Jeremy Barr is a Counsel and Katherine Kim and Yunah Ko are Associates at Freshfields Bruckhaus Deringer LLP. This post is based on a Freshfields memorandum by Mr. Barr, Ms. Kim, Ms. Ko, and Ginger Hervey.
A recent enforcement action brought by the Securities and Exchange Commission (“SEC”) offers an important reminder for public companies, as well as their officers, directors and employees, to use caution if disclosing sensitive information about the public company via social media. On September 26, 2024, the SEC announced settlement of an enforcement action against a sports betting and online gaming company for selectively disclosing material non-public information (“MNPI”) through the social media accounts of the company’s CEO, in violation of Regulation Fair Disclosure (“Regulation FD”).
On July 27, 2023, content was uploaded to the CEO’s social media accounts disclosing that the company continued to see “really strong growth” in states where it was already operating. At the time of the posts, the company had not yet publicly disclosed this information. These posts were removed shortly after publication at the request of the company. However, the company did not itself disclose the information included in the social media posts until seven days later when it published its earnings release for Q2 2023.
