In July of this year the CEO of Netflix, Reed Hastings posted this on his facebook: “Netflix monthly viewing exceeded 1 billion hours for the first time ever in June.”
Since then the S.E.C. has launched a probe to determine if–through this social media post–the video streaming company violated “the Regulation Fair Disclosure rule, commonly known as Reg FD, which requires a company to announce information that is material to its business to all investors at the same time.”
Steven Davidoff of the New York Times examines the two critical aspects of this case: 1) Is facebook a public space where investors and analysts know to receive information? And 2) Did the post contain material information?
Struggling to keep pace with our modes of information consumption, regulators reveal their outdated framework.