Dear SEC; Please Redefine Full Disclosure for the Digital Age

Netflix CEO Reed Hastings has received Wells Notices from the SEC, warning of possible regulatory action against Hastings and Netflix for a Facebook post.  That’s right – the social media outlet with unprecedented reach is apparently not considered wide and fair dissemination of milestone messages like this:

Screen shot 2012-12-07 at 6.37.46 AM

Facebook, with 1 billion monthly active users as of October 2012, is perhaps among the most public distribution around today.  Social media experts encourage this sort of public thanking of employees and supporters.  Many, many companies do it.  Does it impact the price of a stock when a company reaches a milestone? Of course it does.  Does the number of users or hours of use require an SEC filing before release?  I’m not sure.  How is the July post any different than this one, from October?

Screen shot 2012-12-07 at 7.01.56 AM

Social media is changing the world of public relations – investor relations included.  It has changed the way news breaks – as on-the-scene witnesses report news as it happens and, if it’s really newsy, goes viral.  News companies monitor social media for news tips.  Shouldn’t financial firms as well?  Laws and guidelines often lag development – it seems like it’s time for the SEC to review their “full disclosure” regulations, to expand them to include widely used social media outlets like Facebook and Twitter.


4 comments on “Dear SEC; Please Redefine Full Disclosure for the Digital Age

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