Executives Rejoice: The SEC Recognizes Twitter For Public Disclosure

How quickly things change.

Three short months ago we were warning executives against disclosing company information via tweets because the U.S. Securities and Exchange Commission (SEC) didn’t ‘get’ Twitter.

And today, the SEC announced it will consider Twitter (and Facebook) as valid public disclosure sources, assuming investors have been alerted to monitor these accounts.

Bloomberg confirmed the change today:

The SEC confirmed that a regulation which prohibits companies from disclosing material information to select sets of investors applies to social media and other emerging means of communication the same way it applies to company websites. Company communications made through social media channels could constitute a violation of the fair disclosure rule known as Regulation FD if investors had not been told in advance where the information would be posted, the SEC said.

The SEC’s guidance “is flexible enough to address questions that arise for companies that choose to communicate through social media, and the guidance does so in a straightforward manner,” Lona Nallengara, acting director of the SEC’s corporation finance division, said in a statement.

This would’ve saved Zipcar some speedy filing trauma and, of course, none of this would have come about if it hadn’t been for the very public Netflix Facebook post fiasco.

And it all could’ve been headed off had they just listened to one media entrepreneur’s (then) unconventional approach to disclosure back in 2011. After being approached about his tweets spanning “future acquisitions, stock option purchases and new services,” WebMediaBrands (the parent company of this site) CEO Alan Meckler and his team responded:

However, while the company considered the issue moot since Reg FD was not at issue, Reynolds suggested that the CEO’s tweets “might qualify as ‘public disclosures’ under Regulation FD” and the SEC’s interpretive guidance.

Reynolds said that the tweets could be seen as meeting the two main requirements of the SEC’s guidance: 1)  that the site is a recognized channel of distribution; and 2) postings on the site disseminate the information in a manner making it available to the securities marketplace in general.

But all’s well that ends well, we suppose. We’re just glad that logic finally prevailed.

(Jumping image from Shutterstock)

@MaryCLong maryclong@digitalmediaghost.com Mary C. Long is Chief Ghost at Digital Media Ghost. She writes about everything online and is published widely, with a focus on privacy concerns, specifically social sabotage.
Publish date: April 2, 2013 https://dev.adweek.com/digital/sec-recognizes-twitter/ © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT