U.S. regulators, probing comments posted by Netflix Inc. ChiefExecutive Officer Reed Hastings on Facebook Inc.'s site, are beingurged to reconsider disclosure rules created years before theadvent of social media.
Netflix said it may face a Securities and Exchange Commissioncivil suit after Hastings told Facebook followers in July thatNetflix customers watched more than 1 billion hours of videos inJune, according to a filing by Netflix yesterday. The company saidthat it didn't issue an accompanying press release or make a filingwith regulators.
Companies and executives are increasingly relying on sites suchas Facebook and Twitter Inc. — alongside news wires and other moretraditional outlets — to communicate with the public. It's time forthe SEC to update its policies to account for the widening roleplayed by social media in helping companies be more transparent,said Stephen Diamond, associate professor of law at Santa ClaraUniversity.
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