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The Facebook Post That Got Netflix CEO Reed Hastings in Trouble With the SEC


Reed Hastings, CEO of Netflix, at the 2011 Leaders in Technology conference in Las Vegas

Photograph by Andrew Harrer/Bloomberg

Reed Hastings, CEO of Netflix, at the 2011 Leaders in Technology conference in Las Vegas

According to the Securities and Exchange Commission, when a company has important information to share, it has to make it broadly public. Also according to the SEC, a Facebook (FB) post may not be public enough.

The SEC is considering taking action against Netflix (NFLX) for a message Chief Executive Reed Hastings posted to his public Facebook page in July in which he bragged that Netflix monthly viewing exceeded 1 billion hours for the first time in June.

In the past, companies have typically shared announcements in news releases or regulatory filings. But as social media redefines the concept of public disclosure, perhaps it’s time to revise the 12-year-old rule. In the meantime, the SEC’s response offers a warning to other companies as they develop their social media strategies.

Salyer is social media editor for Bloomberg Businessweek.

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