The document discusses recent SEC actions against Netflix and Tesla regarding corporate disclosures made through social media. It summarizes the SEC's Regulation FD, which aims to prevent selective disclosure of material information. However, the rules have not been updated since 2000 and do not address recent shifts to news/disclosures being shared through social media. The document argues the SEC should revisit Reg FD and provide clearer guidance for companies on the use of sites like Twitter and Facebook to disseminate information. In the interim, it recommends best practices companies should follow when senior executives post information on social media.
In April 2013, the Securities and Exchange Commission (SEC) cleared public companies to use social media outlets such as Twitter and Facebook to
announce key information in compliance with Regulation Fair Disclosure (Regulation FD), “so long as investors have been alerted about which social media will be used to disseminate such information.”
Regulation FD requires companies to distribute material information in a manner reasonably designed to get that information out to the general public broadly and non-exclusively. It is intended to ensure that all investors have
the ability to gain access to material information at the same time.
Yahoo's Lawsuit Against Former Employee for Leaking Information to PressTric Park
Yahoo filed a lawsuit against Cecile Lal, who it identified as a former chief of staff to a senior vice president at the company, in Santa Clara County superior court. The claim alleges breach of contract and breach of a fiduciary duty of loyalty by Lal, who it says leaks confidential information to author and journalist Nicholas Carlson.
Are Millennials as reluctant to work for the government as the conventional wisdom suggests? A deeper dive into survey data indicates a more complex story—and steps that public agencies should consider to attract and retain younger workers. Learn more about Millennials in government in our latest report: http://deloi.tt/1PC6fWr
In April 2013, the Securities and Exchange Commission (SEC) cleared public companies to use social media outlets such as Twitter and Facebook to
announce key information in compliance with Regulation Fair Disclosure (Regulation FD), “so long as investors have been alerted about which social media will be used to disseminate such information.”
Regulation FD requires companies to distribute material information in a manner reasonably designed to get that information out to the general public broadly and non-exclusively. It is intended to ensure that all investors have
the ability to gain access to material information at the same time.
Yahoo's Lawsuit Against Former Employee for Leaking Information to PressTric Park
Yahoo filed a lawsuit against Cecile Lal, who it identified as a former chief of staff to a senior vice president at the company, in Santa Clara County superior court. The claim alleges breach of contract and breach of a fiduciary duty of loyalty by Lal, who it says leaks confidential information to author and journalist Nicholas Carlson.
Are Millennials as reluctant to work for the government as the conventional wisdom suggests? A deeper dive into survey data indicates a more complex story—and steps that public agencies should consider to attract and retain younger workers. Learn more about Millennials in government in our latest report: http://deloi.tt/1PC6fWr
Cybersecurity Legal and Compliance Issues Business & IT Leaders Must Know -- ...Shawn Tuma
This presentation was delivered by Shawn E. Tuma, Cybersecurity and Data Privacy Attorney, at the January 27, 2017 meeting of (ISC)² Dallas Fort Worth Chapter.
This presentation was significantly updated from past presentations and included a discussion of the groundbreaking New York Department of Financial Services (NYDFS) Cybersecurity Requirements for Financial Services Companies.
The main points of this presentation are:
(1) Cybersecurity events create a crisis situation and should be treated as such;
(2) Cybersecurity incidents are as much legal events as they are IT or Business / Public Relations events;
(3) Companies must have a cybersecurity breach response plan in place and tested, in advance;
(4) While consumer class action data breach litigation is a significant threat to companies and their leadership, it is not as great of a threat as regulatory enforcement by agencies such as the FTC and SEC, or the shareholder derivative claims for officer and director liability; and
(5) The odds are that all company will be breached, but preparation and diligence can help minimize the likelihood that such a breach from being a catastrophic event.
This presentation addresses the role of attorneys as the first responders in leading their clients through cybersecurity and data loss crisis events. The discussion begins by looking at the risk business have of being the victim of a cybersecurity or data loss incident and examining the nature of such incidents and the crisis environment they create. Then, because of this crisis environment, the need for leadership in helping keep the parties calm, rational, and making deliberate, calculated decisions.
