The US Securities and Exchange Commission has wrapped up an investigation into whether Netflix CEO Reed Hastings broke federal rules by announcing company metrics on Facebook — and it's decided Hastings' decision was mostly justifiable. In a release, the SEC said that companies could fairly disclose key data on Facebook, Twitter, or other social media sites, so long as investors are told beforehand where information could be posted. That comes a few months after it censured Hastings for using his personal Facebook account to announce a record month of streaming.
SEC rules are in place to make sure investors all get the same level of access to company performance details, and it's now decided social media posts can fit those requirements. Essentially, the agency decided that social media can be treated as an extension of company websites, which it determined in 2008 were fine venues for financial information. Both Hastings and the SEC note that his Facebook post was public, meaning that his "friends" weren't necessarily being given preferential treatment.
The SEC determined that social media could be treated like a company website
While no further action is apparently being taken, however, the SEC suggests that Hastings wasn't quite blameless. In order to be seen as fair, companies need to tell investors where they might find information, and Hastings had said before that investors didn't need to check social media, since information would go out through press releases or filings. "We appreciate the value and prevalence of social media channels in contemporary market communications," the SEC writes in its report, but it reminds companies that their tweets and Facebook posts still need to comply with the rules.