SEC’s new social media policy falls short

FORTUNE — Netflix  CEO Reed Hastings got into some hot water with the SEC last year for revealing what may have been material company information via his Facebook page. At the time, I argued that the Wells Notice was warranted:

Investors in publicly-traded companies should not need to crawl all corners of the Internet to discover material information. Such data should be publicly-available in a central location, such as the investor relations page of a company’s website. Netflix has one, which includes all press releases, SEC filings, annual reports, quarterly analyst call transcripts, etc. And if Netflix wants to create a new section for “social media” disclosures, fine. But it should not allow Hastings to make a material disclosure via Facebook and then just assume that investors will know to look….

The SEC certainly should update Reg FD, in order to better accommodate the use of social media. But it should not simply shrug its shoulders at selective disclosure, just because the offender is using something hipper than a traditional press release.

It seems the SEC agrees with me on the problem, but not really on the solution.

Today the agency confirmed that social media tools like Facebook (FB) and Twitter can be used to comply with Reg FD, but only if investors first have been alerted as to which tools will be used to disseminate material information.

“One set of shareholders should not be able to get a jump on other shareholders just because the company is selectively disclosing important information,” explained acting SEC enforcement chief George Canellos, in a prepared statement.

Missing from the SEC’s announcement, however, is that central repository requirement. Or at least a recommendation (since actual rule changes can take years).

Yes, Netflix now would need to tell investors about Hastings’ personal Facebook account (assuming he still plans to use it for company disclosure purposes). But it also could just post a list of two dozen social media tools, and hope that investors happen to be checking the right one at the right time. Or that investors have created personalized alerts for all of them (likely requiring that they first create accounts).

In other words, close but no cigar. Yet.

As for Hastings, he’s off the hook. The SEC said it has chosen not to pursue an enforcement action against him or Netflix, due to “market uncertainty about the application of Regulation FD to social media.” Apparently, in this case, ignorance of the law is an affirmative defense.

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