SEC uk canada goose wrestles with Internet age in Netflix case
WASHINGTON (Reuters) A regulatory probe of Netflix Inc over disclosures made on its chief executive Facebook page could prove an important test of whether a rule designed to prevent leaks to analysts can buy canada goose jacket translate to the social media age.
A sign is shown at the headquarters Canada Goose sale of Netflix in Los Gatos, California September 20, 2011. REUTERS/Robert Galbraith
The movie and TV streaming service revealed on Thursday that it may face action from Canada Goose Online the Securities and Exchange Commission if the agency determines the comments from CEO Reed Hastings violate a Canada Goose Outlet rule that requires information to be disclosed to investors at the same time.
canada goose coats Hastings Facebook page had more than 200,000 subscribers, including reporters and analysts, when he told them on July 3 that the company had hit 1 billion hours viewed in June.
Canada Goose Outlet By comparison, cable financial news network CNBC had 175,000 viewers and Fox Business News had 59,000 canada goose coats on sale viewers on December 6, according to the website TV by the Numbers, citing buy canada goose jacket cheap Nielsen data.
canada goose store But the case may not hinge on whether Hastings Facebook page qualifies as a public dissemination.
Instead, it canadian goose jacket may come down to two other issues.
canada goose deals One, whether the information was material to investors.
canada goose And two, if it was material, whether investors knew that Hastings Facebook page was a venue to release important company news.
canadian goose jacket As evidence of materiality, the SEC could point to statements Hastings made earlier in the year highlighting milestones, including hours streamed, as metrics investors should watch.
buy canada goose jacket cheap But the company contends the July 3 comments were not material. It says that the company posted a blog entry a few weeks earlier that canada goose black friday sale said the company was approaching that milestone. House of Representatives committee on June 27, Canada Goose Jackets and said at the beginning of his testimony that Netflix close to a billion hours of streaming movies and TV shows to its consumers every month.
Such prior disclosure could hurt any SEC case. what he said is materially different from what the company has already disseminated, that may be a real challenge for the commission to maintain cheap canada goose uk that position in court, said former SEC lawyer Eugene Goldman who is now with McDermott Will Emery.
canada goose coats on sale But movements of the company stock price could bolster an SEC case if the agency can prove the stock jumped on the news. Netflix attributed the jump in its stock price to a positive analyst report canada goose uk black friday released the night prior to Hastings Facebook post.
The stock closed at $67.85 on July 2, and opened one percent higher the next day at $68.49, on a positive report from Citigroup.
The stock closed at $72.04 on July 3, a six percent jump that would canada goose factory sale be cheap Canada Goose unusual from an analyst report alone.
Canada Goose online IN THE REAL WORLD The second issue of whether Hastings canada goose sale Facebook page was a known source of material https://www.clevelandregionalmedicalcenter.com company news goes to the heart of whether the SEC rules and its interpretation of them are outdated.
SEC adopted the rule at issue, Regulation Fair Disclosure, or Reg FD, in 2000 over concerns that companies were meeting with small groups of analysts or institutional investors and disclosing material information to them.
Canada Goose Jackets The concern was that after these types Canada Goose Parka of meetings, trading would take place on the basis of such information, Goldman said. seems a lot different from that.
The new potential action raises questions about whether the rule was designed to canada goose uk shop address disclosures like the one made by Hastings.
canada goose clearance a huge divide between CEOs living in the real world and the financial industry, which lives behind regulatory walls. Reg FD is built for canada goose uk outlet the old way of communicating from behind these walls, said Howard Lindzon, canada goose store a hedge fund manager and founder and CEO of StockTwits, a social network for traders and investors to share real canada goose time ideas and information about stocks.
Canada Goose Parka Reg FD does not delve into the use of social canada goose clearance sale media for disclosing information to investors. But the SEC canada goose clearance issued guidance on the subject in August 2008.
That guidance states that companies can use websites to disclose information as long as they are a channel of distribution.
To determine that threshold, the SEC lists factors Canada Goose Coats On Sale companies should weigh, including whether their site is and accessible and also whether company has made investors and the markets aware that it will post important information on the website.
Canada Goose sale Netflix Canada Goose online may have hurt itself on this point, if the SEC is able to prove that the information was material.
buy canada goose jacket Hastings acknowledged in a blog posting on Thursday that the company does not Facebook and other social media to get material information to investors.
canada goose black friday sale The SEC is likely to home in on that comment as it continues its case against the company.
But Elon Musk, the CEO of Tesla Motors who has posted company related developments on his Twitter feed, said it is hard to believe that the SEC could consider a CEO Facebook post to be a narrow release. He noted that reporters regularly follow companies and canada goose coats executives social uk canada goose outlet media posts.
cheap Canada Goose consider a press release to be a more public venue than a Facebook or Twitter account where someone is followed by hundreds of thousands of people, including the press themselves, is simply untrue, Musk said in an email.