
Netflix CEO Hastings faces SEC action over Facebook post - jpwagner
http://www.businessweek.com/news/2012-12-06/netflix-ceo-hastings-faces-sec-action-over-facebook-post
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rickdale
If the government wants to get you they will get you. Thats true on all
levels.

The Charlie Moore quote, claiming a facebook post is basically a press release
and saying the SEC may need to play catch up is what catches my attention
here. I would suggest to play it safe and release a press release as well, but
my guess is Hastings knew what he was doing.

~~~
sageikosa
Maybe he just wanted to shake the "press/government" duopoly. Let's face it, a
press release these days may actually reach fewer people than a Facebook
posting.

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joonix
I don't see how hours viewed is material at all. It doesn't even reflect the
number of users, just usage. If 1,000 users watch 24 hours per day non stop,
it doesn't mean more money for Netflix.

There is a lot of serious stuff going on out there that SEC should be
pursuing, not nonsense like this.

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MediaSquirrel
It matters because it a) determines the companies costs which directly affect
profits, and b) indicates engagement and the likelihood that subscribers will
quit.

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tankbot
Remember when McDonalds got in trouble for putting "Over a million served." on
their signs? Or the scads of other businesses that the SEC routinely cracks
down on for similar announcements? The criminals at Netflix should hang for
this crime.

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debacle
I think you're being sarcastic, but I can't tell. Please remember that this is
the Internet and someone has probably misjudged your intent with this
statement.

~~~
tankbot
It's obvious, and you can too tell. I'm not worried about the comment being
misunderstood, there are thick people everywhere and the Internet is no
exception. Besides, this is just a friendly discussion forum, it's not like
I'm Jonathan Swift.

~~~
sp332
It was only obvious in the last sentence. It's impossible to read tone over
the internet, and there are enough legitimate crackpots that you need to label
sarcasm or risk being taken at face value.
<http://en.wikipedia.org/wiki/Poe%27s_law>

~~~
tankbot
Technically it was irony, and the only sentence that wasn't obvious was the
second. In this situation there is no risk to being taken at face value so
Poe's Law is _meh_.

However, this does tell me that my phrasing needs work. Ever notice how some
people's writing perfectly conveys intended tone while some (myself) are
misunderstood? I think improving in this area is valuable so I do appreciate
the feedback from you and the GP, even if there were plenty of upvotes on my
comment.

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rayiner
"May face" is the key word here. The SEC is likely investigating the issue to
see if he was using Facebook to give material information preferentially to a
subset of investors. An investigation is quite far away from being an actual
lawsuit.

As for people asking why the SEC goes after stuff like this--the SEC's
authority is pretty narrow. We use a very free-market regulatory model for
public companies. Instead of telling them what to do, we basically police the
information they put out to the public, and depend on the markets to act on
that information to punish bad corporate governance and reward good corporate
governance. Pretty much the whole authority of the SEC revolves around
disclosure.

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elithrar
If the post was available to non-Facebook users (and I assume it was, as
that's the default "Public" category behaviour), then the SEC is _really_
picking at straws here.

~~~
shawn-butler
Hmm, when I go to <https://www.facebook.com/reed1960> I am presented with a
login screen. When I click the "CLOSE" button I see no information.

How is that information available to the public exactly? Am I missing
something?

~~~
natrius
The direct link to the post is publicly accessible. A Facebook account is
necessary to subscribe to posts, but you used to have to _pay_ for a newspaper
to see press releases.

<https://www.facebook.com/reed1960/posts/10150955446914584>

~~~
shawn-butler
Sounds like an opportunity. Gather posts by executives and add to an activity
stream with other relevant data available to the public?

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apendleton
There's probably no technical barrier preventing it, but I can almost
guarantee that it would violate Facebook's terms of service. They're decidedly
unfriendly to bots.

~~~
rmc
And Data Protection issues in some places.

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ryporter
While I have a lot of respect for the SEC's increased crackdown on financial
wrongdoing such as insider trading, this really seems like a stretch.
Considering how quickly "internal" company memos are publicly disseminated, I
don't see how a Facebook post to 200K fans can be considered anything but
public.

~~~
pmorici
"While I have a lot of respect for the SEC's increased crackdown on financial
wrongdoing"

Really? I honestly find it hard to imagine how they could possibly do less in
terms of enforcement. There appears to have been _huge_ amounts of fraud going
on during both the bubble of the late 90's and the more recent crisis. The the
best the SEC has managed is to nab a few people for insider trading.

~~~
shawn-butler
Have they even investigated the selective disclosure that was widely reported
to have gone on during the facebook fiasco? Someone should have been charged
for that.

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pathy
It still hasn't been very long since Facebook's IPO, I expect investigations
like that take longer than a few months. Patience is virtue, especially when
dealing with cases like the Facebook IPO.

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chollida1
I think alot of people are missing the point here.

There are specified channels for disclosing "material" information.

These have been designed and vetted so that everyone at least has the chance
of getting the same information at the same time.

The SEC may be a bit dated but I think everyone agrees that you can't have
CEO's passing out information in private or non sanctioned forums that people
can trade on.

Otherwise everyone would have to watch Facebook feeds and twitter and Google+
and every blog in addition to the sanctioned channels.

I don't see any way in which the Netflix CEO didn't do the wrong thing here.

I do agree that the SEC has bigger fish to fry

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jason_slack
Can someone explain, simply, how this is a problem? I mean isn't '1 billion
hours' simply a statistic, a fact, a nice tidbit you might say?

Like Apple announcing how many iphones they have sold? Or how many apps have
been downloaded to date?

What do I misunderstand?

~~~
ComputerGuru
Yes. That's not the problem.

The problem is that the SEC cracks down hard on "insider information." The
point being, if in a private meeting with you, the CEO told you they did
something über cool and you used that to buy stocks, then you had info someone
outside the company didn't, and that is a violation of SEC rules.

The question here is whether or not posting on a facebook page is a "private"
matter. If they posted this in a PR release (or, recently, on their website)
for all to see, it would be one thing. But posting it on a facebook page where
by default only the subscribers to that page would see it, the SEC suspects it
is an unfair disclosure.

~~~
rmc
To expand: Imagine if the CEO of the company didn't use Facebook publically,
but only had friends, family etc. on there, maybe 200 people. And then posted
there first. That might count as an insider trading / private.

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creativityland
Quoting a comment from the article:

What an idiot! Insider information is only for the very rich and people in the
government!

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alanctgardner2
Is this the primary motivation for press-release services, to cover your ass
with the SEC by pushing publication off on a third party? Or do they offer
some other value I'm not aware of?

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imrehg
Given the recent issues with Facebook not showing your updates to all your
followers, but to merely a tiny fraction of them, I wonder how that would
affect these things.

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kapnobatairza
Interesting given Musk's tweet yesterday about Tesla being cash flow positive
for a week. Could we see SEC action there?

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acangiano
Get on with the times SEC.

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batgaijin
So that's what the SEC does...

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iamtherockstar
I heard a story on NPR recently about how the SEC is dramatically underfunded,
but I can't seem to find it now. If they're really that underfunded, I wonder
if this is someone trying to make their career by finding a new and cheap way
of bringing in revenue in fines.

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Alaskan005
_Maybe_ he violated the letter of the law but I don't see a comment where
everyone can read it, and broadcast to 200,000 people isn't public disclosure.

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dlhavema
Are there specific news outlets that the SEC considers as official press
release outlets? or is merely the act of releasing a press release? My point
is, what if they issued a press release in some Podunk town ( with say 1,000
people) instead of on facebook?

