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Netflix CEO Reed Hastings' Facebook Flap Forces SEC Into 21st Century

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The SEC will allow companies to announce news through social media, provided investors know to expect it, regulators said this afternoon.

The clarification updates existing wording, Regulation Fair Disclosure, that sanctioned corporate websites as an appropriate means to distribute information. The update will probably force links to corporate Facebook, Twitter and LinkedIn accounts to quickly appear prominently on investor-relations pages. Else businesses with tweet-happy executive could soon run afoul of regulators.

This all stems from when Netflix CEO Reed Hastings last JUly posted on his personal Facebook that, for the first time in company history, viewers had consumed 1 billion hours in a month. The SEC then sent a Wells Notice to Netflix--a signal a company is being investigated and could face charges--but since concluded it didn't need to punish Netflix. Hastings maintains the post wasn't a material disclosure. Worth noting: regulators didn't comment directly on whether it was or was not. SEC officials simply said social networks could be used.

While the SEC  seems intent on entering the 21st century, if at a belated pace, it still took the regulators about 20 minutes to tweet a press release about the regulatory update. So much for simultaneous disclosure.

Reach Abram Brown at abrown@forbes.com.