The Influence of the SEC

In the last couple years, companies have started to recognize the great potential and opportunities social media can offer to reaching shareholders, investors, and financial analysts. In a 2008 decision, the Securities Exchange Commission (SEC) acknowledged social media, specifically corporate blogs, as a legitimate form of financial disclosure to a company’s constituents.

According to page 109 of SocialCorp: Social Media Goes Corporate by Joel Postman, the SEC decision to allow public companies to release financial information through social media outlets helps eliminate the time and money burdens of standard SEC financial reporting.

In a PR 2.0 post, Brian Solis discusses the SEC and its influence on how companies disseminate information to their stakeholders, particularly investor relations (IR) professionals. Solis points out the importance of remembering that despite the SEC recognizing social media as a valid source of disclosure, there still are limits and restrictions for sharing information. The SEC reiterates that companies still must follow current federal securities laws. Rather than jumping at the chance to reveal any or all financial information to stakeholders, IR has surprisingly remained on the sidelines, carefully waiting and observing potential opportunities and risks.

With regulations and principles from the SEC in mind, there are numerous corporations that have utilized social media for reaching shareholders and communicating financial information. I will highlight a few of these companies and use them as examples for how they chose to apply social media to IR development in upcoming posts.

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4 responses to “The Influence of the SEC

  • Chelsea Brooks

    I agree that social media would be an important way to stay in touch and converse with a company’s shareholders and investors. It also makes sense to me that the SEC would be slightly skeptical because there are some sensitive matters regarding investing and finances. Social media should definitely not be the only outlet to contact investors, shareholders, and financial analysts.

  • Michelle Ackerman

    Hannah,

    Since social media is still growing, I can see why investor relations is choosing to stay on the sidelines when disclosing information to stakeholders. Social media has become a great outlet for information sharing. I am curious to see what companies have been doing this in your future posts.

  • Laura Pond

    I’m glad that you are discussing the SEC in your posts, because I honestly have no idea what it’s about, but now I am learning! According to the Postman text, it seems that in allowing public companies to share financial information through social media sites can increase the transparency factor for a company or organization.

    I had never really thought about Investor Relations, but it is also important to keep a company’s investors in mind when using social media tools for communication.

    This topic seems quite complicated, but I am enjoying your research findings so far. I’m anxious to see what companies you highlight in your future posts.

  • Sarah Bruton

    You bring up great points about financial analysis’s being hesitant in using social media. I think they don’t see how facebook and twitter could apply to them and it does for PR. If companies look at more of their competitors they will be able to see the benefits of joining social media.

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