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Re: loworange post# 1483

Friday, 11/10/2017 11:42:16 AM

Friday, November 10, 2017 11:42:16 AM

Post# of 3739
Regulation FD Applies to Disclosures of Material, Nonpublic Information on Social Networking Sites

The SEC explained in its release that issuers may use popular social networking sites, such as Facebook and Twitter, to disclose material, nonpublic information, but such disclosures must comply with Regulation FD. Regulation FD provides that when an issuer, or a person acting on its behalf, discloses material, nonpublic information to certain enumerated persons, such as shareholders and securities market professionals, where it is reasonably foreseeable that they will purchase or sell the issuer’s securities on the basis of the information, it must distribute that information in a manner reasonably designed to provide broad and non-exclusionary distribution to the public. When the disclosure of material, nonpublic information is intentional, it must be distributed to the public simultaneously, and when such disclosure is inadvertent, it must be distributed to the public promptly afterwards. The SEC does not require the use of a particular method for public disclosure, but it must be done through a recognized channel of distribution, such as an issuer web site, press release or Form 8-K filing.

The SEC explained that “the rule makes clear that public disclosure of material, nonpublic information must be made in a manner that conforms with Regulation FD whenever such information is disclosed to any group that includes one or more enumerated persons.” The SEC further emphasized that “if an issuer makes a disclosure to an enumerated person, including to a broader group of recipients through a social media channel, the issuer must consider whether that disclosure implicates Regulation FD.” This analysis would include determining:

whether the disclosure includes material, nonpublic information; and
if it does, and the issuer chooses not to file a Form 8-K, whether the information was disseminated in a manner reasonably designed to provide broad, non-exclusionary distribution of the information to the public.