SEC Gives Guidance for Social Media Disclosures

Companies no longer have to wonder what is acceptable to disclose on social media sites. The SEC has set rules for how information may be disseminated on Facebook, Twitter, and other sites.

In the past, the SEC has been stringent on what companies can communication online. Because of Regulation Fair Disclosure (Reg FD), the SEC wanted to ensure that all investors have access to information at the same time, so that no one individual or group has an advantage in investing.

Now, the agency has softened its requirements. According to a New York Times article, companies can now post, with some restrictions: 

"...companies could treat social media as legitimate outlets for communication, much like corporate Web sites or the agency's own public filing system called Edgar. The catch is that corporations have to make clear which Twitter feeds or Facebook pages will serve as potential outlets for announcements."

In a statement, the agency summarized the new rule:

"The Securities and Exchange Commission today issued a report that makes clear that companies can use social media outlets like Facebook and Twitter to announce key information in compliance with Regulation Fair Disclosure (Regulation FD) so long as investors have been alerted about which social media will be used to disseminate such information."

In other words, investors need to know a company's social media strategy-where information will be posted.

By most standards, the rules are long overdue. Companies such as Netflix have been investigated by the SEC for posting information on Facebook. The clarification will help companies use multiple channels to reach multiple audiences.

Discussion Starters:

• Read the SEC's statement. What else do you learn from reading "between the lines"?
• What questions or potential difficulties remain for companies deciding what, when, where, and how to post?

Emails Reveal Legal Bill Padding

Lawyers should know better than to send joke emails they want to keep private. Emails among attorneys at DLA Piper, the world's biggest law firm, have become public in a lawsuit about overbilling.

The suit is a counterclaim by an energy executive who has $675,000 in unpaid bills with DLA Piper. In the suit, Adam H. Victor accuses DLA Piper of inflating billable time by performing unnecessary tasks and taking too long to complete them with too many staff.

The emails seem to confirm his claims. Here are two examples, captured by The New York Times. In the first, an attorney says that "random people" were working on the case "for whatever reason" to "churn that bill, baby!" 

 

In a second email, an attorney gloats about going $200,000 over the firm's estimate.

Read more emails.

Discussion Starters: 

• Describe what you perceive to be the working environment that supports these types of emails. In other words, what makes these acceptable-perhaps even encouraged?
• How do emails become public in such situations? Aren't they private-just sent to one or two people?

Twitter Turns 7

To celebrate its seventh birthday, Twitter produced a video to show its accomplishments and a few historic tweets.

Here are some stats about Twitter from 2012, of particular interest to business communicators: 

• 56% of customer tweets to companies are being ignored.
• 32% of all Internet users are using Twitter.
• 34% of marketers have generated leads using Twitter.

The average age on Twitter is 37.3, according to Pingdom, compared to 40.5 for Facebook. As Twitter declines in average age, Facebook has increased-about two years in the past two years for each.

Discussion Starters:

• How do you use Twitter, if at all? What value do you see for you personally?
• What would inspire you to communicate with company via Twitter rather than Facebook or an online form?

MIT Media Lab SXSW Faux Pas

As the rest of us watch the snow fall, participants in the SXSW interactive festival in Austin are enjoying the technology, music, and general coolness of the event.

Festival mainstay MIT Media Labs surprised people with its promotional wristbands that many considered sexist. The bands were given to people who attended an MIT party.

In a blog post, the organization published this apology:

"We appreciate all of the feedback we've received about the party we hosted at The Parish Underground on Saturday night at SXSW. While we received a lot of positive responses, we want to address an issue with the wristbands that were given to people who came in the door. They were offensive and in no way reflect the sentiments of the MIT Media Lab. These wristbands were provided by the venue, and while we didn't realize what was printed on them until after they'd been handed out, we should have prevented the situation from occurring in the first place.

"The Media Lab is firmly committed to supporting women in the sciences, computing, arts, and engineering. We don't like – and certainly don't want to support or disseminate – offensive messaging. We appreciate those of you who noticed the wristbands and pointed them out to us; please accept our sincere apology."

