Can you get in trouble with the law — or at least a government agency’s unlimited regulatory power — for peacefully telling the truth?
You can, despite the protections articulated in the First Amendment and the greater respect sometimes accorded to freedom of speech than to other constitutionally protected rights.
It is possible because when they assault speech, government officials claim to be opposed not to the right to speak freely but to something else. They say they’re combating lung cancer, the influence of money on politics, or the unequal distribution of information to investors.
This summer, Reed Hastings of Netflix committed the sin of boasting on Facebook that monthly viewing of Nexvids “exceeded one billion hours for the first time ever in June.” Sounds innocent enough.
Come December, though, and the Securities and Exchange Commission has threatened to bring civil charges against Netflix for allegedly violating “public disclosure rules.” SEC Regulation FD requires public companies to make “full and fair disclosure” of “material” information that is not already public.
The SEC still thinks that 244,000 Facebook subscribers don’t fully and fairly constitute the public, but the communication cannot by any reasonable, modern construal be a case of offering “insider information.” How much more “outside” from the back rooms of a corporation can you get than Facebook?
The absurdity, here, lies in the SEC’s rules and its interpretations of those rules — and in the blind, confused, bankrupt way bureaucracies, which don’t go bust as the companies they oversee can, enforce their rules.
That is why Bernie Madoff slipped through the SEC’s fingers for years, while Netflix finds itself in hot water for a Facebook posting.
This is Common Sense. I’m Paul Jacob.
3 replies on “Unfree Financial Speech”
Good, except Madoff didn’t slip. A whistleblower turned him in half a dozen times. Madoff was studiously ignored.
Drik,
You are partly wrong about Madoff.
MADOFF WAS
A VERY LARGE CONTRIBUTOR TO THE DEMOCRATIC PARTY AND POLITICANS IN NY & NJ. ( caps for emphasis).
The politicos who got his (?) money inclued Chuck Schmer (D-NY), Hillary Clinton ( when running for Senate in NY); former governor of NJ–forgot his name–same one who was a VP at Goldman Sachs, and ran a commodity firm that took some $500 million of CUSTOMER SEGREGATED FUNDS to meet margin calls on firm postions– and had another few hundred million wired to London ( The same man who is being investigated by a former partner at Goldman, Sachs while he was a partner).
And, DO NOT FORGET, Madoff’s niece ‘ dated’ the SEC investigator, then married him ( and he quit the SEC and took a high paying job at Madoff’s firm).
the greed ( and stupidity) of many of his clients also played a part, (Some of the ‘professionals”) thought that madoff was screwing (no nicer term) other clients by running ahead of their orders, and giving them the profits.
You know, I should have assumed that. It’s to the point where, anytime that something is not working well in this country that is not due to a force of nature, it is usually safe to assume tht at it is due to the involvement of a politician,a nd more often than not a lib-prog. The French have an aphorism, “Cherchez la femme” referring to their assessment that when mischief was about ttat it was more often than not due to the instigations of a clever or corrupting woman. For the United States, we should be using “Cherchez la politique”. Appropriately, this substituted word is always feminine in French even when referring to a male.