Netflix and its CEO facing civil action from Wall Street following Facebook post revealing the company's viewing figures
Netflix and its chief executive, Reed Hastings, are facing civil action from Wall Street after using Facebook to publish the website’s viewing figures.
Hastings and Netflix have been given notice about potential action following the July Facebook post which the regulator says broke rules that prohibit selective disclosure of company information.
Uploaded on 3 July the post detailed that Netflix members had clocked up more than 1 billion viewing hours in June, which was then seen by the 200,000-plus subscribers to Hastings’ Facebook page.
However, Netflix had not issued a press release or lodged a regulatory filing with the Securities and Exchange Commission (SEC) to comply with the Regulation Fair Disclosure rule.
This rule requires that firms announce important information to all investors at the same time to ensure a fair market in the shares.
The same day as the Facebook post, Netflix shares jumped from under $70 a share to above $80.
Hastings has said this share price jump was already in motion before his post, thanks to "a positive Citigroup research report the evening before."