Image source.

Discussion Starters:

• What's your reaction to the wristbands: clever marketing, offensive, or something else? 
• What's the significance, if any, of MIT Media Labs distributing the wristbands at SXSW?
• How do you assess the organization's apology?

Fake Menu for Guy Fieri's Restaurant

Note to business owners: register all web domains similar to your company's name. Guy Fieri didn't, and a prankster created a fake menu on guysamericankitchenandbar.com. Fieri's restaurant is at the URL GuysAmerican.com, and the fake menu is a good visual imitation of the real one.

 Bryan Mytko had some fun with the idea and bragged about it on Twitter:

This is the second time Fieri is doing damage control in the past few months. The fake menu follows a scathing New York Times review of Fieri's restaurant.

Discussion Starters:

• What other domains should Guy Fieri have registered? At Easy Who Is, check a few more similar names to see who owns them. 
• Should Guy Fieri try to get the domain back? If the owner wants him to pay, what do you think would be an appropriate price?

Burger King's Twitter Feed Hacked

Burger King is the latest victim of Twitter hacking. With its page image turned into a McDonald's logo, the company suffered embarrassment for an hour before Twitter closed down the account.

 

Within this time, the hacker offended Burger King employees, promoted a musician, and claimed that the company had been sold to McDonald's. The first tweet was, "We just got sold to McDonalds! Look for McDonalds in a hood near you." Another tweet read, "We caught one of our employees in the bathroom doing this..." with a photo of someone shooting a syringe into his arm.

During the incident, @McDonald's tweeted, "We empathize with our @BurgerKing counterparts. Rest assured, we had nothing to do with the hacking."

Burger King shared this statement with Mashable:

 

When Burger King regained control of its Twitter feed, the writer acknowledged the thousands of new followers and tweeted, "Interesting day here at Burger King, but we're back! Welcome to our new followers. Hope you all stick around!"

Meanwhile, Twitter is under fire for so many recent hacks. In response, the site may institute two-factor authentication, which requires a user to respond to a text message before gaining access to the account from a mobile device. Facebook, Google, and Dropbox already have similar processes in place.

Discussion Starters:

• How do you think the hacking occurred? Where might Burger King have vulnerabilities in its Twitter feed or process?
• How do you assess Burger King's response? What, if anything, could the company have done differently?

S&P Emails and IMs Part of Government Suit

When will people learn that internal communications can go public? The federal government is suing Standard & Poor's for knowingly rating securities too highly, in effect, bolstering deals before the 2008 financial crisis. Internal emails and instant messages support this claim.

In one IM exchange, two analysts discuss a pending crash, and one admits that "we give in anyway."

In another exchange, one analyst IMs to another that "we rate every deal...it could be structured by cows." And in an email exchange, an analyst describes the pressure at S&P, and a client questions the built-in conflict of interest.

Although the video doesn't seem to be available online, analysts created a parody of the song, "Burning Down the House," by the Talking Heads.

What was apparently clear to some pockets of Wall Street took a while to hit Main Street, where the real damage was done. 

Discussion Starters:

• How else could these analysts have handled the pressure they were under?
• Why did these analysts feel comfortable communicating this way? Do you think S&P doesn't have a clear email policy? What else could be going on?

Applebee's Receipt Goes Public

Unhappy with not receiving a tip, an Applebee's server posted the signed check online-and got fired. The customer, Pastor Alois Bell, crossed out the 18% tip automatically added for large parties and wrote "0%" with the note, "I give God 10% why do you get 18?" The server, Chelsea, posted the receipt to the Atheism forum on Reddit.

Bell apparently left a $6 cash tip, but the server, Chelsea, was still offended by the note. When Bell learned that the receipt was posted online, she returned to Applebee's and demanded that everyone be fired. Later, she regreted her actions, calling them a lapse in judgement: "I've brought embarrassment to my church and ministry."

