S.E.C. Warns Netflix Over a Post on Facebook

From The New York Times:

Reed Hastings, the chief executive of Netflix, congratulated his team for a job well done in early July. On his public Facebook page, he crowed about the one billion hours of video that subscribers watched the previous month. The message was just 43 words.

Now, Netflix and its chief may be in deep trouble for that brief post.

On Thursday, Netflix disclosed that the Securities and Exchange Commission was considering taking action against the company and Mr. Hastings for its Facebook communication. The agency, in a so-called Wells notice, warned that it may file civil claims or seek a cease-and-desist order.

The S.E.C. is concerned that the post 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.

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