SEC Urged to Update Fair Disclosure

Twelve-year-old regs don’t take into account social media.

U.S. regulators, probing comments posted by Netflix Inc. Chief Executive Officer Reed Hastings on Facebook Inc.’s site, are being urged to reconsider disclosure rules created years before the advent of social media.

Netflix said it may face a Securities and Exchange Commission civil suit after Hastings told Facebook followers in July that Netflix customers watched more than 1 billion hours of videos in June, according to a filing by Netflix yesterday. The company said that it didn’t issue an accompanying press release or make a filing with regulators.

Precedent Setting

The case against Netflix may hinge on whether Facebook or other social sites can be considered as public an arena as a company blog or a broadly disseminated press release. The outcome will have implications for other executives who share information through tweets and other consumer-Web networks.

Public Media

Still, he said Facebook shouldn’t get the same treatment under disclosure rules as websites that are available for anyone to visit.

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