×

After Netflix Inquiry, SEC Clears Companies to Disclose Info Via Social Media

More disclosure expected on Facebook, Twitter

The Securities and Exchange Commission is not pursuing any enforcement action against Netflix CEO Reed Hastings for posting corporate news on his Facebook page, and instead is giving the green light to public companies to make use of social media to disclose information as long as investors know that is where they should turn.

The SEC had launched an inquiry in July after Hastings posted on his personal Facebook page that Netflix had streamed 1 billion hours of content in the month of June, a first for the company. At issue was whether that was a violation of SEC regulations prohibiting public companies from selectively disclosing material. The SEC requires that such a disclosure be made “through a recognized channel of distribution.”

Hastings, the SEC said, had not previously used his Facebook page to announce company metrics, and the company had not alerted investors that his page would be a place where such information would be posted. Netflix’s stock price had been rising before the posting, the SEC said, and increased from $70.45 at the time of the post to $81.72 at the close of the following trading day.

“Personal social media sites of individuals employed by a public company would not ordinarily be assumed to be channels through which the company would disclose material corporate information,” the SEC said in a report on its investigation. Nevertheless, the regulators concluded that there “has been market uncertainty” about how the rule applies to social media.

“One set of shareholders should not be able to get a jump on other shareholders just because the company is selectively disclosing important information,” George Canellos, the SEC’s acting director of the division of enforcement, said in a statement. “Most social media are perfectly suitable methods for communicating with investors, but not if the access is restricted or if investors don’t know that’s where they need to turn to get the latest news.”

A Netflix spokesman did not immediately respond to a request for comment.

Popular on Variety

More Digital

  • Tinder - Swipe Night

    Tinder's Apocalyptic 'Swipe Night' Interactive Dating Show Sets Release Date

    Tinder next month will bow its first original entertainment content — “Swipe Night,” an interactive adventure series in which viewers are forced to make dating choices on humanity’s last night on Earth. Variety previously reported details of the location-based social network/dating app service’s foray into original content, which recently wrapped production in Mexico City and [...]

  • Editorial Use onlyMandatory Credit: Photo by

    YouTube Rolls Back Verification Changes, Says Verified Creators Can Keep Their Badge

    A day after announcing significant changes to its verification program, YouTube announced Friday afternoon that it won’t be de-verifying existing creators after all. “We heard loud and clear how much the badge means to you,” said YouTube product manager Jonathan McPhie in a blog post. “Channels that already have the verification badge will now keep it [...]

  • BLive: BitTorrent Live Streaming App to

    BitTorrent to Launch Public Beta of New Live Streaming App

    BitTorrent is getting ready to open the floodgates for its new live streaming app, dubbed BitTorrent Live: The company plans to launch a BitTorrent Live Android app on various app stores as part of a public beta test late Friday, according to a spokesperson. BitTorrent Live, which is also known as BLive, is being described [...]

  • Netflix - Apple TV

    Netflix Stock Drops After CEO Acknowledges 'Tough Competition' Coming From Disney, Apple

    Netflix shares fell as much as 7% Friday to a nine-month low, coming after CEO Reed Hastings commented that the November launches of Disney Plus and Apple TV Plus will introduce a “whole new world” of competition. Hastings, speaking at the Royal Television Society conference Friday in Cambridge, England, said, “While we’ve been competing with [...]

  • Facebook

    Facebook Suspends Tens of Thousands of Apps During Privacy Investigation

    Facebook has suspended tens of thousands of apps ever since it began investigating potential privacy abuses, the company said Friday. The apps in question had been built by around 400 developers, and a suspension doesn’t necessarily indicate actual privacy violations. Facebook began combing through millions of apps that made use of its platform after the [...]

  • tivo logo

    Tivo Plans to Launch Android TV Dongle, Tivo+ Curation App

    DVR maker Tivo is getting ready to release a new device that may not record television at all: The company plans to launch a $50 Roku-like TV dongle early next year, its new CEO Dave Shull revealed in a conversation with CNN this week. The new device will be powered by Google’s Android TV platform, [...]

  • Still from "Andhadhun"

    Microsoft Streaming Deal Lifts Shares in India’s Eros

    Shares of leading Bollywood film distributor Eros International soared by 38% on Thursday following news of the company’s link up with Microsoft to develop a new generation of video streaming platform. The multinational company said that its Eros Now video operation would work with Microsoft Azure to develop its technology in three ways. They seek [...]

More From Our Brands

Access exclusive content