NetFlix CEO in hot water with Feds over FarceBook post

[Anti Federalist]

SMH...


Netflix says CEO's Facebook post triggered SEC notice

http://www.reuters.com/article/2012/12/07/us-netflix-sec-idUSBRE8B51IP20121207

(Reuters) - Netflix Inc said on Thursday securities regulators warned they may bring civil action against the company and its chief executive for violating public disclosure rules with a Facebook post, in a case that raises questions about how public companies communicate on social media.

The high-profile Silicon Valley CEO, Reed Hastings, dismissed the contention and said he did not believe the Facebook post was "material" information.

Hastings wrote in the post on the company's public Facebook page on July 3: "Netflix monthly viewing exceeded 1 billion hours for the first time ever in June." The post was accessible to the more than 244,000 subscribers to the page.

Netflix received what is known as a Wells Notice from the U.S. Securities and Exchange Commission, which means the SEC staff will recommend the full commission pursue either a cease-and-desist action and/or a civil injunction against Netflix and Hastings over the alleged violation.

Netflix may have fun afoul of the SEC's Regulation FD, adopted in 2000, which requires public companies to make full and fair public disclosure of material non-public information.

[ghengis86]

I don't think it was just the FarceBook post; him being an idiot should help them pile on the charges (when the SEC isn't watching midget tranny porn):

http://www.zerohedge.com/news/2012-12-06/netflix-ceo-receives-wells-notice-sec-alleges-reg-fd-violation

The antics of the world's most cartoonish CEO, that would be NFLX' Reed Hastings of course, who once upon a time posted on Seeking Alpha telling naysayers not to short him, bro, (only to continue sell his company's stock even as NFLX proceeded to use corporate money to buyback its own stock in the $200+ area), before promptly collapsing to multi-year lows, has finally been called to task by none other than that other most cartoonish of organizations: the SEC, which is now desperate to clean up its image as the bulk of the most coopted personnel are jumping ship, and will likely end up in various Wall Street companies.

NETFLIX, CEO RECEIVED WELLS NOTICE FROM SEC STAFF
NETFLIX CEO SAYS SEC STAFF QUESTIONED FACEBOOK POST
NETFLIX CEO SAYS SEC STAFF RECOMMENDS CIVIL ACTION
NETFLIX CEO SAYS SEC STAFF CITES 'REG FD' VIOLATION
NFLX SAYS DOESN'T USE FB TO GET MATERIAL INFO TO INVESTORS

A cartoon investigating a cartoon: what can one say- truly a match made in heaven. We wonder what would happen if the SEC were to actually inquire about the accounting of billions in off balance sheet liabilities. Actually, nevermind.

[matt0611]

So much for free speech in this country. "How dare you tell people how many subscribers you have!!"

WTF? I'm beginning to believe this country is beyond repair.

[jj-]

so how is what he said a big deal? it's sort of a random irrelevant comment, isn't it?

[Kords21]

Must not have voted for Obama

[fr33]

Although I despise Reed Hastings for past actions, I don't understand what he did wrong here.

[specsaregood]

so how is what he said a big deal? it's sort of a random irrelevant comment, isn't it?

I'd assume some govt agent figured there is a fine somewhere in there and a bonus for him.

[bolil]

The real question is, and the true violation within: Who, higher on the pyramid, did he piss off and how,

[Occam's Banana]

Although I despise Reed Hastings for past actions, I don't understand what he did wrong here.

He did nothing wrong - absolutely nothing whatsoever. The "law," however, has absolutely nothing whatsoever to do with "right" or "wrong." (Three cheers for legal positivism ...)

The "law" - as it currently stands - is nothing more than a byzantine booby-trap used by regulators & "law" enforcers to show people "who is boss."

[GunnyFreedom]

"the law" is mostly a racket for lawyers.

[tod evans]

This is it in a nutshell...


He did nothing wrong - absolutely nothing whatsoever. The "law," however, has absolutely nothing whatsoever to do with "right" or "wrong." (Three cheers for legal positivism ...)

The "law" - as it currently stands - is nothing more than a byzantine booby-trap used by regulators & "law" enforcers to show people "who is boss."


"the law" is mostly a racket for lawyers.

[KingNothing]

I love Netflix. I'll never understand why people rage against it, and I will never, ever, understand how his Facebook post is a problem.

[kathy88]

I watched some of Sqwauk Box this morning and they were talking about this. Apparently their beef with it is that the announcement "artificially" inflated their stock.

[Anti-Neocon]

What's wrong with it? If things like this were legal, insider trading would be so much more plentiful and profitable. If you're against regulations to try to limit the amount of insider trading, fine, but this isn't simply a matter of free speech.

[MikeStanart]

Someone sue Mcdonalds! They have a sign that says "Billions served"!!!!

[ghengis86]

It is viewed as material, non-public business information. FarceBook is not public. You have to have an account and must log in. The shareholders on FarceBook got access to material, non-public business information while those not on FarceBook did not. It was material information as the stock rose significantly after the private disclosure of information, to which those who had access to the information were able to financially benefit.

/devil's advocate

[ghengis86]

Someone sue Mcdonalds! They have a sign that says "Billions served"!!!!

The sign is public ally displayed. No password or log in needed to view it

[KingNothing]

Someone sue Mcdonalds! They have a sign that says "Billions served"!!!!

That's exactly what I was thinking.

[KingNothing]

It is viewed as material, non-public business information. FarceBook is not public. You have to have an account and must log in. The shareholders on FarceBook got access to material, non-public business information while those not on FarceBook did not. It was material information as the stock rose significantly after the private disclosure of information, to which those who had access to the information were able to financially benefit.

/devil's advocate

Oh. So there's that.

So Facebook isn't public information. That seems like an interesting stance for members of our government's enforcement arm to take.

[ghengis86]

Oh. So there's that.

So Facebook isn't public information. That seems like an interesting stance for members of our government's enforcement arm to take.

Lol, yep. Public for them, private for you.

[TonySutton]

McDonalds has sold billions of burgers, go get 'em.

[devil21]

I love Netflix. I'll never understand why people rage against it, and I will never, ever, understand how his Facebook post is a problem.



I watched some of Sqwauk Box this morning and they were talking about this. Apparently their beef with it is that the announcement "artificially" inflated their stock.

He broke the cardinal rule that you only get to pump your company during CNBC interviews.

[nobody's_hero]

If only Ben Bernanke had done something like point at Netflix and announce he was about to dump $100 billion dollars into their company, then it would most definitely not have been any sort of 'insider shenanigans.' As we know, that is considered perfectly legal and ethical behavior in the eyes of our government.