The discussion then explains why cybersecurity events are legal events and legal counsel is the natural leader that should fulfill this role and how they can do so. It will then discuss the process legal counsel will take, including assembling the key players in such an event, both internally and externally. It discusses the obligations for responding to such an event, the steps that must be taken, those that must be considered, and certain factors that go into the decision-making process. It briefly addresses the costs of such an incident and the liability issues that can arise from such an incident and failing to properly respond to the incident. This section includes a discussion of the cybersecurity lawsuit landscape, cybersecurity regulatory landscape, and the issue of cybersecurity-related officer and director liability stemming from shareholder derivative lawsuits based on cybersecurity incidents.
It concludes with a discussion of the steps that companies can take to prepare for and be in a better position to respond to and mitigate the negative repercussions of such an incident.
Launching a startup isn't easy. At each stage of scaling - from founding to product-market fit, from product-market fit to hyper growth, and from hyper growth to maturity - entrepreneurs face unique challenges. Greylock Partners hosted an event, called Greyscale, focused on these challenges at each stage. In the opening keynote, Jerry Chen of Greylock Partners discusses the state of enterprise software after the first quarter of 2016. He summarizes the private and public markets, M&A activity, and explains how this climate affects the startup environment.
The Hourglass Effect - A Decade of DisplacementFrank Rotman
A ten year look back and view into the future of the Personal Loans industry. Why did the Banks pull back at the same time that Lending Club and Prosper emerged? Why haven't the Banks come back? What's next?
Social media has moved from the fringes of techno geek culture to the mainstream with astonishing speed. The terms “social media” (or “social networking” or “Web 2.0”) is a catch-all for a variety of digital services, usually free to users and carrying advertising, perhaps the best known of which is Facebook.
A few years ago, this industry barely existed. Now it’s growing and evolving too quickly for anyone to keep pace with it. Where all this is going is impossible to predict, except to say that it is not going away, particularly given the proliferation of smartphones, iPads and tablets, and other mobile devices.
And as technology has always outpaced regulation, social media is no exception. Regulators in the US and Europe have so far issued only general regulatory guidance and still seem to be struggling to get their arms around the issue. As a result firms are skeptical about what steps they should take – if any – to start their foray into social media.
This paper gives firms a look at the four main social media outlets; provides tips in navigating these websites; and lays out a best practices framework for developing a comprehensive social media policy.
Disclaimer: This communication is provided by Advent Software, Inc. for informational purposes only and should not be construed as, and does not constitute, legal advice on any matter whatsoever discussed herein.
The Opening Bell - Disclosure Dilemma Part IIGus Okwu
Please find attached our weekly column, The Opening Bell. We value your feedback and opinion. So, please feel free to contact us with any questions and thoughts. Please send us a short email if you would like to be removed from the distribution list. Thanks for your interest and enjoy your weekend.
The last couple of years have seen significant impact of social media on stock markets, in general, and specific stocks in particular. This White Paper explores how new-age investors can leverage various social forums and new-media sources to get an edge in the stock market.
The benefits and risks of social media for financial communications (2)Business Wire
Financial communications have changed a great deal since the dawn of the commercial internet. And we're not done yet. In this research report, we review the history of financial disclosure, assess the risks associated with disclosure via today's social channels, and discuss the wide range of ways today's financial communicators can expand the visibility and impact of issued news via these same social channels.
This is a great read for anyone who does social media, investor relations or public relations for a publicly traded company.
Interested in RegFD? This paper is for you!
Only a few years ago, investors focused on one thing: the potential return on investment. Now, in the age of the purpose movement, gender diversity issues, and other factors, communication and investor relations experts are realizing their firms need to tell a much broader story. “Numbers are only part of the story now,” says Marshall. “In today’s market, investors scrutinize a wider range of things like culture, diversity and inclusion, and environmental and social sustainability.”
This presentation provides an overview of how companies, through their investor relations departments, are using social media to communicate with shareholders, analysts and investors.
The average person already has some familiarity with crowdfunding thanks to websites like Kickstarter. This and similar sites let individuals contribute relatively small amounts of money to help new businesses purchase the equipment they need to begin operating. For more information about crowdfunding visit http://www.crowdfundconnect.com
Cybersecurity Legal and Compliance Issues Business & IT Leaders Must Know -- ...Shawn Tuma
This presentation was delivered by Shawn E. Tuma, Cybersecurity and Data Privacy Attorney, at the January 27, 2017 meeting of (ISC)² Dallas Fort Worth Chapter.
