(Credit: Spencer Platt/Getty Images)
The Securities and Exchange Commission confirmed today that public companies can announce key information on social media sites such as Facebook and Twitter, so long as investors are informed as to which accounts may publish news.
The acknowledgment was published in the SEC's report of investigation on Netflix, and makes room for social media disclosures to be in compliance with Regulation Fair Disclosure (Regulation FD), a rule that requires companies to distribute material information to investors and the general public non-exclusively. In essence, companies and their executives can reveal news on investor-aware accounts without fear of retribution.
"Companies should review the Commission's existing guidance -- it is flexible enough to address questions that arise for companies that choose to communicate through social media, and the guidance does so in a straightforward manner," Lona Nallengara, acting director of the SEC's Division of Corporation Finance, said in a statement.
The report was published following an inquiry into a regulatory faux pas committed by Netflix CEO Reed Hastings last year. In July, the executive first told his subscribers on Facebook that Netflix str... [Read more]
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