The “flexibility” the SEC showed yesterday for a wider use of social media in Companies’ announcements opens the big door for a discussion not often given the importance it should: Social Media’s impact on disclosure and what boards should do about it. Here three interesting pieces about these breakthrough news:
Netflix CEO Reed Hastings called out by the SEC last year over posting what might have been material information on the company’s performance to an update on his Facebook wall. Shouldn’t that kind of stuff be sent out via regular SEC-friendly channels first?
Maybe not, according to a release today by the market regulator. “Companies should review the Commission’s existing guidance – it is flexible enough to address questions that arise for companies that choose to communicate through social media, and the guidance does so in a straightforward manner,” said Lona Nallengara, the Acting Director of the SEC’s Division of Corporation Finance, in a statement.
Last week we took a look at how the SEC could reform its disclosure rules — first established more than a decade ago — to make more sense in the era of social media. Given the announcement today, it looks like there is flexibility from the regulator for a wider use of social media than some thought. Continue reading…
S.E.C. Sets Rules for Using Social Media to Make Disclosures by Michael de la Merced
Chief executives can now feel free to post, blog or tweet — as long as they inform investors about their social media strategy first.
The Securities and Exchange Commission on Tuesday outlined new disclosure rules that clarify how companies can use Facebook, Twitter and other social networks to disseminate information provided they meet certain requirements. Still, the new move may reduce spontaneity because companies may limit their communications to official corporate accounts and file the information with the agency at the same time.
With the decision, the S.E.C is playing catch-up to the new era of social media. Continue reading…
CEOs and other executives have been given the all-clear by the U.S. Securities and Exchange Commission to publish company announcements via social networks such as Twitter and Facebook.
Well, almost the all-clear.
According to a statement issued on Tuesday, the SEC stipulated that these digital channels can be used for corporate news and announcements “so long as investors have been alerted about which social media will be used to disseminate such information.”
George Canellos, acting director of the enforcement division at the SEC, asserted in the statement that “one set of shareholders should not be able to get a jump on other shareholders just because the company is selectively disclosing important information.” Continue reading…