As expected, social media reactions are mixed, with many comments criticizing Applebee's decision to fire Chelsea. The company posted this response to its Facebook page: 

"We wish this situation hadn't happened. Our Guests' personal information-including their meal check-is private, and neither Applebee's nor its franchisees have a right to share this information publicly. We value our Guests' trust above all else. Our franchisee has apologized to the Guest and has taken disciplinary action with the Team Member for violating their Guest's right to privacy."

In addition, the CEO posted a statement on Applebee's website, including the excerpt from the policy:

"Employees must honor the privacy rights of APPLEBEE's and its employees by seeking permission before writing about or displaying internal APPLEBEE'S happenings that might be considered to be a breach of privacy and confidentiality. This shall include, but not be limited to, posting of photographs, video, or audio of APPLEBEE'S employees or its customers, suppliers, agents or competitors, without first obtaining written approval from the Vice President of Operations. . . . Employees who violate this policy will be subject to disciplinary action, up to and including termination of employment."

Image source.

Discussion Starters:

• What's your reaction to Chelsea's posting the receipt online? Was it her right, or did she misstep?
• Did Applebee's do the right thing by firing Chelsea? Why or why not? How do you assess the company's rationale-that posting the receipt was a violation of the guest's privacy?
• Read the CEO's statement. What do you consider his strongest and weakest arguments for terminating Chelsea?

Teacher May Be Fired for Posting Pics of Students

A teacher is under pressure for posting pictures of her students with duct tape across their mouths. What was intended as a funny moment within a class has become an issue for an Ohio school board.

When a middle-school student had trouble with her binder, 33-year-old teacher Melissa Cairns gave her some duct tape to hold it together. Instead, the student put the tape across her mouth. Getting a laugh from students encouraged others to do the same.

According to Cairns, the students asked her to talk a picture. She did. And posted it to Facebook with the caption, "Finally found a way to get them to be quiet!!!"

Another school employee reported her. Cairns removed the picture, as requested, but she is now suspended on unpaid leave, awaiting the school's decision. 

Discussion Starters:

• What about the teacher's perspective (in her video interview) makes sense to you? What doesn't?
• If you were the school principal, how would you handle the situation? 
• Imagine that you're a parent of one of the children whose picture was posted. What do you suppose your reaction might be?
• The CNET article refers to Cairns' "private" Facebook page. Is Facebook private?
• What could a school do to prevent this type of situation in the future?

More Teens and Young Adults Use Tumblr than Facebook

Is Facebook becoming passé?  Among 13-to-18-year-olds and 19-to-25-year-olds, Tumblr is the social media winner, according to one recent study. Although Facebook is still popular among these age groups, 55 % of teens and 52% of the young adults are on the site, compared to 61% and 57% on Tumblr.

One digital marketing consultant explains the difference this way:

"Facebook is where teens and young adults connect with family and some friends. Tumblr is where they connect with like-minded people about the topics they care about."

With its single-subject, short blog entries and animated GIFs, Tumblr appeals to the younger crowd. Facebook certainly is showing its age, with the average user now 40.5-not exactly the Harvard social seeker of its roots.

Survey researcher Gary Tan, 31, is concerned that he's already a "geezer":

"To be honest, it's a sobering notion that there's some piece of technology out there that you and your peer group doesn't use and doesn't understand. As far as I can tell, it might be a first for me and my geezer friends."

This survey is consistent with other reports that teens may not be as excited about Facebook as their older peers. A Los Angeles Times article in May 2012 reported that young people's "goal is to hook up with smaller circles of friends and share their thoughts and feelings away from the prying eyes of Mom and Dad." When parents are online, it's just not as much fun anymore.

Image source.

Discussion Starters:

• Does this latest survey match with your experience of social media sites? If you have younger brothers and sisters, do you find them interested in sites other than Facebook?
• What reaction do you have to the survey? Do you feel old and stodgy on Facebook?

