Social Media and Regulation FD

Given the role that social media is playing in our lives now, would a tweet or a message posted on LinkedIn or Facebook qualify as “public disclosure” under Regulation FD? 

Regulation FD states that dissemination of information through a method (or combination of methods) of disclosure that is “reasonably designed to provide broad, non-exclusionary distribution of the information to the public” would qualify as public disclosure of previously conveyed material nonpublic information regarding the company.

To follow the SEC’s logic described in its 2008 interpretative release regarding the use of company web sites, it seems that company tweets or LinkedIn/Facebook disclosure would qualify as broad and non-exclusionary distribution of information only if: (i) a company’s presence on these social media web sites is viewed as a recognized channel of distribution for information about the company, its business, financial condition and operations, and (ii) disclosure of information through social media tools disseminates the information in a manner making it available to the securities marketplace in general.  It remains to be seen whether social media web sites will become an appropriate FD disclosure vehicle.   

 

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