(CNN Money) — Netflix CEO Reed Hastings is under investigation by the Securities and Exchange Commission for posting information about the company on his Facebook page.
In a Facebook posting on July 5, Hastings said that Netflix customers were viewing more than 1 billion hours of video content a month. Information that the company was approaching 1 billion hours had appeared on the company's blog the month before. But in neither case did the company issue a formal press release or make a separate filing with the SEC disclosing the billion hour statistic.
The posting was widely reported and Netflix stock rose 13% the day of the posting.
On Thursday, Netflix disclosed in a new posting, an SEC filing and a news release that Hastings and the company received a Wells Notice from the SEC. The notice says the agency staff will recommend regulators institute a cease-and-desist proceeding and/or bring a civil injunctive action for violations of the agency's fair disclosure rules.
Hastings said he's hopeful that the matter can be cleared up quickly through the SEC's review process.
"We think posting to over 200,000 people is very public, especially because many of my subscribers are reporters and bloggers," he said. Hastings currently has 245,000 Facebook subscribers on his account.
Companies are required to make public information that is considered "material" to shareholders. Typically, companies will do that by filing that information to the SEC, but businesses are also allowed to bypass the SEC by posting information on their websites or by issuing a press release.
Though social networks could be considered public, there is no hard and fast rule about Facebook posts. That could soon change with this notice.
"The SEC might be using this as a way to determine how it will handle social media in the future," said Steven Thel, professor of securities law at Fordham University and former SEC attorney. "When the SEC wrote its financial disclosures rules, it wasn't thinking about Facebook or Twitter."