Digitally savvy corporations can finally stop worrying that their last Tweet or Facebook post might have inadvertently disclosed material information to investors. The Securities and Exchange Commission recently issued a new “Guidance Update” that provides welcome direction on when and how social media may be used by publicly traded companies while remaining in compliance with federal regulations.
The SEC has long been concerned with timely disclosure of company information to the public. In 2000, the agency promulgated Regulation FD in an effort to prevent earnings and other important information from trickling out to investors and the public at large. Through the use of the SEC’s online filing system, EDGAR, and the processes set forth in Reg FD, timely notification could be made. The problem? Reg FD does not address the digital world we now live in.