Thursday, April 4, 2013

SEC says Companies Can use Personal Facebook Pages to share Information

The Security and Exchange Commission has announced that it is okay for publicly traded companies to share financial information on their personal Twitter or Facebook pages. This announcement comes after the CEO of Netflix, Reed Hasting's made a corporate announcement on his personal Facebook page last year stating that Netflix had streamed more than 1 billion hours of Internet video. After investigation the SEC concluded that companies must inform their investors on where to find said information as one would not usually think to look at a personal Facebook page for important information. Reed Hasting's however did not inform his investors, but because the rules were up in the air Netflix was not penalized by the SEC. Personal Facebook pages are usually on private settings that limit what certain people can and cannot see, so in order for companies to make an announcement on their personal pages they must make sure first their investors have access to view it.
This is a major milestone for social media which has become more and more recognizable as a legitimate source for sharing information. Social media has opened the door for small investors to obtain important company information as not all investors attend the big corporate meetings and events. 

Tuesday, April 2, 2013

Fourth Circuit Overturns Million Dollar Judgment Against Charleston CPA Defended by LWC

The Fourth Circuit overturned a judgment last week issued at the District Court level against a Charleston CPA defended by Lindsey W. Cooper Jr.  The judgment of more than $2.5million in Section 6700 tax shelter promoter civil penalties was imposed by a jury after the admission of evidence the Fourth Circuit determined was inflammatory and prejudicial. 

At trial, Judge David C. Norton overruled Cooper's strenuous objection to the admission of the CPA's delinquent personal tax filings into evidenceThe Fourth Circuit found that the government offered no evidence linking Robert Nagy's failure to timely file or pay his personal taxes with work he performed for Derivium regarding their 90% Stock Loan tax shelter program, concluding that the admission of evidence regarding Nagy's personal returns violated Federal Rule of Evidence 404(b).   

Rule 404(b) prohibits admission of evidence of wrongdoing solely for purposes of proving a person's character and the government's evidence regarding Nagy's personal returns served only to reflect his character negatively, resulting in prejudice.  It also explained that the evidence was quite likely to influence the jury against Nagy. 

The case was remanded to U.S. District Court for a new trial.  Check back with us for updates.