It is now over a month since the U.S. Securities and Exchange Commission (SEC) issued guidance in the form of a report of investigation (“April Report”) explaining why it decided not to bring an enforcement case against Netflix or its CEO Reed Hastings.

Executive Summary

Even though the SEC okayed the use of social media for disclosing material information in April 2013, public companies are unlikely to use Facebook or Twitter as their sole means of disclosure, according to Richard Levick, who describes the reaction to the SEC's 2008 guidance on website disclosures and ongoing landmines, such as the need to know investors' media preferences.

Hastings had posted financial data on his personal Facebook page without any advance announcement by the company that that page would be a mechanism for communicating material company information.

The April Report caused quite a stir in the media, yet securities lawyers are duly advising against rash conclusions based on the title of the SEC’s press release: “SEC Says Social Media OK for Company Announcements if Investors Are Alerted.

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