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Netflix CEO in Hot Water with SEC for Facebook Post

This will be interesting to watch.

In a Facebook posting on July 5, Hastings said that Netflix customers were viewing more than 1 billion hours of video content a month. Information that the company was approaching 1 billion hours had appeared on the company’s blog the month before. But in neither case did the company issue a formal press release or make a separate filing with the SEC disclosing the billion hour statistic.

The posting was widely reported and Netflix stock rose 13% the day of the posting.

On Thursday, Netflix disclosed in a new posting, an SEC filing and a news release that Hastings and the company received a Wells Notice from the SEC. The notice says the agency staff will recommend regulators institute a cease-and-desist proceeding and/or bring a civil injunctive action for violations of the agency’s fair disclosure rules.

With all of the new forms of communication, does a company have to rely on formal press releases and SEC filings or can other means be used to communicate with the public?

Posted by Owen at 1417 hrs
Economy + Politics + Politics - Wisconsin + Technology

1. Today’s (Saturday) WSJ had an editorial on this.  The editorial said the SEC should stick to serious business fraud and do better at finding securities fraud than this suit against a facebook post on Netflix’s reaching that level of streaming.  No one was hurt, consumer or investor as members pay a flat fee, the stock was rising before the post and if anything, Netflix will have a hard time raising the price of streaming now that members get so much access at $8 a month.  Meanwhile the real bad guys who nailed us in 2008 to now are untouched.

   Posted by .(JavaScript must be enabled to view this email address) on December 08, 2012 at 1611 hrs
   
   
   

2. A duty is a duty - we can’t rely on any electrronic means of communication since we cannot assess their credibility. I’m far from allowing companies publish related information wherever they want blindfully believing interested investors will read it anyway. There’s no way to distinguish between real and fake communication made that way which is even more dangerous and fraud-prone than the described incident.

   Posted by Nicholas on December 15, 2012 at 0458 hrs
   
   
   

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