Crystal Clear or Muddy Waters
If you’ve looked at the news in the past couple of days, you may be under the impression that the SEC has given the green light for publicly traded companies to use social media platforms to disclose material information concerning the company. This headline from the Washington Post says “SEC Clears Up Confusion Over Social Media Rules.” The gist of the story is that the SEC declined to take further action against Reed Hastings, the CEO of Netflix, arising from Hastings’ posting on his personal Facebook account last July that Netflix had streamed more than one billion hours of content in June. The issue was whether Hastings’ post violated SEC Regulation FD, which sets out certain requirements about how a company must disseminate material information. With all due respect to the Washington Post, this blog post is a little more thoughtful analysis. And the key point is that the SEC’s decision in the Netflix matter was what we lawyers like to call “fact specific.” It was based on the particular circumstances in that case. In a case that presents some variation of those circumstances, the SEC might rule differently. So don’t assume all bets are off in the social media realm. You might want to talk to a lawyer before you tweet!