Thanks Cardio! Nice little quote in there, and made it into PRINT too:
Hoax Won't Deter Tweeting Companies to Push On With Social-Media Disclosure; Banks Expanding Access
By JESSICA HOLZER and GREG BENSINGER April 25, 2013, 2:06 a.m. ET
WASHINGTON—Tuesday's short-lived hoax on Twitter Inc. won't deter companies from disseminating market-moving information using social-media sites.
Meanwhile, Wall Street firms are plowing ahead with plans that could give some employees access to these sites at work.
After a fraudulent Associated Press tweet claiming that two explosions at the White House had injured President Barack Obama, the Dow Jones Industrial Average dropped 145 points in an instant. The market quickly recovered.
A Securities and Exchange Commissioner calls for an investigation into the Twitter hoax, IBM reshuffles hardware executives after disappointing earnings report, and the Boston suspects planned to party after the attacks. (Photo: Getty Images)
Securities and Exchange Commission member Luis Aguilar on Wednesday called on his agency to look into the Twitter hoax and said the SEC hadn't yet determined who carried it out or why. "Where it appears that the securities markets have been manipulated in violation of the federal securities laws, the SEC should undertake a serious inquiry," Mr. Aguilar said.
An SEC spokesman said: "We have standard operating procedures whenever there are market developments, and this is no exception. These procedures start with getting the facts about what occurred. We do not limit ourselves to looking at the catalyst for an event, but also its repercussions, to determine whether any further inquiries or actions are warranted." More
Regulators Examine Trading After Twitter Hoax In the Wired World, Feeds Drive Trading High-Speed Traders Pulled Back, Not Out, After Fake Tweet
In addition, Commodity Futures Trading Commission member Bart Chilton said CFTC officials are looking into the trading. The selloff "raises larger questions about how technology is used" in the market, Mr. Chilton said. "Somebody lost money, and not everybody who got out got back in."
Allowing broader employee access to social media on Wall Street could remove a roadblock that companies say discourages them from using social media as an exclusive channel for major announcements. Companies want to communicate directly with their investor bases but are concerned that tweets and posts won't reach a vital constituency: Wall Street stock analysts and institutional investors.
"Most of our investors are still using traditional channels to get their information," Zillow Inc. Z -2.43% Chief Executive Spencer Rascoff said in an interview. He said Zillow, an online real-estate company, won't use social media exclusively but as an accompaniment to other traditional means of disseminating corporate news—partly because of the restrictions on bank employees. "The idea is to spread the word to the broadest group possible," Mr. Rascoff said.
Zillow said Wednesday it would begin disclosing earnings and possibly other material information via Twitter and Facebook Inc., FB +0.48% following the lead of Netflix Inc., NFLX -0.17% which this month said it may use Facebook or Twitter to occasionally disclose material information. Zillow also plans to take some questions from social-media sites when it releases its first-quarter results in early May.
The Twitter hoax won't affect the company's disclosure plans or those of companies like Dell Inc. DELL +0.38% and Exxon Mobil Corp., XOM -0.88% which have indicated they will use social media to communicate corporate news, according to company officials.
AutoNation, AN +2.02% Inc., which runs car dealerships, said it has no plans to alter its decision to have CEO Mike Jackson disclose material information on his Facebook page and Twitter. "We've already taken steps to safeguard against hacking," a spokesman said, noting email poses similar security issues.
Infrax Systems Inc., IFXY 0.00% a utilities firm, said it wouldn't change its plans to disclose potentially material information via Twitter or Facebook. "Cyber terrorism is going to happen no matter what, there's nothing you can do about it," said CEO Sam Talari.
Banks say they consider sites like Twitter an increasingly important news source and expect them to become essential outlets given the SEC's recent blessing of social media as a way for companies to disclose market-moving information.
If anything, the Twitter crash has reinforced the view at some banks that employees need access to social media so they can see and judge information for themselves.
"It has not changed our plans. All aspects of any tool we use are carefully evaluated prior to implementation," a Bank of America BAC +1.30% spokeswoman said.
Bank of America plans to loosen restrictions that currently bar most of their employees from accessing Facebook and other sites. Morgan Stanley, MS +0.47% Citigroup Inc., C +1.01% and Goldman Sachs Group Inc. GS +1.05% also are considering relaxing prohibitions to give more employees access to social media.
Most Wall Street banks restrict access to social media—as well as Gmail and other private sites—largely because of SEC rules requiring securities firms to store all communications, including tweets and posts. Some employees may view public-company Twitter feeds through Bloomberg terminals. The erroneous AP tweet was integrated into the Bloomberg feed, a Bloomberg spokeswoman said.
The SEC's social-media guidance has prompted Morgan Stanley to consider allowing access to sites "within a controlled environment" a spokeswoman said. The bank freed up its brokerage sales force to use LinkedIn and Twitter on a limited basis last year.
Citigroup is looking at granting stock analysts limited access to social-media sites so they can follow companies, a bank official said. Goldman Sachs is exploring ways to give employees greater access to social media, a spokeswoman said. —Scott Patterson contributed to this article
Write to Jessica Holzer at jessica.holzer@dowjones.com and Greg Bensinger at greg.bensinger@wsj.com A version of this article appeared April 25, 2013, on page C1 in the U.S. edition of The Wall Street Journal, with the headline: Hoax Won't Deter Tweeting.
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