The SEC issued a report providing guidance for public companies on using social media to communicate with investors. The report clarifies that Regulation FD applies to social media communications and companies must ensure equal access to information for all investors. Companies should notify investors about which social media channels may be used for disclosures and update policies for social media use. The principles from prior SEC guidance on company websites also apply to social media channels used for disclosures.

1. April 4, 2013
SECURITIES LAW CLIENT ALERT
U.S. Securities and Exchange Commission Clears the
Norman B. Antin Way For Use of Social Media To Communicate with
[T] 202-457-6514
nantin@pattonboggs.com Investors
Jeffrey D. Haas
[T] 202-457-5675 On Tuesday, April 2, 2013, the U.S. Securities and Exchange
jhaas@pattonboggs.com Commission (SEC) issued a report of investigation (Report), which
clarifies that public companies can use social media outlets like
Kevin M. Houlihan Facebook and Twitter to announce key information in compliance with
[T] 202-457-6437
Regulation Fair Disclosure (Regulation FD) 1, provided that investors
khoulihan@pattonboggs.com
have previously been alerted about the social media outlet that will be
used to disseminate such information.
Joseph G. Passaic
[T] 202-457-6104
jpassaic@pattonboggs.com
The Report stemmed from an investigation conducted by the SEC’s
Division of Enforcement into a post made by the CEO of a public
Mark R. Goldschmidt company on his personal social media account to convey company
[T] 303-894-6132 information that was not otherwise made publicly available. Due to the
mgoldschmidt@pattonboggs.com increased use of social media and the uncertainty existing in the market
concerning how Regulation FD and the SEC’s prior Guidance on the Use
Jonathan Pavony of Company Web Sites (2008 Guidance) 2 apply to disclosures using
[T] 202-457-6196 social media channels, the SEC issued the Report to provide public
jpavony@pattonboggs.com companies with further guidance.
David Teeples There are two general principals stated in the Report that each public
[T] 214-758-3544 company should be aware of:
dteeples@pattonboggs.com
• First, issuer communications through social media channels
require careful Regulation FD analysis comparable to
communications that are made through more traditional
channels, such as SEC filings, press releases and corporate
websites; and
• Second, the principles outlined in the 2008 Guidance —
including the concept that the investing public should be made
aware of the channels of distribution a company intends to use to
disseminate material information — apply with equal force to
public company disclosures made through social media channels.
1 17 CFR 243.100-243.103
2 Commission Guidance on the Use of Company Web Sites, Release No. 34-
58288 (Aug. 7, 2008); http://www.sec.gov/rules/interp/2008/34-
58288.pdf
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2. Applicability of Regulation FD to Social Media
Compliance with Regulation FD requires companies to distribute material information in a manner reasonably designed to
disseminate that information to the general public broadly and non-exclusively. Regulation FD is intended to ensure that
all investors have the ability to gain access to material information at the same time. The Report confirms that Regulation
FD applies to social media and other emerging means of communication used by public companies in the same manner
and to the same extent that it applies to company websites and other more traditional means of communicating material
information.
The Report clarifies that public company communications made through social media channels could constitute selective
disclosures and, therefore, requires careful Regulation FD analysis to avoid one group of investors having access to
information prior to other investors. The Report identifies that disclosure of material, nonpublic information on the
personal social media site of an individual corporate officer — without advance notice to investors that the site may be
used for this purpose — is unlikely to qualify as an acceptable method of disclosure under the federal securities laws.
