is found in that hyperlinked page. With that, it may have profound effects on the judgments of financial investors.
There are some guidelines, though, that would blatantly put you in great jeopardy. First is when you have participation as to the content of the hyperlinked page. Second is when you express or imply the approval of such information.
Nevertheless, this proposal should be taken into the context of fraud. This doesn’t really affect the common belief you have about third-party information, especially when it comes to securities sales and offers. This is also expressed in the Securities Act, which also explains the nature of the hyperlink that would merit a company of a legal liability.
How to Settle the Issue
Keep in mind that this is still a proposal and thus need some approval from the Securities and Exchange Commission. Thus, there isn’t really much that you can do, except for the following things:
1. Provide disclaimer to your readers. This is to prevent the potential risk of confusing your readers, especially your investors, with the real worth of the information contained in the hyperlinked website.
2. Keep it out of focus when not too important. Another factor that’s going to be used by SEC is the physical presentation of the link: if it’s set in bold, colored differently from the rest, has larger fonts, or placed at the center. Any sign of prominence may mean that the information from this website has great weight.
