The SEC issued a "Wells notice" to Netflix Inc. and its chief executive, Reed Hastings, taking issue with his decision to announce on Facebook that subscribers had viewed more than 1 billion hours of video in June.
The notice, issued Wednesday, indicates that the regulatory agency is weighing whether to bring a civil action against Netflix for the July disclosure. At issue is whether Hastings violated rules designed to ensure that investors have equal access to information.
The SEC's staff believes that such information should have been conveyed in a press release or regulatory filing, Hastings said.
"We think posting to over 200,000 people is very public -- especially since many of my subscribers are reporters and bloggers," Hastings wrote, in a response to the SEC that was filed with federal regulators and also posted on his Facebook page.
Hastings said Netflix never uses Facebook or other social media to convey information that would be valuable to investors.
"We think the fact of 1 billion hours of viewing in June was not 'material' to investors," Hastings wrote. "And we had blogged a few weeks before that we were serving nearly 1 billion hours per month."
An SEC spokesman could not be immediately reached for comment.
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