Netflix Inc. and CEO face civil claim
The Chief Executive Officer of Netflix, Reed Hastings and the company, Netflix Inc face a potential civil claim from the Securities and Exchange Commission.
According to several reports, SEC staff are alleging that both Netflix and its CEO may have violated fair disclosure rules after posting on Facebook a statement that Netflix had exceeded 1 billion hours of video streaming.
In a WSJ report, SEC could issue a “Cease-and-desist” proceeding against them for the disclosure. When the statements were made, Netflix shares jumped 6.2% back in July. This was a public disclosure of material information that could become an issue for the strict SEC rules about such announcements made by public companies.
The regulation Fair disclosure, or Regulation FD was initiated by the SEC back in 2000. It stipulates that publicly traded companies have to disclose material information to all investors at the same time.