SEC Warns Netflix CEO Over Post on Facebook

Agency says it's not the same as informing investors
By John Johnson,  Newser Staff
Posted Dec 6, 2012 6:56 PM CST
Reed Hastings, CEO of Netflix, in a 2010 file photo.   (AP Photo/The Canadian Press, Adrien Veczan)

(Newser) – Netflix finally got some happy headlines this week thanks its Disney deal, but the SEC has likely spoiled the good mood of CEO Reed Hastings with an unusual lawsuit threat. The agency notified the company that it might file a civil suit because of a Facebook post and blog entry made by Hastings earlier this year, reports the San Francisco Chronicle. In the posts, Hastings boasted that the company had hit the milestone of 1 billion hours of streaming a month.

That's lovely, says the SEC, but Hastings needs to impart information like that to all of the company's investors, and a Facebook post doesn't cut it. Hastings has posted a response on, yes, Facebook, in which he disagrees on two main points, notes the Wall Street Journal: He says he has more than 200,000 followers, which makes his account "very public," and he argues that the milestone news wasn't "material" to investors. "We remain optimistic this can be cleared up quickly through the SEC’s review process." (Read more Netflix stories.)

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