Hastings' Use of Facebook to Communicate Raises SEC Questions

Netflix (Nasdaq: NFLX  ) and its CEO Reed Hastings have received notice from the SEC that the regulator is looking into a Facebook (Nasdaq: FB  ) post Hastings made in July and whether it violates fair disclosure regulations, according to an SEC document filed by the company yesterday.

At issue is a post Hastings made on Facebook on July 1, in which he reported that members had consumed more than 1 billion hours of viewing in June. The company did not issue a press release or file an 8-K with the SEC on the matter. The SEC is concerned that this did not meet guidelines for giving all investors equal access to material information disclosed by publicly traded companies.

SEC staff served a pair of Wells Notices, "indicating its intent to recommend to the SEC that it institute a cease and desist proceeding and/or bring a civil injunctive action against Netflix and Mr. Hastings for violations of Regulation Fair Disclosure," according to the filing.

In a response Netflix filed with the SEC, Hastings wrote: "we think the fact of 1 billion hours of viewing in June was not 'material' to investors, and we had blogged a few weeks before that we were serving nearly 1 billion hours per month." He said he had more than 200,000 Facebook subscribers at the time.

"We remain optimistic this can be cleared up quickly through the SEC's review process," wrote Hastings.

link


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2144254, ~/Articles/ArticleHandler.aspx, 9/17/2014 3:38:34 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement