Public Companies – Can Your Social Media Posts Violate SEC Rules?

There is always a new tangle when it comes to social media. The newest concern for public companies? If you post something on Facebook that should have been provided to your shareholders and the public, without putting it out on proper channels first, can this get you in trouble?  Well, apparently it can get you investigated by the SEC.

Reed Hastings, CEO of the much embattled Netflix, posted that the company had achieved “nearly one billion hours per month.”  Mr. Hastings has over 245k followers on Facebook. That same day, Netflix’s stock went up 13%. No other notice about this information was provided, either to the SEC or via any other public means.

In response, the SEC is investigating Netflix.

The question, was the information material? If so, is posting the information on Facebook to over 200k followers appropriate? Does it matter that the stock rose that day, and if so, did it rise because of what Hastings said, or because of something else (a positive and public report.)

I don’t know the answers to the questions. Either the SEC will go forward with an investigation and answer the questions, or it will stop its investigation based on a request from Netflix. Either way, this situation serves as a warning.  Make certain, when posting on social media, that all employees understand what they may and may not post. And give serious consideration to what is appropriate under all legal requirements for your industry, public/private status, and other concerns.


Subscribe to This Blog