Five questions answered on Netflix's Facebook "violation"

Digested.

Netflix Inc’s chief executive Reed Hastings is in trouble with the US Securities and Exchange Commission (SEC) because of something he posted on Facebook. We answer five questions on his controversial post.

What did Hastings say?

On 3 July Hastings announced on a public Netflicks Facebook page accessible to 244,000 subscribers that one billion hours of video was being viewed a month by members of the video streaming website. 

He said exactly: "Netflix monthly viewing exceeded 1 billion hours for the first time ever in June."

So, what’s the problem with this post exactly?

The way the information was disclosed is the problem. The SEC believes that this particular figure is material information and therefore should have been disclosed in a press release or regulatory filing.

SEC's Regulation FD, adopted in 2000, requires public companies to make full and fair public disclosure of material non-public information.

What kind of action is the SEC taking?

The "Wells notice," as it is known as, that was received by Netflicks and filed by the company as regulations dictate, states that the SEC is planning on bringing civil action against the company because of the post made by Hastings.

The SEC staff will recommend the full commission pursue either a cease-and-desist action and/ or civil injunction against Netflix and Hastings.

What has Hasting said about his contentious Facebook posting?

According to The Telegraph, Hasting said yesterday that his posting was public enough: "First, we think posting to over 200,000 people is very public, especially because many of my subscribers are reporters and bloggers," 

In a letter posted alongside the regulatory filing he added "We remain optimistic this can be cleared up quickly through the SEC's review process." 

What are other people saying?

Wedbush Securities analyst Michael Pachter told Reuters: "It's totally disingenuous to say that his statement wasn't material when the stock went from under $70 a share to more than $80 and the only data point was that post."

While, Joseph Grundfest, former SEC commissioner and Stanford Law School professor also told Reuters: "The evolution of social media presents the SEC with some very interesting regulatory challenges. But if they're worried about social media, there are ways for them to address that without threatening to sue Reed Hastings. They should have a rulemaking where they can ventilate these issues. "

Netflix is in trouble. Photograph: Getty Images

Heidi Vella is a features writer for Nridigital.com

#Match4Lara
Show Hide image

#Match4Lara: Lara has found her match, but the search for mixed-race donors isn't over

A UK blood cancer charity has seen an "unprecedented spike" in donors from mixed race and ethnic minority backgrounds since the campaign started. 

Lara Casalotti, the 24-year-old known round the world for her family's race to find her a stem cell donor, has found her match. As long as all goes ahead as planned, she will undergo a transplant in March.

Casalotti was diagnosed with acute myeloid leukaemia in December, and doctors predicted that she would need a stem cell transplant by April. As I wrote a few weeks ago, her Thai-Italian heritage was a stumbling block, both thanks to biology (successful donors tend to fit your racial profile), and the fact that mixed-race people only make up around 3 per cent of international stem cell registries. The number of non-mixed minorities is also relatively low. 

That's why Casalotti's family launched a high profile campaign in the US, Thailand, Italy and the US to encourage more people - especially those from mixed or minority backgrounds - to register. It worked: the family estimates that upwards of 20,000 people have signed up through the campaign in less than a month.

Anthony Nolan, the blood cancer charity, also reported an "unprecedented spike" of donors from black, Asian, ethcnic minority or mixed race backgrounds. At certain points in the campaign over half of those signing up were from these groups, the highest proportion ever seen by the charity. 

Interestingly, it's not particularly likely that the campaign found Casalotti her match. Patient confidentiality regulations protect the nationality and identity of the donor, but Emily Rosselli from Anthony Nolan tells me that most patients don't find their donors through individual campaigns: 

 It’s usually unlikely that an individual finds their own match through their own campaign purely because there are tens of thousands of tissue types out there and hundreds of people around the world joining donor registers every day (which currently stand at 26 million).

Though we can't know for sure, it's more likely that Casalotti's campaign will help scores of people from these backgrounds in future, as it has (and may continue to) increased donations from much-needed groups. To that end, the Match4Lara campaign is continuing: the family has said that drives and events over the next few weeks will go ahead. 

You can sign up to the registry in your country via the Match4Lara website here.

Barbara Speed is a technology and digital culture writer at the New Statesman and a staff writer at CityMetric.