Netflix chief’s Facebook pos attracts SEC notice

The Securities and Exchange Commission may possibly press a civil claim against DVD and videostreaming company Netflix Inc and its CEO, Reed Hastings, over a July Facebook post by Hastings that came with Netflix's biggest stock gain in nearly six weeks, according to a Bloomberg report.

The July Facebook post by Hastings referred to the company's subscribers exceeding 1 billion hours of video in June. According to Netflix, the company's stock surged 6.2 per cent that day.

The issue concerns violation of Regulation Fair Disclosure, under which companies are required to disseminate such information through a press release on a widely available news or wire service or by "any other nonexclusionary method," Bloomberg said.

Netflix, which has a DVD distribution centre in Coppell, has over 200,000 Facebook fans.
 
Dismissing  the contention Reed said he did not believe the Facebook post was "material" information.

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

Netflix has been served with a so called Wells Notice by the US Securities and Exchange Commission, which means the SEC staff would recommend the full commission pursue either a cease-and-desist action and/or a civil injunction against Netflix and Hastings over the alleged violation.