The Securities and Exchange Commission (SEC) clarifies in a recent report that companies may use social media outlets such as Facebook and Twitter to announce material information in compliance with Regulation FD (Fair Disclosure), so long as investors have been alerted as to which social media channel will be used to disseminate this information.
BACKGROUND
Regulation FD and Section 13(a) of the Securities Exchange Act of 1934 prohibit public companies, or persons acting on their behalf, from selectively disclosing material, nonpublic
information to certain securities professionals or shareholders when it is reasonably foreseeable that they will trade on that information, before it is made available to the general public. More…