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Friday, Aug 19, 2022
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SEC OKs Social Media for Company Announcements

Public companies in the San Fernando Valley now have additional ways of getting key information to investors: Twitter and Facebook. The Securities and Exchange Commission said Tuesday in a new report that social media announcements fulfill requirements for Regulation Fair Disclosure – so long as investors know where the announcements will be made. But the finding did come with a warning. George Canellos, acting director of the SEC’s Division of Enforcement, said companies should carefully examine whether social media announcements will give some investors an edge over others. “One set of shareholders should not be able to get a jump on other shareholders just because the company is selectively disclosing important information,” he said in a statement. “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.” In 2008, the SEC found that company websites are acceptable means of disseminating information as long as investors know where to look for it. The report stemmed from an investigation into a Facebook post by Netflix Inc. in July 2012. Chief Executive Reed Hastings stated that the video-streaming service had reached one billion monthly viewers for the first time. The SEC chose not to investigate Netflix or Reed, but said the incident showed the need for clarification.

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