There is nothing new under the sun - streaming edition

Quick note about the report issued by the SEC this week in connection with a decision to not proceed with action against Netflix CEO Reed Hastings for making selective disclosures of material Netflix information on his personal Facebook page:

The report says there isn't anything that needs to be changed in five year old written guidance on the subject.

"Our 2008 Guidance was directed primarily at the use of corporate web sites for the disclosure of material, non-public information. Like web sites, corporate social media pages are created, populated, and updated by the issuer. The 2008 Guidance, furthermore, specifically identified 'push' technologies, such as email alerts and RSS feeds and 'interactive' communication tools, such as blogs, which could enable the automatic electronic dissemination of information to subscribers. Today’s evolving social media channels are an extension of these concepts, whereby information can be disseminated to those with access. Thus, the 2008 Guidance continues to provide a relevant framework for applying Regulation FD to evolving social media channels of distribution."

So the problem in the Hastings matter (prior posts from this blog on the topic here, here and here) wasn't lack of up to date rules or guidance so much as an obstinace in thinking social media inhabits some obscure alternate universe perpendicular to the many parallel universes in which we all otherwise manage to travel concurrently.

Sunshine streamingWhatever channel chosen for disclosure, the key is to let shareholders know, so that they are able, in the words of the report, "to take the steps necessary to be in a position to receive important disclosures — e.g., subscribing, joining, registering, or reviewing that particular channel."

Aside to Netflix shareholders: join Facebook!

According to the summary of the facts in the report, letting shareholders know in advance that he would make material Netflix disclosures on his personal Facebook page was not something Hastings did. On the contrary, as late as December 2012, according to the report, "Hastings stated for the public record that 'we [Netflix] don’t currently use Facebook and other social media to get material information to investors; we usually get that information out in our extensive investor letters, press releases and SEC filings.'”

Bottom line analysis you'll get here that you may not get anywhere else: the SEC stood down from pursuing enforcement while reaffirming that it had a poster child of a case for doing so.

Photo: Roz Vincent \ Flickr.


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