Lance Armstrong's Doping Confession

After years of denying using performance-enhancing drugs, Lance Armstrong has finally admitted to doping. Although already under a lifetime ban of participating in Tour de France events and stripped of seven of his Tour de France titles and lucrative endorsements, the cyclist had held fast to his message: "I have never doped." He even sued some of his accusers.

But during an interview with Oprah Winfrey, Armstrong has finally come clean. The interview will air later this week with more details of the confession.

Things may get even worse for Armstrong. The federal government may join a whistleblower lawsuit to recoup money paid to Armstrong by the U.S. Postal Service to sponsor his cycling team. And if he officially admits drug use to the  World Anti-Doping Agency, he may face more lawsuits and fines.

Questions remain, for example, whether Armstrong will implicate others and what they may face.

Discussion Starters:

• Why did Armstrong choose to confess now? Why did he choose an interview with Oprah Winfrey to tell us the news?
• When the interview is aired, pay attention to Armstrong's word choices and language. Analyze his approach and delivery. What makes him credible now-or not?

Facebook's App Has Security Problems

For the new year, Facebook posted a "Midnight Message Delivery" app for people to send notes when the clock struck 12. It was a cute idea, but the app was easily hacked.

A computer science student first discovered the security flaw. Jack Jenkins found that changing the message ID brings users to different messages intended to be private. For example, this message has a confirmation number at the end that can be changed easily: http://www.facebookstories.com/midnightdelivery/confirmation?id=76188.

Being able to read private messages was one issue; another was the ability to delete messages that people believed would be received.

Facebook has since disabled the app.

Discussion Starters:

• How does such a security flaw affect Facebook's credibility? To what extent could this affect people's trust in future Facebook apps?
• In addition to disabling the app, should Facebook post a message about the flaw? If so, what should the company say? 

Hitler Humor Falls Short

As it turns out, Hitler jokes can offend people. French bank BNP used a parody of Hitler from the movie, "Downfall" as a motivational video for employees. Some employees didn't find it funny.

A bank employee created the video, which was originally shown last year at a seminar for 100 international managers in Amsterdam. Apparently, it was uploaded to the company's intranet site for more employees to view.

Similar parodies have been used many times and are popular on the web, such as this example of Hitler's reaction to the iPad. The bank's version shows Hitler as a Deutsche Bank executive angry that competitor BNP is succeeding in the foreign exchange market.

It's possible that employees didn't know the history of the clip. Still, some had strong negative reactions: 

"We could not believe the bank had actually dared to do that-make an analogy between our competitors and the Nazi regime. It took us a few minutes to take it in."

"We were shocked. Nobody knew how to react. Some  Jewish employees from the United States did not find it funny at all."

Discussion Starters:

• How would you describe the bank's original intent of using the parody?
• Why do you think the controversy became public now, rather than after the seminar in Amsterdam last year?
• What's your view of how some employees reacted?

Ten Jargon Words of 2012

PR Daily asked readers to report their top jargon words of the year.

The winners are:

• Game-changer
• At the end of the day (and its cousin, having said that)
• YOLO
• Epic
• Low-hanging fruit
• Value-add
• Impactful
• Utilize

Some of these are real hangers-on. We're not yet tired of "epic fail," for example? But others are newer-at least to me. YOLO suddenly seems more popular than Pinterest.

Image source: PR Daily.

Discussion Starters:

• What do these words mean? After you define each, try to find a substitute.
• What's the problem with overusing jargon? Is it a big deal at all?

Anheuser-Busch to Paramount: Remove Budweiser Logo from "Flight"

In the new movie, "Flight," Denzel Washington's character, a pilot, is drinking a Budweiser beer while he lands a plane. Anheuser-Busch doesn't like the publicity and has asked Paramount to omit its logo from digital and future versions of the film.

