Is Groupon Illegally Tooting Its Own Horn?

There is an article in the Wall Street Journal today discussing Groupon.

That's nothing new, the company is set to go public before the end of the year, and many have deemed it the fastest growing tech company of all time. So why is this mention causing such a stir?

It's because the company may be doing something illegal. Companies can not tout themselves ahead of their initial public offerings, but an internal email appears to do just that. The report first came from All Things D, which is a sister site to the Journal. Both are owned by News Corp. (NASDAQ: NWSA).

In the email, CEO Andrew Mason said, "The degree to which we're getting the [expletive] kicked out of us in the press had finally crossed the threshold from ‘annoying' to ‘hilarious.'… I'll summarize my excitement with four points: 1) Growth in our core business is strong 2) Our investments in the future — businesses like Getaways & NOW — look great, 3) We are pulling away from competition, and 4) We've built a great team that I would pit against anyone. In other words, all the stuff that one would want to look good? It looks good."

The email is an internal email, and was probably used to build team morale, not potentially entice investors. It was never "meant" to be leaked, despite the obviously optimistic nature of the email. “The SEC appreciates that a company in the quiet period still needs to communicate with its employees,” said Andrew Pitts, a partner and securities-law expert with Cravath, Swaine & Moore. “That doesn't mean you get a free pass,” he said in quotes to the Journal.

What is potentially illegal, as Business Insider notes, is that the email was potentially distributed publicly with the help of a media outlet. Groupon has to know that release documents like this prior to its IPO is illegal, but if it was leaked, then the company can claim that it did nothing wrong. It could be trying to drum up interest, without actually drumming up interest.

It is up to the SEC to decide whether Groupon has skirted the laws, however antiquated they might be.

What do you think? Was Groupon trying to skirt the laws, or was this just a lack of judgement on the part of Mason?