Originally posted on Variety:
The Securities and Exchange Commission is not pursuing any enforcement action against Netflix CEO Reed Hastings for posting corporate news on his Facebook page, and instead is giving the green light to public companies to make use of social media to disclose information as long as investors know that is where they should turn.
The SEC had launched an inquiry in July after Hastings posted on his personal Facebook page that Netflix had streamed 1 billion hours of content in the month of June, a first for the company. At issue was whether that was a violation of SEC regulations prohibiting public companies from selectively disclosing material. The SEC requires that such a disclosure be made “through a recognized channel of distribution.”
Hastings, the SEC said, had not previously used his Facebook page to announce company metrics, and the company had not alerted investors that his page would be a place where such information would be posted. Netflix’s stock price had been rising before the posting, the SEC said, and increased from $70.45 at the time of the post to $81.72 at the close of the following trading day.