The SEC is locking its’ sight on possibly suing Netflix Reed Hastings over some innocuous post on Facebook.
Netflix disclosed on Thursday that the SEC put Netflix and CEO Reed Hastings on notice for a so called Wells notices. This a formal notice that the SEC may file civil lawsuits against them.
The Wells notices, according to the company, is from Reed Hasting posting something on Facebook. This is a social media nightmare from many CEOs or business executives. Posting to your friends (not real friends but followers) on Facebook is now a crime. This is horrible and misguided.
The SEC needs to modernize their rules. I’ve said since 2007 that social media will disrupt all kinds of old school rules. This is another example. SEC is an example of anti innovation. Social networks are the new form of collaboration, information sharing, commerce, and even government.
Netflix is an example of what I call a “modern company”. They are part of that group of companies building the future. As an example just yesterday Netflix entered into a multi-year deal with Walt Disney studios that makes them the only online video distributor in the U.S. with licensing to show first-run live-action and animated films from the studio.
Government regulations can be a net of anti-innovation. Netflix might just have gotten caught in that net for some BS non-impactful reason.
My friend Eric made some noteworthy comment on Facebook that I thought that I would share here. (See below)
Eric Verwillow Yeah, whether or not the information was “material”, posting to your 245,000 Facebook followers certainly seems to meet the definition of “broad, non-exclusionary distribution of the information to the public.” http://www.sec.gov/rules/final/33-7881.htm
John Furrier that’s the nuance..actually to have that many numbers means he’s a public figure technically.. so it’s public not like us sharing soccer photos.. still social media is a double edge sword …real time info is changing analyst and public market definitiions of what is public…
Eric Verwillow Exactly. In my mind the distinction between “friend” and “follower” is important, friend being exclusionary and follower not. Going forward maybe they can rig up something that automatically cross-posts every blog post, FB post and tweet into an 8-K Form!
Breaking Analysis on Netflix earnings
Video on Netflix: I did a video Breaking Analysis segment on our new SiliconANGLE.tv when the put out their earnings. Enjoy my commentary on Netflix and some discussion on being founder friendly.