This presentation was significantly updated from past presentations and included a discussion of the groundbreaking New York Department of Financial Services (NYDFS) Cybersecurity Requirements for Financial Services Companies.
The main points of this presentation are:
(1) Cybersecurity events create a crisis situation and should be treated as such;
(2) Cybersecurity incidents are as much legal events as they are IT or Business / Public Relations events;
(3) Companies must have a cybersecurity breach response plan in place and tested, in advance;
(4) While consumer class action data breach litigation is a significant threat to companies and their leadership, it is not as great of a threat as regulatory enforcement by agencies such as the FTC and SEC, or the shareholder derivative claims for officer and director liability; and
(5) The odds are that all company will be breached, but preparation and diligence can help minimize the likelihood that such a breach from being a catastrophic event.
This presentation addresses the role of attorneys as the first responders in leading their clients through cybersecurity and data loss crisis events. The discussion begins by looking at the risk business have of being the victim of a cybersecurity or data loss incident and examining the nature of such incidents and the crisis environment they create. Then, because of this crisis environment, the need for leadership in helping keep the parties calm, rational, and making deliberate, calculated decisions.
The discussion then explains why cybersecurity events are legal events and legal counsel is the natural leader that should fulfill this role and how they can do so. It will then discuss the process legal counsel will take, including assembling the key players in such an event, both internally and externally. It discusses the obligations for responding to such an event, the steps that must be taken, those that must be considered, and certain factors that go into the decision-making process. It briefly addresses the costs of such an incident and the liability issues that can arise from such an incident and failing to properly respond to the incident. This section includes a discussion of the cybersecurity lawsuit landscape, cybersecurity regulatory landscape, and the issue of cybersecurity-related officer and director liability stemming from shareholder derivative lawsuits based on cybersecurity incidents.
It concludes with a discussion of the steps that companies can take to prepare for and be in a better position to respond to and mitigate the negative repercussions of such an incident.
Launching a startup isn't easy. At each stage of scaling - from founding to product-market fit, from product-market fit to hyper growth, and from hyper growth to maturity - entrepreneurs face unique challenges. Greylock Partners hosted an event, called Greyscale, focused on these challenges at each stage. In the opening keynote, Jerry Chen of Greylock Partners discusses the state of enterprise software after the first quarter of 2016. He summarizes the private and public markets, M&A activity, and explains how this climate affects the startup environment.
The Hourglass Effect - A Decade of DisplacementFrank Rotman
A ten year look back and view into the future of the Personal Loans industry. Why did the Banks pull back at the same time that Lending Club and Prosper emerged? Why haven't the Banks come back? What's next?
Social media has moved from the fringes of techno geek culture to the mainstream with astonishing speed. The terms “social media” (or “social networking” or “Web 2.0”) is a catch-all for a variety of digital services, usually free to users and carrying advertising, perhaps the best known of which is Facebook.
A few years ago, this industry barely existed. Now it’s growing and evolving too quickly for anyone to keep pace with it. Where all this is going is impossible to predict, except to say that it is not going away, particularly given the proliferation of smartphones, iPads and tablets, and other mobile devices.
And as technology has always outpaced regulation, social media is no exception. Regulators in the US and Europe have so far issued only general regulatory guidance and still seem to be struggling to get their arms around the issue. As a result firms are skeptical about what steps they should take – if any – to start their foray into social media.
This paper gives firms a look at the four main social media outlets; provides tips in navigating these websites; and lays out a best practices framework for developing a comprehensive social media policy.
Disclaimer: This communication is provided by Advent Software, Inc. for informational purposes only and should not be construed as, and does not constitute, legal advice on any matter whatsoever discussed herein.
The Opening Bell - Disclosure Dilemma Part IIGus Okwu
Please find attached our weekly column, The Opening Bell. We value your feedback and opinion. So, please feel free to contact us with any questions and thoughts. Please send us a short email if you would like to be removed from the distribution list. Thanks for your interest and enjoy your weekend.
The last couple of years have seen significant impact of social media on stock markets, in general, and specific stocks in particular. This White Paper explores how new-age investors can leverage various social forums and new-media sources to get an edge in the stock market.
