Box 6.9

What is the U.S. Securities and Exchange Commission and how could it affect the timing of the release of trial results?

The U.S. Securities and Exchange Commission (SEC) was created during the Great Depression in 1934 primarily to protect investors. The agency works to enforce laws that require publicly traded companies listed on the New York Stock Exchange to tell the public the truth about their businesses, including products they are developing and the risks involved in investing in them.*

When a research trial is testing an experimental product that is owned by a publicly traded (commercial) company, the company has legal obligations to publicly inform its stockholders of any major findings about the product, whether good or bad news.

The SEC rules state that companies must inform the public within 24 to 48 hours of the trial findings becoming known, to prevent “insider trading” of stocks or securities. However, in cases of sudden closures or unexpected findings, some trial sponsors have been able to negotiate directly with the SEC to delay the public announcement of study results, and thereby gain time to notify Ministry of Health officials or other trial stakeholders directly before they hear about it on the news. (See Chapter 5 for more information.)

For this reason, some trials now strategically time their DSMB meetings to take place on Fridays. This way, if any major change or trial closure is recommended, the trial team will have the entire weekend to notify stakeholders and implement an emergency dissemination plan on Monday morning. This works because the SEC time requirement that the public be informed within 24 to 48 hours excludes Saturdays and Sundays, since the New York Stock Exchange is closed and no trading of stocks can occur over a weekend.