Securities enforcement defense is a significant part of our practice. Last month we saw an important development in the application of securities law to social media. For the first time,
the Enforcement Division of the SEC issued a Wells Notice based on a social media communication. We covered the news and the interaction of the securities laws and Facebook when the story broke. On the surface, this doesn't appear to be much of a Reg FD issue, given the prior release of the information, and the vast following that Netflix's CEO has on Facebook.
But it does raise a number of interesting questions. Even more if you are a securities defense attorney who is a computer-geek-wannabe and something of a social media expert.
The Harvard Law School Forum on Corporate Governance and Financial Regulation examines the issue and the potential for liability arising from
disclosures by corporate officers through social media in its article
Applying Securities Laws to Social Media Communications
Showing posts with label Reg FD. Show all posts
Showing posts with label Reg FD. Show all posts
Monday, January 7, 2013
Friday, December 7, 2012
Facebook Post Leads to Reg FD Problems for Netflix
Regulation FD requires companies to make announcements of material information to all investors at the same time. Adopted in 2000, the regulation is intended to help insure that all investors receive equal access to information.
Undoubtedly an unattainable goal, but it is the law. This week, Netflix learned that the hard way. Reed Hastings, the chief executive of Netflix, congratulated his team for a job well done in early July. On his public page, he crowed about the one billion hours of video that subscribers watched the previous month. The message was just 43 words.
Now, Netflix and its chief may be in deep trouble for that brief post. On Thursday, Netflix disclosed that the Securities and Exchange Commission was considering taking action against the company and Mr. Hastings for its Facebook communication. The SEC sent Netflix and Hastings a Wells Notice, warning that it may file civil claims or seek a cease-and-desist order.
Undoubtedly an unattainable goal, but it is the law. This week, Netflix learned that the hard way. Reed Hastings, the chief executive of Netflix, congratulated his team for a job well done in early July. On his public page, he crowed about the one billion hours of video that subscribers watched the previous month. The message was just 43 words.
Now, Netflix and its chief may be in deep trouble for that brief post. On Thursday, Netflix disclosed that the Securities and Exchange Commission was considering taking action against the company and Mr. Hastings for its Facebook communication. The SEC sent Netflix and Hastings a Wells Notice, warning that it may file civil claims or seek a cease-and-desist order.
Subscribe to:
Posts (Atom)