The benefits and risks of social media for financial communications (2)Business Wire
Financial communications have changed a great deal since the dawn of the commercial internet. And we're not done yet. In this research report, we review the history of financial disclosure, assess the risks associated with disclosure via today's social channels, and discuss the wide range of ways today's financial communicators can expand the visibility and impact of issued news via these same social channels.
This is a great read for anyone who does social media, investor relations or public relations for a publicly traded company.
Interested in RegFD? This paper is for you!
Only a few years ago, investors focused on one thing: the potential return on investment. Now, in the age of the purpose movement, gender diversity issues, and other factors, communication and investor relations experts are realizing their firms need to tell a much broader story. “Numbers are only part of the story now,” says Marshall. “In today’s market, investors scrutinize a wider range of things like culture, diversity and inclusion, and environmental and social sustainability.”
This presentation provides an overview of how companies, through their investor relations departments, are using social media to communicate with shareholders, analysts and investors.
The average person already has some familiarity with crowdfunding thanks to websites like Kickstarter. This and similar sites let individuals contribute relatively small amounts of money to help new businesses purchase the equipment they need to begin operating. For more information about crowdfunding visit http://www.crowdfundconnect.com
Due in 12 hours from the downpaymentEvaluate the qualities of effe.docxhasselldelisa
Due in 12 hours from the downpayment
Evaluate the qualities of effective corporate governance.
Use technology and information resources to research issues in advanced financial management.
Write clearly and concisely about advanced financial management using proper writing mechanics.
On the first page or in a header, include the title of the assignment, the student’s name, the
professor’s name, the course title, and the date. Title and reference pages are not included in the assignment page length.
Paper needs to cover the following sections in around 10-12 pages (suggested):
Section1. Executive summary of the paper
Section 2. Briefly describe the type of financing that was being used here and why it was used for each round of funding.
Section3. Speculate as to what the money was used for after each successive round of financing. (Don’t forget, Facebook was raising money to finance certain projects.)
Section4. Provide an explanation behind the company’s bubbly corporate valuation during this time.
Section5. Determine how outside investors were valuing this company. (Hint: look at similar businesses.)
Section6. Estimate the company’s major financial numbers (revenue ,net income, or other financial metrics) during each of rounds for financing.
Section7. Conclusion
Background:
The past two modules have been a bit of a mash-up of different ideas and tools, which makes it difficult to ask you to perform a neat, simple task that covers all the material that we covered. Instead, we’re going to ask you to synthesize the bigger concepts from past lectures. We’re going to do so using a company that most everyone is familiar with: Facebook.
Facebook, as everyone pretty much knows now, rocketed to popularity starting in 2005 and hasn’t looked back since. As you might expect from a highly successful, capital-intensive, hightech operation that’s growing at blazing speeds, the company has gone through several rounds of financing to finance business growth. We’re going to ask you to look at that financing and explain to us what happened.
Though a savvy researcher could find these transactions herself via Google if she truly wanted to, we’ve gone ahead and pulled the big ones up for you in chronological order to save you some time. We encourage you to investigate each of these further, however. There’s no shortage of background on each of these. Here they are in nice news-bite capsules for digestion:
The Facebook group announced that it has raised between $10 million to $12 million in first-round financing led by Accel Partners on April 15, 2005. As a part of the transaction, Jim Beyers, a Managing Partner at Accel Partners, joined the company's board. The post-money valuation of the company was $100 million.
Facebook, Inc. announced that it has raised $27.5 million in its third round of funding led by new investor Greylock Partners on April 19, 2006. New investor MeriTech Capital Partners and existing investor Accel Partners invested in the transaction..
Evaluate the qualities of effective corporate governance.Use techn.docxPOLY33
Evaluate the qualities of effective corporate governance.
Use technology and information resources to research issues in advanced financial management.
Write clearly and concisely about advanced financial management using proper writing mechanics.
On the first page or in a header, include the title of the assignment, the student’s name, the
professor’s name, the course title, and the date. Title and reference pages are not included in the assignment page length.
Paper needs to cover the following sections in around 10-12 pages (suggested):
Section1. Executive summary of the paper
Section 2. Briefly describe the type of financing that was being used here and why it was used for each round of funding.
Section3. Speculate as to what the money was used for after each successive round of financing. (Don’t forget, Facebook was raising money to finance certain projects.)
Section4. Provide an explanation behind the company’s bubbly corporate valuation during this time.
