Publicly traded companies can use social media outlets such as Facebook and Twitter to announce key information, as long as investors have been alerted about which social medial will be used, the Securities and Exchange Commission (SEC) announced on Tuesday.

 

The SEC's report of investigation confirms that its fair disclosure rules - 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.

 

"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, in a release. "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."

 

Regulation FD requires companies to distribute material information in a manner reasonably designed to get that information out to the general public broadly and non-exclusively. It is intended to ensure that all investors have the ability to gain access to material information at the same time.

 

The SEC's report of investigation stems from an inquiry the Division of Enforcement launched into a post by Netflix CEO Reed Hastings on his personal Facebook page stating that Netflix's monthly online viewing had exceeded one billion hours for the first time. 

 

Netflix did not report this information to investors through a press release or Form 8-K filing, and a subsequent company press release later that day did not include this information.