The SEC Will Possibly Sue Netflix For Announcing Record Viewership On Facebook

Senior Contributor
12.07.12 5 Comments

Here’s a question for you. Does the following paragraph merit a lawsuit by a government authority?

“Congrats to Ted Sarandos, and his amazing content licensing team. Netflix monthly viewing exceeded 1 billion hours for the first time ever in June. When House of Cards and Arrested Development debut, we’ll blow these records away. Keep going, Ted, we need even more!”

If you answered “no”, consider applying to the Securities and Exchange Commission (SEC). They apparently could use someone with a little common sense.

The SEC is angry at Netflix and CEO Reed Hastings for sharing the above paragraph on Hastings’ personal Facebook instead of burying it in some quarterly report or filing it in a report with the SEC first. You know, because this kind of pointless marketing fluff is the hard-nosed, serious data that the SEC needs to prevent financial fraud. Not actual financial data or anything. Who needs that? Madoff who?

The warped thing is that the rules the SEC are considering suing under are designed to prevent institutional investors from having access to information individual investors don’t. So posting it on Facebook to 200,000 people, many of them media professionals, is somehow hiding that from individual investors. Somehow. We’re not sure how either.

Netflix, for its part, believes that this will be quickly wrapped up and the SEC will move on to things that might actually be useful. At least we hope.

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