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Will Facebook Become the New Disclosure Outlet?

Louis M. Thompson | May 14, 2013

Last month, the Securities and Exchange Commission finally waded into the choppy waters of whether the various forms of social media could be considered part of a company's disclosure regimen. 

The SEC's guidance took the unusual form of a Report of Investigation resulting from a Division of Enforcement inquiry into Netflix CEO Reed Hastings' use of his personal Facebook page to announce in July 2012 that Netflix had streamed a billion hours of videos during the prior month.

The SEC questioned whether Reed's missive constituted material news amounting to selective disclosure and therefore violated Regulation Fair Disclosure.  Since its inception in 2000, Reg FD, as it is known, was predicated on leveling the playing field for all investors by providing fair access to material, non-public information. 

At the time, social media sites like Facebook and...

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