The Securities and Exchange Commission informed companies of some new rules related to social media practices. Business owners can release information with status updates, posts, tweets and blogs as long as they let investors know what they are doing. One case in question involved a status update that a chief executive posted on his personal account as he offered congratulations for a record-high volume of business.
The case carries implications for establishing a business in North Carolina and in the rest of the U.S. as companies must comply with requirements that all investors have full information related to financial aspects of the business at the same time. In the case in question, investors who did not follow him on social media did not have access to the same information in a timely fashion.
He countered the argument by stating that news sources and blogs had full access to the material and added that social media is an effective way of communicating. The S.E.C. has reassessed its position after looking into the matter for several months. They determined that businesses could use social media for communication. They must specify where the information will be found. Neither the CEO nor his company was fined for his status post.
The main concern was the fair access of all shareholders to information at the same time. Investors should be aware of the availability of updates on social media. With the use of social media in businesses, federal regulations should keep up with advances of technology. Business attorneys in North Carolina may help businesses understand appropriate social media use.
Source: The New York Times, “S.E.C. Sets Rules for Disclosures Using Social Media,” Michael J. De La Merced, April 2, 2013