Netflix investigated for CEO disclosures on Facebook

The SEC says numbers posted by CEO Reed Hastings on his Facebook page were not public enough to satisfy disclosure laws

How "public" are public Facebook posts?

Not enough for investors, according to the U.S. Securities and Exchange Commission. The SEC has launched an investigation into U.S. online video giant Netflix, after the company's CEO posted user numbers on his personal Facebook page, instead of an official release by the company.

Netflix CEO Reed Hastings, calling the case a "Fascinating social media story," said it dates back to a July posting he made on Facebook, in which he said over 1 billion hours of content were viewed by users in June. The company made no accompanying press release or financial filing, but Reed has over 200,000 subscribers that can view his public posts.

"SEC staff informed us yesterday that they are recommending that the SEC bring a civil action against us for my July 1 billion hour public post," Reed wrote on Facebook Thursday.

At the core of the case is whether the Netflix CEO's postings on his personal, but openly viewable, Facebook page are sufficiently "official" or "public" enough for investing laws. This is opposite to the more common dilemma around postings to Facebook and other social networks, in which individuals are punished for public messages or pictures that were meant for viewing by friends and family.

The SEC said in a separate filing posted earlier this week that it will recommend legal action against Netflix and possibly Reed for "violations of Regulation Fair Disclosure."

Reed argues that his Facebook postings, which are viewable by anyone, are sufficiently "public" that the company did not need to make an official filing on the subject. He also says that the billion-hour figure was not important enough to investors to require an official release from Netflix, noting that the company had posted a similar number on its blog a few weeks earlier.

In a June 4 posting to announce a new delivery network, the company's official blog noted that "Around the world, people are enjoying nearly a billion hours per month of movies and TV shows from Netflix."

In his latest Facebook posting, Reed said that he and his company "remain optimistic this can be cleared up quickly through the SEC's review process."

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags governmentregulationinternetlegalvideoe-commercenetflixInternet-based applications and services

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Jay Alabaster

IDG News Service
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?