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SEC revises its stance on the corporate use of social media to inform investors

SEC clarifies and revises its stance on how companies can use social media to inform investors

By Charles Gantt from Apr 3, 2013 @ 10:01 CDT

This morning the Securities and Exchange Commission (SEC) announced that it has revised the way it believes companies should use social media outlets such as Twitter and Facebook to inform their investors about company information.

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The revision comes after the commission investigated Netflix CEO Reed Hastings over a post on Facebook about his personal holdings in the company, which caused the company's stock value to rise. The revision requires companies to notify investors that their social media accounts could post information that could affect stock values.

"Personal social media sites of individuals employed by a public company would not ordinarily be assumed to be channels through which the company would disclose material corporate information. 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."

NEWS SOURCES:Electronista.com


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