Netflix gets SEC notice over CEO's Facebook post
FILE - In this July 11, 2012 file photo, Netflix CEO Reed Hastings attends the Allen & Company Sun Valley Conference in Sun Valley, Idaho. Netflix Inc. is facing scrutiny from government regulators for a Facebook post by Hastings in July that may have boosted the online video company’s stock price. Neflix said Thursday, Dec. 6, 2012, that the Securities and Exchange Commission informed it that its staff is recommending civil action be brought against the company and Hastings. The reason: Hastings’ July 3 post in which he said Netflix’s online video viewing “exceeded 1 billion hours for the first time ever in June.” (AP Photo/Paul Sakuma, File)
NEW YORK, N.Y. - Netflix says it is facing scrutiny from government regulators over a Facebook post made by CEO Reed Hastings in July.
The company disclosed Thursday that the Securities and Exchange Commission sent notices to Netflix Inc. and Hastings regarding the July 3 public post on Hastings' account. The SEC sent "Wells Notices," giving Netflix and Hastings a chance to argue why the agency should not take action against them.
On July 3 Hastings wrote on Facebook that monthly viewing on Netflix had exceeded 1 billion hours in June. The SEC says that is material investor information that must be disclosed in a regulatory filing or press release. The company says the information isn't material because a few weeks earlier it disclosed on its blog that subscribers were viewing almost a billion hours of content per month. That announcement also was not announced in a press release or an SEC filing.
Shares of the Los Gatos, Calif., company jumped 13.4 per cent on July 5.
Hastings responded to the notices with a post on Facebook that was also filed with the SEC, calling it a "fascinating social media story."
Netflix shares rose $2.80, or 3.4 per cent, to $86.17 on Thursday after the company announced a multi-year licensing deal with Disney. The stock fell $1.39 to $84.78 in after-hours trading.
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