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."

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Showing 3 of 12 comments
DougMasters
Dec 7, 2012 7:32 AM CST
... Investors and shareholders don't run your business for a reason. Companies need to stop catering to investors and shareholders so hard. It's fumdamentally unsound to do so so hard so often. As to this issue more specifically, I have to agree with the suit to a certain extent. It isn't like they are complaining about his companies operation they are complaining they weren't well informed on certain things that relate to the value of stock of which is their purpose, investing and ownership into the business. That being said, it doesn't sound like that big a deal I tend to be indifferent to rich people bitching about shares and money. Those are rich men with rich men problems.
InferiorToYou
Dec 7, 2012 6:08 AM CST
Seems like a really lame defense. He probably got the news himself out of a newspaper.
right2dave
Dec 6, 2012 11:18 PM CST
Obama soon to be named Netflix CEO!