Friday, June 9, 2023

Netflix Gets SEC Warning for Violating Facebook Public Disclosure Rules

On Thursday Netflix and its chief executive Reed Hastings received a notice from US S.E.C for violating the public disclosure rules of Facebook. The action had to be taken against the company after Hastings posted a praise statement for his company .

The statement said ,”Netflix monthly viewing exceeded 1 billion hours for the first time ever in June.” The post was viewed by more than 244,000 Facebook users.

Hastings dismissed the controversy and said that Facebook post was not “material” information. It is being considered that Netflix did not abide by SEC’s Regulation FD which came into motion in 2000. The regulation clearly says that companies need to make full and fair public revelation of material non-public information.

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“We think posting to over 200,000 people is very public, especially because many of my subscribers are reporters and bloggers,” Hastings said on Thursday in a letter. He also said that he did not believe the Facebook posting was “material” information.

The controversy was the last thing Netflix wanted in such testing times. The company is anyhow is on its way to slash its business of renting out DVD’s. Two months before in October investor Carl C. bought 10 percent shares of the company.

Shares of Netflix plummeted by 1.3 percent in after-hours trading on Thursday, at $85.02.

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“We remain optimistic this can be cleared up quickly through the S.E.C.’s review process,” Mr. Hastings wrote on Facebook, a post that was filed with regulators.

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