The Securities and Exchange Commission (SEC) has for companies to make corporate announcements via Facebook, Twitter, and LinkedIn. However, there’s a caveat: Companies must inform investors beforehand of the URLs where announcements will be made. This marks a reversal for the SEC, which after a public Facebook post by CEO Reed Hastings about corporate filing omissions caused the company’s stock price to fluctuate.
“One set of shareholders should not be able to get a jump on other shareholders just because the company is selectively disclosing important information,” George Canellos of the SEC said 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.”
Yesterday, the SEC announced that Hastings would not face penalties.