SEC Guidance On Social Media And Websites For Company Announcements And Communications- Part I

On April 2, 2013, the Securities Exchange Commission (“SEC”) issued a report confirming that companies can use social media, such as Facebook and Twitter, to make company announcements in compliance with Regulation Fair Disclosure (Regulation FD) as long as investors are alerted as to which social media outlet is being used by the company.  The report was issued following an investigation into a Facebook posting made by Reed Hastings, CEO of Netflix.  In the report the SEC stated that previously published guidance on the use of Company websites was applicable to the use of social media.  Accordingly, a review of the SEC guidance on the use of company websites is in order.

Background

Regulation FD requires that companies take steps to ensure that material information is disclosed to the general public in a fair and fully accessible manner such that the public as a whole has simultaneous access to the information.  Regulation FD is designed to ensure that

Structuring The Private Placement Or Venture Investment- Pre-Deal Considerations

I recently blogged about how to determine valuation in a start-up or development stage entity for purposes of structuring a prepackaged private placement, or for negotiating the venture capital transaction. I followed that blog with one explaining the various types of financial instruments that can be used for an investment.

Before a company can package a private placement offering or effectively negotiate with a venture or angel investor, it has to have its proverbial house in order. This blog circles back to the beginning discussing pre-deal considerations.

General

In order to successfully attract quality investors, a company must have its financial and legal house in order. I always advise my clients to act as if they are public, even if they never intend to go public. What is meant by that is to maintain proper corporate books and records. Draft and sign minutes of meetings of the board of directors, officers or committees. Keep systems in place to make

MARY JO WHITE HAS BEEN SWORN IN AS THE NEW CHAIR OF THE SEC

On April 10, 2013 Mary Jo White was sworn in as chair of the Securities and Exchange Commission (SEC).  Ms. White was nominated by President Obama on February 7, 2008 and was confirmed by the U.S. Senate on April 8, 2013.

Chairman White is the first former prosecutor to lead the SEC.  Chairman White served as the U.S. Attorney for the Southern District of New York from 1993 to 2002 where she specialized in prosecuting complex securities and financial institution frauds and international terrorism cases.  She is the only woman to ever have held that position.

As set forth on the SEC website, ” Prior to becoming the U.S. Attorney for the Southern District of New York, Chairman White served as the First Assistant U.S. Attorney and later Acting U.S. Attorney for the Eastern District of New York from 1990 to 1993. She previously served as an Assistant U.S. Attorney for the Southern District of New York from 1978

SEC Clears Social Media As An Acceptable Form For Company Announcements

On April 2, 2013, the Securities Exchange Commission (“SEC”) issued a report confirming that companies can use social media, such as Facebook and Twitter, to make company announcements in compliance with Regulation Fair Disclosure (Regulation FD) as long as investors are alerted as to which social media outlet is being used by the company.  The report was issued following an investigation into a Facebook posting made by Reed Hastings, CEO of Netflix.  The SEC declined to pursue an enforcement action against Mr. Hastings.

Regulation FD requires that companies take steps to ensure that material information is disclosed to the general public in a fair and fully accessible manner such that the public as a whole has simultaneous access to the information.  Regulation FD is designed to ensure that all investors are on an even playing field in terms of access to material information.  Regulation FD ended the era of invitation-only conference calls between company management and a select group