Lawrence Polizzotto was the head of investor relations for First Solar Inc., the manufacturer and seller of solar modules. First Solar also designed, constructed, and sold complete solar power systems. Its common stock was registered with the SEC pursuant to the Securities Exchange Act, and its stock traded on the NASDAQ. Polizzotto was authorized by First Solar to speak on its behalf to investors, analysts, and other securities professionals. In June 2011, First Solar received conditional commitments from the U.S. Department of Energy for loan guarantees of approximately $4.5 billion relating to three separate First Solar projects. The loan guarantees were important to First Solar because they would allow the company to receive guaranteed low-cost financing from the federal government. However, each of the guarantees was conditioned upon First Solar meeting several requirements prior to September 30, 2011. On September 13, 2011, Polizzotto attended an investor conference with First Solar’s CEO. During the conference, First Solar’s CEO publicly expressed confidence that the company would receive all three loan guarantees. On September 15, 2011, Polizzotto and several other executives learned that the DOE had decided not to provide a loan guarantee with respect to one project, that is, the Topaz project. The group of employees responsible for public disclosure regarding the DOE loans, including Polizzotto and one of First Solar’s in-house lawyers, began discussing how and when the company should disclose the loss of the Topaz loan guarantee. When Polizzotto arrived at work on the morning of September 21, he knew the Topaz press release had not yet been issued, and found out shortly thereafter that it would not be issued until the following morning. Nevertheless, he drafted several Topaz-related talking points, which he and a subordinate investor relations employee delivered to securities analysts and investors with whom they spoke that day. The talking points indicated that there was a lower probability the company would receive the Topaz guarantee. In addition, in certain discussions, Polizzotto told at least one analyst and one institutional investor that if they wanted to be conservative, they should assume First Solar would not receive the Topaz loan guarantee. 

Later that day, First Solar executives discovered that Polizzotto had disclosed to 20 sell-side analysts and institutional investors that First Solar would not receive the loan guarantee from the DOE. The next day, First Solar finished its plans regarding the Topaz press release and issued it prior to the opening of the market on September 22. The company’s stock opened that morning down 6 percent. Did First Solar comply with Regulation FD?