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SEC Clarifies the Application of Regulation FD to Social Media Disclosures

Since the announcement of the investigation by the SEC of the CEO of Netflix, Inc. for a July 2012 Facebook post celebrating a company milestone, there has been considerable uncertainty as to whether companies can use social media outlets, like Facebook and Twitter, to communicate with investors without violating Regulation Fair Disclosure (?Ç£Regulation FD?Ç¥). On April 2, 2013, the SEC addressed this uncertainty by issuing a Report of Investigation (the ?Ç£Report?Ç¥) in which it clarified the rules applicable to companies releasing information to the public through social media. The Report indicates that the SEC is amenable to the increased use of social media outlets by companies while also reinforcing the applicability of Regulation FD to any such disclosures. Regulation FD contains the federal securities regulations requiring public companies to disclose material, non-public information to investors in a manner reasonably designed to achieve effective broad and non-exclusionary distribution to the public… Continue Reading

April 2013
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