Even the feds are having to adapt to social media.
On Tuesday, the Securities and Exchange Commission (SEC) said it is OK for public companies to make key announcements through social media sites, such as Twitter and Facebook, as long as these companies first indicate they'll be using social media to communicate.
The SEC’s acting enforcement director, George Canellos, issued the following statement:
“One set of shareholders should not be able to get a jump on other shareholders just because the company is selectively disclosing important information. Most social media are perfectly suitable methods for communicating with investors, but not if the access is restricted or if investors don't know that's where they need to turn to get the latest news.”
According to the Chicago Tribune
“Under the new guidelines released on Tuesday, companies could take steps such as noting on websites and press releases that they will use social media to make announcements and giving web addresses for their pages. That would give investors the chance to subscribe to or join the right sites, the SEC said.”
The Wall Street Journal published an FAQ
on the SEC and social media.
The announcement on Tuesday is a chance in policy for the SEC, which launched an investigation last year
when Netflix CEO Reed Hastings posted to his personal Facebook page that the company had surpassed one billion hours of movie and TV show streaming.
The SEC thought Hastings and Netflix may have been in violation of Regulation Fair Disclosure, or Reg FD, which basically states that information must be shared with investors at the same time it’s shared with the public. In the Digital Age, this is a tough task.
Critics have said
the SEC has failed to keep up with the changing dynamics of corporate and investor communications.