 

In a statement to the Associated Press, Rod McCarthy, vice president of Budweiser said, "We would never condone the misuse of our products, and have a long history of promoting responsible drinking and preventing drunk driving. We have asked the studio to obscure the Budweiser trademark in current digital copies of the movie and on all subsequent adaptations of the film, including DVD, On Demand, streaming and additional prints not yet distributed to theaters."

A distributor of Stoli vodka, another alcohol represented in the movie, also is unhappy with the depiction of the brand. A representative of William Grant & Sons told the Associated Press, "Considering the subject matter of this film, it is not something in which we would have participated."

These companies may be out of luck. As the Associated Press explains, courts have ruled that movies can use representations of brands without permission:

"Trademark laws 'don't exist to give companies the right to control and censor movies and TV shows that might happen to include real-world items,' said Daniel Nazer, a resident fellow at Stanford Law School's Fair Use Project. 'It is the case that often filmmakers get paid by companies to include their products. I think that's sort of led to a culture where they expect they'll have control. That's not a right the trademark law gives them.'"

Image source.

Discussion Starters:

• What's your view of how alcohol is depicted in the movie? Do these companies have a right to try to protect their brand in this way?
• How do you think Paramount decided to use these brands? Did the movie producers not think about the impact on brands, did they consider the consequences and ignore them, or something else?
• How could this type of situation be prevented in the future? What are the responsibilities of filmmakers and brands?

Criminal Charges for False Rumors About Hurricane

@ComfortablySmug may not be laughing since New York City Councilman Peter Vallone is pushing for criminal charges for spreading false information about Hurricane Sandy. Shashank Tripathi, who owns the Twitter handle, has since resigned as campaign manager for a congressional candidate. Tripathi also was a former assistant district attorney in Astoria, Queens.

Tripathi's tweets included false and accurate information, a mix that Vallone says is dangerous because it gives more legitimacy to the falsehoods.

Although Vallone admits this is a difficult case to prove, he's hoping it will deter similar behavior in the future. At a minimum, the criticism inspired Tripathi to issue this apology:

Tweets image source.

Discussion Starters:

• What's your view of Tripathi's tweets: harmless fun, potentially dangerous, or something else?
• Is the councilman taking the right approach in trying to press charges? What, if any, other consequences should Tripathi face?

Chase Emails Customers About Fees During Hurricane Sandy

Chase bank is communicating with customers about Hurricane Sandy. Before the storm hit land, the company emailed customers about plans to waive fees. It's an interesting email and shows the company's kinder side.

On its website, Chase repeats a version of the open paragraph and provides customers with information about open branches. The branch locator allows customers to search for branches and see the status of each.

As of this writing, neither Bank of America nor HSBC have similar messages on their websites.

Discussion Starter and Assignment Idea: 

• What is your reaction to Chase's email to customers?
• Go to the websites of other major banks. Do you find messages similar to that of Chase? How do they compare?

Apple's Ad Sounds More Like an Attack

Apple followed the court order to post the Samsung lawsuit ruling, but the company followed only the letter of the law. Information Week and other sources call the notification on Apple's website a mockery.

Apple sued Samsung for copying its iPad design too closely when creating its tablet, the Galaxy. But the company lost the patent infringement lawsuit and, as a result, was required to communicate the decision, according to  Information Week:

"The court gave Apple seven days to post notification of the ruling in a font of no less than 11 pixels, with a link to the ruling, that must remain on Apple's U.K website for six months or until the court orders otherwise. It also required Apple to publish the same notification in the first five pages of the Financial Times, the Daily Mail, The Guardian, Mobile Magazine, and T3 magazine, in a font of no less than 14 pixels."

In the notification, however, Apple takes several stabs at Samsung. Apple quotes the judge's ruling about the Apple design:

"It is an understated, smooth and simple product. It is a cool design."

"The informed user's overall impression of each of the Samsung Galaxy Tablets is the following. From the front they belong to the family which includes the Apple design; but the Samsung products are very thin, almost insubstantial members of that family with unusual details on the back. They do not have the same understated and extreme simplicity which is possessed by the Apple design. They are not as cool."

