SEC to Allow Shareholder Information Through Social Media
(NEW YORK) — In a sign of the times, the Securities and Exchange Commission said Tuesday that companies can make shareholder information public through Twitter, Facebook and other social media as long as investors know in advance which outlet will be used to share this information.
SEC public disclosures exist so that all shareholders in a public company have pertinent information about their investment at the same time.
“One set of shareholders should not be able to get a jump on other shareholders just because the company is selectively disclosing important information,” said George Canellos, acting director of the SEC’s Division of Enforcement. “Most social media are perfectly suitable methods for communicating with investors, but not if the access is restricted or if investors don’t know that’s where they need to turn to get the latest news.”
The decision came out of an investigation into Netflix and Reed Hastings, its chief executive, who in July posted on his personal Facebook page that Netflix monthly viewing surpassed more than 1 billion hours for the first time in June. This information affected Netflix’s stock price.
The SEC did not penalize Hastings or Netflix as part of this decision, saying instead that the SEC needed to resolve market uncertainty.
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