Section5. Determine how outside investors were valuing this company. (Hint: look at similar businesses.)
Section6. Estimate the company’s major financial numbers (revenue ,net income, or other financial metrics) during each of rounds for financing.
Section7. Conclusion
Background:
The past two modules have been a bit of a mash-up of different ideas and tools, which makes it difficult to ask you to perform a neat, simple task that covers all the material that we covered. Instead, we’re going to ask you to synthesize the bigger concepts from past lectures. We’re going to do so using a company that most everyone is familiar with: Facebook.
Facebook, as everyone pretty much knows now, rocketed to popularity starting in 2005 and hasn’t looked back since. As you might expect from a highly successful, capital-intensive, hightech operation that’s growing at blazing speeds, the company has gone through several rounds of financing to finance business growth. We’re going to ask you to look at that financing and explain to us what happened.
Though a savvy researcher could find these transactions herself via Google if she truly wanted to, we’ve gone ahead and pulled the big ones up for you in chronological order to save you some time. We encourage you to investigate each of these further, however. There’s no shortage of background on each of these. Here they are in nice news-bite capsules for digestion:
The Facebook group announced that it has raised between $10 million to $12 million in first-round financing led by Accel Partners on April 15, 2005. As a part of the transaction, Jim Beyers, a Managing Partner at Accel Partners, joined the company's board. The post-money valuation of the company was $100 million.
Facebook, Inc. announced that it has raised $27.5 million in its third round of funding led by new investor Greylock Partners on April 19, 2006. New investor MeriTech Capital Partners and existing investor Accel Partners invested in the transaction. The post money valuation of the comp ...
Evaluate the qualities of effective corporate governance.Use techn.docx
the opening bell jan 10 2013
1. The Opening Bell: Disclosure Dilemma
January 10, 2013
by Gus Okwu
As the first full week of 2013, we want to take a closer look at an issue that ironically speaks to a need
for clearer guidance from the Securities and Exchange Commission (SEC); the Reg FD (also known as
Regulation Financial Disclosure). For those of you unaware of the rule, Reg FD was adopted by the SEC
in 2000 and was designed to prohibit the practice of “selective disclosure”. In prior years, it was
common for companies to provide material information to a select group of analysts and investors prior
to disclosing it publicly. In principle, Reg FD was intended to ensure that all investors have equal
access to market information at the same time.
With that as a backdrop, on December 5, Netflix Inc. and its CEO, Reed Hastings, both received Wells
Notices from the SEC regarding a Facebook post that Mr. Hastings made in July. (A Wells Notice is a
notification from the SEC that it intends to recommend enforcement action against a company or an
individual.) Mr. Hasting’s July Facebook post was essentially a congratulatory note to Netflix’s licensing
team for exceeding a milestone for monthly viewing hours. Mr. Hasting’s post also included a positive
prediction regarding the direction of the metric as shown in his post provided below. It’s important to
note that Netflix did not file a Form 8-K or issue a press release at the time of Mr. Hasting’s post. Of
equal importance is the fact that Mr. Hastings habitually posts company information on his Facebook
page. He is also widely regarded as one of corporate America’s most active users of social media with
over 200,000 subscribers to his Facebook account.
2. Netflix eventually filed an 8-K on December 5th after receiving the Wells Notice informing investors of
the SEC’s action. An exhibit to the company’s 8-K included a statement from Mr. Hastings expressing
his belief that the SEC’s application of Reg FD was wrong in this case.
A more recent case involves Elon Musk, CEO of Tesla Motors Inc., who, on December 10th, went on
Twitter to state that he was “…happy to report that Tesla was narrowly cash flow positive last week.
Continued improvement expected through year end.”
As Dan Primack of Fortune published, this was the first time that any news on Tesla reaching cash flow
positive had been disclosed, and it was not retweeted on Tesla’s official Twitter feed nor was it posted
on the company’s IR website or in any of its SEC filings around that date.
Five days later, Mr. Musk appeared on CNBC in support of Solar City’s IPO, where he sits as the
company’s Chairman. In response to a question as to whether he was concerned about being served
with a Wells Notice, as Mr. Hastings and Netflix experienced only a week and a half before, Mr. Musk
defended himself stating that his Tweet was not an example of selective disclosure. According to Mr.
