Those of you who have Stephen Schwarzman’s “anonymous” blog—“Secrets with Stephen”—bookmarked may have noticed a drop-off in dish. No speculations concerning the how’s and why’s of Henry Kravis’s new puppy, Mr. Barky Von Schnauzer, and his recent “operation.” No stalkerishly in-depth posts about Sam Zell’s wife getting her dry cleaning done. Not even any thinly veiled accounts of having dinner at the home of someone sounding suspiciously like Kohlberg, who served a sea bass that Stephen felt “left something to be desired.” What’s up, you might’ve wondered to yourself. Well, it could have something to do with the fact that Schwarzman received a note from Blackstone IT last week informing him that they’d been keeping track and found “an average of 4.5 hours a day on something called secretswithstephen.blogspot.com to be inappropriate use of a company computer” or it could be because Blackstone is currently in its “quiet period.”
Like all things evil, the time during which a company like Blackstone is advised by its lawyers to stay mum can be traced back to the SEC and religion. It starts when a firm registers an IPO with the Commission and (typically) lasts 40 days after the offering. During this time, the only business statements by company and its people are to be written in the prospectus.
Sounds kind of lame, right? Especially for a guy like Schwarzman, who’s noted in the past that his favorite way to blow off steam is a little coffee klatsch with the girls. The Economist thinks so too. It argues that instead of achieving its stated goal of protecting investors, the result is “unequal access to information,” because if you’re an investor with the connections to meet with top execs and bankers, you’ll get a better picture than the peons (read: the public) will get from newspapers and the internet.
Although the SEC slightly altered the rules a bit two years ago, giving executives permission to talk to the media, they still required the remarks to be filed with them, making them subject to the same scrutiny as anything else in the prospectus. In other words, the grand gesture was no gesture at all (and so very typical of the SEC. The scamps.)
In Europe, the so-called QP does not exist and Economist thinks we should take steal a page from their playbook. We say, if you’re not hurting anyone, do what you want. But is the E possibly doing this for more selfish, epicurean reasons?
It is not only Mr Schwarzman who is keeping his mouth shut. Kevin Davis, chief executive of Man Financial, a brokerage firm which is part of the Man Group, cancelled a recent lunch with The Economist after his firm announced an IPO that may raise even more than the $4.5 billion for which Blackstone is hoping.
Nobody gets in the way of The Economist and a $34 Cobb Salad. And the sooner the SEC learns that, the better. For all of us. (Plus, we're pretty sure Schwarzman's reticence, re: Tools of the Trade yesterday had something to do with this whole thing, too. And you know the old boy is dying to weigh in; we've heard his thoughts on sugar-free Red Bull before.)
Turn up the volume [The Economist]