The Facebook Post That Got Netflix CEO Reed Hastings in Trouble With the SECby
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 post may not be public enough.
The SEC is considering taking action against Netflix 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.