Musk, who has 121,600 Twitter followers, the Tweet was one of several channels that were used in
addition to “follow up with investors”.
And here in lies the rub. There’s no denying the factors that compelled the SEC to implement Reg FD.
It was an attempt to level the playing field amongst all types of investors – big and small – though there
remain inherent advantages available to the larger investor. The primary issue that needs to be
revisited seems pretty apparent to most market observers. And that is one of obsolescence – the rules
as currently delineated are no longer relevant.
Reg FD was implemented in 2000, more than a decade ago. During that time, Internet users in the US
have grown from 121 million to 244 million users as of year-end 2011. The jump in Internet
usage corresponds with an increase in the use of social media for the distribution of political, business
and entertainment news. Many of us load up on our daily news fix through websites such as Twitter,
Facebook and LinkedIn as well as conventional news outlets such as Bloomberg, The New York Times,
CNBC and others. And with this shift in how we get our news, business leaders are adapting to these
trends and turning to the Internet as a primary vehicle for disseminating news, and opining on trends
and developments driving their industries.
But despite these monumental shifts in communication behavior since Reg FD was initially adopted, the
SEC has not found a reason to review the broad framework that dictates the manner in which the rule
3. is applied. That framework requires public companies to disclose material information to all investors
at the same time which has historically meant issuing a press release and filing a Form 8-K with the
SEC.
Hastings and Musk each have more than 100,000 followers on websites that could be regarded as viable
vehicles for delivering information to investors. However, as the Deal Professor, Steven Davidoff of The
New York Times recently wrote, this speaks to the SEC’s assertion that a website or blog could be
viewed as public for Reg FD purposes if it was a “recognized channel of distribution of information”.
(It’s worth noting that this update in guidance by the SEC was done in 2008 and represents the agency’s
most recent clarification of the rule.) Consequently, the primary criteria to be used in evaluating
public disclosure are based on where the disclosure was made, and whether investors recognize the
venue as a depositary for regularly released information.
One can only hope that the SEC identifies these two cases as an opportunity to revisit Reg FD and
revise it accordingly. If nothing is done, this could have a reverse effect as companies will simply
refuse to use social media for disclosure given the lack of clarity in SEC guidance. And reduced
corporate disclosure will result in less information flow which, in turn, will make it more difficult for
analysts to value companies. All this will lead to more volatility which is exactly what Reg FD was
initially created to prevent.
In the interim, it would be wise for all companies to follow some basic rules covering the activities of
senior management on social media:
Ensure that any and all social media submissions by senior management are reviewed and signed-
off by the IRO/IR agency and senior counsel prior to posting.
File a Form 8-K with the SEC that includes an exhibit containing senior management’s social media
post.
Explain in a disclosure policy, posted on the company’s website, how Twitter and other social
media websites are used for disclosure.
Provide a note in all press releases and SEC filings explaining how the company uses Twitter and
other social media websites for disclosure and provide the full URL(s) for the relevant accounts.
Create prominent links to the company’s and senior management’s social media websites on the
IR website providing investors with immediate access to all postings.
Create a separate Twitter account exclusively for corporate or investor information in order to
ensure that material information is easily viewed.
Establish a pattern of using Twitter and other social media websites to disseminate company
disclosure information.
4. About the Opening Bell
Gus Okwu manages the International Financial Communications/IR group at Allison+Partners. Prior
to joining the firm, he spent more than 20 years working on Wall Street as a senior equity analyst
at Wachovia Securities covering telecoms, and as a senior debt analyst at Fitch Ratings and as a
banker. The Opening Bell’s team has accumulated decades of experience in investor relations,
financial communications, public relations, equity research, proxy work and journalism.
This column is meant to provide Allison+Partners’ clients and interested parties with a better sense
of the issues driving the capital markets and in particular, areas covering research, trading,
financial communications and investor relations. Through our weekly submissions, we hope to
provide you with a better sense of how to navigate through issues covering corporate and financial
disclosure, valuations and corporate governance – some areas to be emphasized more than others.
We aim on presenting ourselves as an independent source of news, analysis and commentary and
appreciate any opportunity to learn from others with deeper experience or insights on issues
raised. Consequently, we encourage feedback with respect to the content submitted. If you would
like to contact The Opening Bell with suggestions, comments or corrections, please email us at
gus@allisonpr.com.