Is It Permissible to Release News Through Social Media? It Depends.
Is It Permissible to Release News Through
Social Media? It Depends.
How does the modern IRO reach their
audience of investors?
The SEC’s Approval with Caveats
The SEC recently released a
report outlining approval of
the use of social media outlets
such as Facebook and Twitter
for the dissemination of
information by corporations, as
long as certain requirements
The New SEC Guidelines
Advance notice must be given to investors that the
company is using social media outlets for dissemination
The social media accounts should be a corporate
account and not the personal account of an office,
director, or employee.
The CFO, legal, or investor relations department should
be consulted with prior to a disclosure for
appropriateness, and the relevant department should
monitor the social media account after the news has
Background to the Guidelines
In July of 2012 Netflix
CEO Reed Hastings used
Facebook to boast that
NFLX monthly viewing
exceeded 1 billion hours.
Hastings maintains the
post wasn’t material; the
SEC investigated and
found nothing wrong
with the use of his public
profile and that social
media could be used.
Basis for SEC’s Social Media Decision
The SEC based its 2013 decision on several previously
published rules and regulations:
The Regulation Fair Disclosure (2000)
Reg FD is to ensure news is directed to the public in a broad
non-exclusionary method, primarily via news releases and
SEC form 8-K.
The Website Dissemination Guidance (2008)
Acknowledged the use of a corporate website for
dissemination of material non-public news as long as certain
criteria were met.
What Should a Company Do?
Companies should update their Disclosure Policy to
include social media as a news dissemination method.
Consider a dedicated IR social media channel.
Use this opportunity to reduce IR costs, use labor more
efficiently, and control your own messaging formats and
More from IR Smartt?
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