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SEC clears use of social media for company announcements

The Securities and Exchange Commission issued a report this week that says companies can announce key information to investors via social media, a relaxing of its prior position that such announcements could violate Regulation FD.

The “Report of Investigation” was the result of an inquiry into Facebook posts made by Netflix CEO Reed Hastings in July of 2012.  Specifically, these posts described Netflix’s monthly viewing increases and suggested future success following the release of new programming.  The SEC sought to determine whether these Facebook posts violated the requirements of “Reg FD” which generally mandates that when an issuer discloses material, nonpublic information, which might influence trading of that stock, the issuer has to disclose it to everyone at the same time.

In its Report, the SEC established that companies can use social media outlets like Facebook and Twitter to announce key information “as long as investors have been alerted about which social media will be used to disseminate such information.”

Read the SEC’s Report of Investigation here.

For more information contact:
Anthony C. Pietrangelo
PH: 901-685-2662
FX: 901-685-6122
apietrangelo@pcplc.com