SOCIAL DISCLOSURE: Tweets and Facebook posts just got legitimized for the corporate world. The Securities and Exchange Commission said Tuesday that companies could reveal key information via social media as long as investors were given a heads-up where to look for updates.
“One set of shareholders should not be able to get a jump on other shareholders just because the company is selectively disclosing important information,” said George Canellos, acting director of the SEC’s enforcement division. “Most social media are perfectly suitable methods for communicating with investors, but not if the access is restricted or if investors don’t know that’s where they need to turn to get the latest news.”
This story first appeared in the April 3, 2013 issue of WWD. Subscribe Today.
The decision grew out of an investigation into a Facebook post on Netflix chief executive officer Reed Hastings’ personal account that told followers the company’s online viewing had exceeded 1 billion hours in a month for the first time. No wrongdoing was alleged and no enforcement action was taken, but the SEC did say that personal social media accounts of employees “would not ordinarily be assumed to be channels through which the company would disclose material corporate information.”