On April 2, 2013, the Securities and Exchange Commission released a report of its investigation regarding a potential enforcement action against Netflix, Inc. and its CEO, Reed Hastings. The report related to Hastings' use of his personal Facebook page to disseminate company metrics that may have been considered material, nonpublic information, which should have been disclosed in accordance with Regulation FD. The SEC decided not to pursue an enforcement action against Netflix or Mr. Hastings, and in its report released guidance on the use of social media as a means of compliance with Regulation FD. Specifically, the SEC advised that social media sites may be used as channels for investor communication under Regulation FD, provided that the sites comply with analysis provided under that regulation, as well as 2008 guidance that the SEC previously released, regarding the use of corporate websites to communicate material, nonpublic information. We provide observations on the Netflix report and practical considerations regarding the SEC’s guidance at this link.
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