Netflix: SEC seeks legal action over Facebook post
NEW YORK Netflix (NFLX) says it is facing scrutiny from regulators over a Facebook (FB) post made in July by CEO Reed Hastings.
The company disclosed Thursday that the Securities and Exchange Commission sent notices to Netflix and Hastings regarding the July 3 public post on Hastings' account. The SEC sent "Wells Notices," giving Netflix and Hastings a chance to argue why the agency should not take action against them.
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Hastings said in a regulatory filing that the SEC staff seeks to "bring a civil action" against the company over what the CEO refers to as a "fascinating social media story."
On July 3 Hastings wrote on Facebook that monthly viewing on Netflix had exceeded 1 billion hours in June. The SEC says that is material investor information that must be disclosed in a regulatory filing or press release. The company says the information isn't material because it had already disclosed that subscribers were viewing about a billion hours of content per month.
Shares of the Los Gatos, Calif., company jumped 13.4 percent on July 5.
Hastings responded to the notices with a post on Facebook that was also filed with the SEC, calling it a "fascinating social media story."
Netflix shares rose $2.80, or 3.4 percent, to $86.17 on Thursday after the company announced a multi-year licensing deal with Disney (DIS) . The stock fell $1.39 to $84.78 in after-hours trading.