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SEC embraces the use of social media for public companies to broadcast material nonpublic information

As advocates for social media, Hearsay Social is pleased with the recent Securities Exchange Commission Release noting that publicly held companies may release material non-public information on social media platforms in compliance with Regulation Fair Disclosure (Reg FD) provided that certain steps are taken prior to such disclosure:
(i) advance notice of the type of disclosures that will be made
(ii) the specific social media platforms that will be used (including the channel’s address would be a good practice) so that the public has an opportunity to use such channels to obtain the information
The SEC stance is in line with the reality of state of communications today. Majority of shareholders are using social media today to access real-time financial information, as such, why wouldn’t they also learn about material information of their investments on such forums? Provided that companies and their executives follow their internal communication rules/policy, provide their investors advance notice and a chance to subscribe to or join the right company social media platforms, then shareholders should be able to obtain material non-public information on these forums.
With use of a platform such as Hearsay Social, Companies can now publish pre-approved corporate communications to the public across all social media platforms with the ability to monitor and retain such communication.

Disclaimer: The material available on this blog is for informational purposes only and not for the purpose of providing legal advice. We make no guarantees on the accuracy of the information provided herein.