The Securities and Exchange Commission today issued a report that makes clear that companies can use social media outlets like Facebook and Twitter to announce key information

CEO's..Start tweeting :)

 

The SEC came out today and said that corporations or their executives can use Facebook, Twitter, or other social media platforms as a way of disseminating corporate information.

In other words, Reed Hastings, you’re in the clear, buddy.

Hastings, the CEO of Netflix NFLX -3.15%, caused an uproar in July when he shared some news via Facebook; he noted that Netflix had more than one billion hours of streaming

video in a month. The stock jumped sharply on the news, which raised a minor firestorm and sparked a germane question: If corporate executives or companies share information via Twitter or other social media platforms, is that a violation of fair disclosure laws?

In December, the SEC said it was considering bringing charges against Hastings. But after looking into the issue for several months, the agency today came to the conclusion that social media is indeed okay, with certain restrictions in place.

Separately, the agency said that it “determined not to pursue an enforcement action” against Hastings.

Here’s what the SEC had to say in a press release about social media and fair disclosure:

The Securities and Exchange Commission today issued a report that makes clear that companies can use social media outlets like Facebook and Twitter to announce key information in compliance with Regulation Fair Disclosure (Regulation FD) so long as investors have been alerted about which social media will be used to disseminate such information.

The SEC’s report of investigation confirms that Regulation FD applies to social media and other emerging means of communication used by public companies the same way it applies to company websites. The SEC issued guidance in 2008 clarifying that websites can serve as an effective means for disseminating information to investors if they’ve been made aware that’s where to look for it. Today’s report clarifies that company communications made through social media channels could constitute selective disclosures and, therefore, require careful Regulation FD analysis.

“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 Division of Enforcement. “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.”