SEC mulls hitting Netflix with suit over news shared on Facebook

Sharing news on Facebook may have landed Netflix in hot water with U.S. regulators. The Securities and Exchange Commission yesterday gave Netflix and its chief executive, Reed Hastings, a “Wells Notice”regarding how Reed disclosed some information about the company. What that essentially means is that the SEC may take some sort of civil legal action against Netflix because of something Hastings posted on his Facebook wall about a new video-streaming milestone. The SEC believes Netflix should have made a more formal announcement instead of simply notifying visitors to Hastings’ Facebook profile. A Regulation Fair Disclosure, which the SEC cites in its notice to Netflix, is meant to ensure that individual investors have the same access to information as large institutional investors by banning selective disclosure of material information.