Apple posts a link to the ruling, as required, but then ends with another blow to its competitor:

"However, in a case tried in Germany regarding the same patent, the court found that Samsung engaged in unfair competition by copying the iPad design. A U.S. jury also found Samsung guilty of infringing on Apple's design and utility patents, awarding over one billion U.S. dollars in damages to Apple Inc. So while the U.K. court did not find Samsung guilty of infringement, other courts have recognized that in the course of creating its Galaxy tablet, Samsung willfully copied Apple's far more popular iPad."

Image source.

UPDATE: After being reprimanded by the UK court, Apple has replaced its notice with a revision.

Discussion Starters:

• Did Apple take the right approach for the company? Did the company do the right thing? What are the arguments for and against this approach?
  
• Should the judge have been even more specific in instructing Apple how to post the decision? Why or why not?

Another Premature News Report: Dow Chemical

For the second time in two weeks, bad news was inadvertently released ahead of schedule. Although Dow Chemical had planned to announce 2,400 employee layoffs and 20 plant closings on Thursday morning with its quarterly earnings statement, the news went out as a draft Tuesday night.

On Dow Chemical's earnings conference call, Doug May, VP of investor relations, explained the mishap in his introduction:

"Good morning, everyone, and welcome. Thank you for joining us on such short notice and being flexible with your schedules. As you know, we issued our earnings press release yesterday evening, October 23. This was earlier than usual due to an inadvertent and premature release of our restructuring announcement. Both the restructuring release and the earnings release went out on Business Wire and were posted on the Internet on dow.com."

In this case, the market reacted favorably to the restructuring. However, for Google, in a similar situation last week, the result wasn't nearly as positive.

Google's intent was to release its disappointing third-quarter results after the closing bell, but the draft statement slipped out on at 12:30 p.m. with the text "PENDING LARRY QUOTE." CEO Larry Page briefly said on the earnings call, "I'm sorry for the scramble earlier today."

Google blamed its finanial printer, RR Donnelly:

"Earlier this morning RR Donnelley, the financial printer, informed us that they had filed our draft 8K earnings statement without authorization. We have ceased trading on NASDAQ while we work to finalize the document. Once it's finalized we will release our earnings, resume trading on NASDAQ and hold our earnings call as normal at 1:30 PM PT."

Google shares lost about 9% before trading was halted.

Discussion Starters:

• Why is it important for companies to coordinate disappointing market news, such as layoffs and quarterly earnings?
• What controls should a company have in place to avoid this type of situation?

Wyclef Jean's Failed Haitian Charity

Haitian-American rapper Wyclef Jean's charity is now defunct, with questions of impropriety in its wake. A New York Times article, "In Haiti, Little Can Be Found of a Hip-Hop Artist's Charity," cites angry creditors wondering what happened to $16 million in donations and "trail of debts, unfinished projects, and broken promises."

According to the New York Times article, Jean was using funds for his personal benefit: 

"The forensic audit examined $3 million of the charity's 2005 to 2009 expenses and found $256,580 in illegitimate benefits to Mr. Jean and other Yéle board and staff members as well as improper or potentially improper transactions. These included $24,000 for Mr. Jean's chauffeur services and $30,763 for a private jet that transported Lindsay Lohan from New Jersey to a benefit in Chicago that raised only $66,000."

When accused of misdirecting funds, Jean said that he didn't need the money, offering as evidence, "I have a watch collection worth $500,000." This didn't quite endear people to his cause.

In his new book, "Purpose: An Immigrant's Story," Jean denies wrongdoing. Rather, he claims that he is the victim of "crucifixion."

A CEO letter that was posted on the charity's now-defunct website refers to "better accountability, more impact and greater financial transparency" and "a more disciplined Yéle Haiti." It's too late for that now. 

Image source.

Discussion Starters:

•  Read the CEO letter. Which parts are the most and least convincing?
•  Read the New York Times article. Which side of the story do you believe?