Netflix and Chief Executive Officer Reed Hastings were told by the Securities and Exchange Commission staff that they may face a civil claim over statements about use of the service he made on Facebook.
The staff alleges Netflix and its CEO violated Regulation Fair Disclosure by making selective disclosure of material information, according to a company filing yesterday.
Hastings said that in the filing the SEC is questioning a July 1 Facebook posting in which he said customers had watched more than 1 billion hours of videos on Netflix in June. He had previously posted on his company blog that monthly viewing was approaching 1 billion hours.
“We think the fact of 1 billion hours of viewing in June was not ‘material’ to investors, and we had blogged a few weeks before that we were serving nearly 1 billion hours per month,” Hastings said in yesterday’s filing. “We remain optimistic this can be cleared up quickly through the SEC’s review process.”
Netflix fell 1.6 percent, to $84.81, in extended trading, after rising 3.4 percent, to $86.17, in New York. They’re up 24 percent this year.