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US Securities Regulators May Target Netflix

Publication Date: 
December 07, 2012
Source: 
ITWeb Limited (Reuters)

Professor Joseph Grundfest is quoted in this Reuters article on what the evolution of social media means for the SEC and discusses ways in which they can address the challenges. 

Netflix said on Thursday securities regulators warned they may bring civil action against the company and its chief executive for violating public disclosure rules with a Facebook post, in a case that raises questions about how public companies communicate on social media.

The high-profile Silicon Valley CEO, Reed Hastings, dismissed the contention and said he did not believe the Facebook post was "material" information.

...

"The evolution of social media presents the SEC with some very interesting regulatory challenges. But if they're worried about social media, there are ways for them to address that without threatening to sue Reed Hastings. They should have a rulemaking where they can ventilate these issues," said Joseph Grundfest, former SEC commissioner and Stanford Law School professor.

"This situation has nothing to do with the problems that Regulation FD was designed to address."