Personal social media sites of individuals employed by a public company would not ordinarily be assumed to be channels
through which the company would disclose material corporate information. Companies should adopt social media policies
which address, what if anything, is permissible conduct for corporate officers. 3
Applicability of the 2008 Guidance to Social Media
The 2008 Guidance was directed primarily at the use of company websites as a method for public companies to
disseminate information in compliance with Regulation FD. The 2008 Guidance explained that for purposes of complying
with Regulation FD, a company makes a public disclosure when it distributes information “through a recognized channel
of distribution.” The 2008 Guidance offered a non-exhaustive list of factors to be considered in evaluating whether a
company website constituted a “recognized channel of distribution,” including:
• whether and how the company lets investors and the markets know that the company has a website and that the
public should look at the company’s website for information,
• whether the company has made investors and the markets aware that it will post important information on its
website and whether the company has a pattern or practice of posting such information on its website,
• whether the information is prominently disclosed on the website in the location known and routinely used for such
disclosures, and whether the information is presented in a format readily accessible to the general public,
• whether the website is designed to lead investors and the market efficiently to information about the company,
• the extent to which information posted on the website is regularly picked up by the market and readily available
media, and reported in such media, or the extent to which the company has advised newswires or the media about
such information and the size and market following of the company involved,
• the steps it has taken to make its website and the information accessible,
• whether the company keeps its website current and accurate,
3We have issued two previous Client Alerts regarding social media considerations for financial institutions. See
http://www.pattonboggs.com/news/detail.aspx?news=1939 and
http://www.pattonboggs.com/news/detail.aspx?news=1997
Patton Boggs LLP | SEC Provides Guidance on Public Company Use of Social Media
4842-2745-3971.

3. • whether the company uses other methods in addition to its website posting to disseminate the information and
whether and to what extent those other methods are the predominant methods the company uses to disseminate
information, and
• the nature of the information.
Whether a company’s website is a recognized channel of distribution primarily depends on the company’s efforts to make
investors and the market aware that it intends to use the website to disclose material information. Some recommended
options for accomplishing this included:
• regularly disclosing in periodic reports, proxy statements and other shareholder communications and press
releases that information will be posted on the company website and that the company regularly uses its website
as a key source of company information,
• notifying newswires and the media that the company posts information on its website, and
• prominently displaying investor-related information on the website.
Similarly, the Report advises that companies intending to use specific social media channels as a method of corporate
disclosure should provide appropriate notice to investors and thoroughly examine the factors indicating whether a
particular channel is a “recognized channel of distribution” for communicating with their investors. The required notice
to investors can be accomplished by including disclosures on the company’s website identifying the specific social media
channels a company intends to use for the dissemination of material non-public information. This would give investors
and the markets the opportunity to take the steps necessary to be in a position to receive important disclosures —e.g.,
subscribing, joining, registering, or reviewing that particular channel. The SEC emphasized that the steps taken to alert
the market about the forms of communication a company intends to use for the dissemination of material, non-public
information, including the social media channels that may be used and the types of information that may be disclosed
through these channels, are critical to the fair and efficient disclosure of information.
Recommendations
Prior to using social media channels to disseminate material information to the markets, we recommend that a company:
• review its existing policies and procedures for communicating with investors and update those policies to
establish procedures for using social media, 4
• provide clear guidelines on the corporate and personal use of social media, which presumably will be embodied in
a social media policy, and
• authorize specific officers to communicate using social media on behalf of the company and specify the
circumstances when social media may be used, which also presumably will be embodied in a social media policy.
Once a company’s policies and procedures are in place, it should condition the market to its intention to disseminate
information through social media outlets by identifying the social media outlet or outlets the company intends to use
through press releases, filings with the SEC and its corporate website. Taking these steps prior to using social media will
allow the company to mitigate potential Regulation FD violations when utilizing social media as a channel for
disseminating material information.
The full text of the Report is available at: http://www.sec.gov/litigation/investreport/34-69279.pdf
4 See footnote 3.
Patton Boggs LLP | SEC Provides Guidance on Public Company Use of Social Media
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4. We are available to answer any questions that you may have on the Report and how your company can comply with the
guidelines set forth in the Report for using social media to communicate with investors.
This Client Alert provides only general information and should not be relied upon as legal advice. This Client Alert may
also be considered attorney advertising under court and bar rules in certain jurisdictions.
Patton Boggs LLP | SEC Provides Guidance on Public Company Use of Social Media
4842-2745-3971.