Social Media Disclosures – Save Your Mulligans for Golf

Author: Elsa Abruzzo

What can happen when a CEO reveals public financial information in a tweet without the appropriate disclosures?  “Going Past Transparency to Overexposure” examined a Twitter-erroneous or, some thought at the time, a Twitter-felonious moment when CEO Jason Goldberg publicly tweeted that he was “rais­ing some more angel invest­ment now. $25k—$100k/​investor, up to $500k”…while allegedly bypassing SEC disclosure rules.

While this event happened a few years old, it is relevant to us in drug and device companies today for a few reasons:

  • TechCrunch, a leading website for the IT world, picked up and alleged misconduct within minutes of the original tweet.
  • Subsequent deletion of the tweet in a viral Web 2.0 world was ineffective.  This is like asking the jury to disregard a statement they just heard.  Just because it is in admissible, how much influence will the comment still impart on an impressionable jury?  Two years after the CEO deleted the tweet, I was able to read blogs ab out it, including the one at TechCrunch where a screenshot of the tweet was embedded as a blog header.
  • Mr. Goldberg likely tweeted this with the best intentions, however his response to his deletion: “wasn’t worth the TechCrunch headache”, would have benefited from some PR polish.

The only pearl of wisdom I can give you is to for the time being treat social media promotions as you would standard fare promotions but with the added elements of speed and permanence. This mirrors approaches from other industries.

As a quick refresher, in social media, you need to have SOP(s) governing who, what, where and how, including:

1.    Who is approved to “speak” on the company’s behalf in social media outlets?

2.    What they are allowed to say and what the boundaries and applicable rules?

3.    Where they are approved to spread the good word?

4.    How are they are approved in advance or what training is in place for approved “speakers”?

5.    How are they monitored along the way to quickly uncover inappropriate announcements and respond? This includes having the equivalent of CAPA in place for the inevitable social media “uh-ohs”.

As always, be ready for the standard consequences if you go beyond your SOP-established boundaries.

It is hard enough to interpret how FDA will behave in areas for which much guidance and policy exists.  We are still patiently (impatiently?) waiting for our Social Media Promotion guidance.  How many social media mulligans will FDA allow us?  What fines or sanctions will FDA dole out even after retraction or correction?  Will FDA be watching how the SEC handles such matters and follow suit?

Most importantly, what do you think?

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Related Articles:

Corporate Blogs and ‘Tweets’ Must Keep SEC in Mind (WSJ)

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