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SEC Issues Guidance On Social Media Disclosure

In July 2012, Netflix’s President, Reed Hastings, announced on his personal Facebook page that Netflix had streamed 1 billion hours of content in June. Netflix is a public company, and the Securities and Exchange Commission (“SEC”) subsequently commenced an investigation of whether this announcement violated SEC Regulation FD, which addresses selective disclosure of material information by public companies.
In a Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934 (Release No. 69279, April 2, 2013), the SEC announced its determination not to pursue an enforcement action against Hastings or Netflix. In its release, the SEC did not explain that decision, but it did provide guidance regarding the use by public companies of social media to communicate with shareholders and potential investors.

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