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Disclaimer Link Could Solve Compliance Dilemma for Public Companies Using Twitter

By Bruce Carton

Twitter is increasingly becoming a channel for public companies to communicate with investors but, as Dominic Jones of IR Web Report observes in this post, some of Twitter's inherent limitations create compliance challenges. As Jones notes, public companies' communications to the world are in many instances regulated by the SEC and subject to the federal securities laws. Some communications may require disclaimers or warnings that can't possibly fit within Twitter's 140-character limit, creating a conundrum for companies that want to communicate with investors via Twitter. Jones suggests that this problem could be resolved if Twitter would tweak its interface to allow for a disclaimer link in the metadata that accompanies each tweet on the Web and the API. He argues that the availability of such a link might encourage many more companies to begin using Twitter to help spread information about themselves, and could also be an easy way for Twitter to raise revenue by requiring these corporate accounts to be paid accounts. Presently, Jones writes, public companies on Twitter tend to use one of the following ineffective methods to add disclaimers to their tweets: 1. Twitter backgrounds: While companies can add disclaimer text to their Twitter account background images,...

Full post as published by Legal Blog Watch on February 26, 2010 (boomark / email).