Safe Tweeting: SEC Provides Guidance on Social Media and Regulation FD Compliance

The SEC has provided guidance to publicly reporting companies on how to use popular social networking sites, such as Facebook and Twitter, consistent with federal securities laws.

On April 2, 2013, the Securities and Exchange Commission (SEC) issued a release1 detailing its investigation into whether Netflix, Inc. and its CEO, Reed Hastings, violated Regulation FD and Section 13(a) of the Securities Exchange Act of 1934, when Hastings used his personal Facebook page to announce that Netflix had streamed 1 billion hours of content in June 2012. Hastings’ personal Facebook page had not previously been used to make company announcements, and shareholders had not been informed that it would be used to disclose company information. In addition, after the disclosure, Netflix did not post the information on its web site, issue a press release or file a Form 8-K.

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