SEC, Netflix showdown averted

WASHINGTON — Companies can use social media such as Facebook and Twitter to unveil key information about their operations as long as they’ve told investors where to look for it, the Securities and Exchange Commission says.

The decision this week averts a showdown between the SEC and Netflix.

The Internet video streaming service got into trouble with the agency last year after Chief Executive Reed Hastings used his personal Facebook account to boast that his company had streamed more than 1 billion hours of content in June.

The SEC told Netflix that the July posting may have run afoul of a rule that requires companies to distribute important information broadly to the public, and avoid feeding it to a select group of shareholders who could trade on it ahead of other investors.

In 2008, the agency determined that companies can use websites to distribute material information as long as they’ve alerted investors that the sites would be used for the purpose.

The SEC issued guidance this week making it clear that the same principles apply to social media.
— This article appeared on page B01 of the Albuquerque Journal