SEC Report Embraces Communications through Social Media

April 11, 2013

The Securities and Exchange Commission issued a report on April 2, 2013 concerning its investigation into the use of social media by public companies in the United States. The Report confirms that a public company may use social media channels to disseminate material, nonpublic information to the public and still comply with Regulation FD if the company first takes appropriate steps to alert investors, the market, and the media of the channels it expects to use. The format and conclusions of the Report track an interpretive release published by the SEC in August of 2008, which made clear that public companies can disseminate material, non-public information on their corporate websites and considered other means by which a company can distribute such information electronically without violating Regulation FD. The Report also follows a more recent SEC release, termed a Guidance Update, by the SEC’s Division of Investment Management. The Guidance Update addressed the use of social media by registered investment companies. The heightened interest in corporate communication through social media was confirmed yet again when, in response to the SEC’s Report, Bloomberg announced on April 7, 2013 that it would integrate real-time Twitter feeds into its platform for subscribers.

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