The United States Securities and Exchange Commission (SEC) warned against selectively using social media to disclose information. This was in response to a post by Reed Hastings, CEO of Los Gatos, Calif.-based Netflix Inc., on his personal Facebook page making the first announcement that Netflix’s monthly online viewing had exceeded 1 billion hours. The SEC took no action saying it recognized there had been uncertainty about the use of social media to disclose corporate information and said it is allowed so long as investors have been alerted about which social media will be used to disseminate such information.
Part of the concern is that some might gain advantage in trading stock, running afoul of insider trading laws. This would be the case for example, if some investors knew which social media would be used but others didn’t.
The SEC has issued a report explaining that companies can use social media outlets like Facebook and Twitter to announce key information in compliance with Regulation Fair Disclosure (Regulation FD) so long as investors have been alerted about which social media will be used to disseminate such information.
Jeffrey Newman represents whistleblowers