August 23, 2019

Archives for April 26, 2013

SEC Issues Report on Social Media Disclosures


By Trevor A. Crow

The Securities and Exchange Commission (SEC) recently issued a report of its investigation relating to a Facebook post by Reed Hastings, the CEO of Netflix, which stated Netflix’s monthly online viewing had exceeded 1 billion hours. The SEC’s investigation was to determine whether Hastings or the Company violated Regulation FD under the Securities Exchange Act through the posting of this information.

In general, Regulation FD prohibits public companies, or persons acting on their behalf, from selectively disclosing material, nonpublic information to certain securities professionals, or shareholders, where it is reasonably foreseeable that they will trade on that information, before it is made available to the general public. Here, the SEC decided not to initiate an enforcement action against Netflix or Hastings. However, the report also offers guidance to public companies on the application of Regulation FD to disclosures made through social media.

The report explains that, under certain circumstances, public companies may disseminate material, nonpublic information through social media without violating Regulation FD if investors previously have been notified that specific social media will be used to spread such information. The report states that the framework set forth in theSEC’s August 2008 Guidance on the Use of Company Websites should be used when analyzing communications made through social media. Specifically, “the central focus of this inquiry is whether the company has made investors, the market, and the media aware of the channels of distribution it expects to use, so these parties know where to look for disclosures of material information about the company or what they need to do to be in a position to receive this information.”

The report also explained that without prior notice to investors, it is unlikely that a corporate officer’s personal social media site used to disseminate corporate information would qualify as a method “reasonably designed to provide broad, non-exclusionary distribution of the information to the public” as required under Regulation FD. In the Netflix inquiry, Hastings’ Facebook page had never been previously used to announce company metrics, yet the SEC still chose not to initiate an enforcement action against Netflix or Hastings.

Bottom Line: Public companies should have social media policies in place for their directors and executive officers to educate them about Regulation FD. Before a representative of the company posts any material and nonpublic information on a social media platform, the company should take steps to ensure that investors, the market, and the media are aware of this channel of distribution.

Trevor A. Crow is an associate in Dufford & Brown’s corporate transactions group. He focuses on public company securities compliance, M&A, entity formation, and startup company financing. He has counseled clients on a variety of business issues including entity selection, formation, finance, acquisitions, and numerous operating transactions. Trevor’s LLM in taxation makes him uniquely qualified to handle complex issues regarding business transactions and tax planning.

Trevor received his J.D. and LL.M. in Taxation from the University of Denver’s Sturm College of Law.  He is a member of the American, Colorado, and Denver bar associations; an executive member of the Colorado Bar Association Tax Section; he belongs to the Denver Metro Chamber Impact Denver Class of 2012; and he is a member of the Colorado Association of Business Intermediaries (CABI). He writes for the CBA Business Law Section newsletter, where this article originally appeared.

The opinions and views expressed by Featured Bloggers on CBA-CLE Legal Connection do not necessarily represent the opinions and views of the Colorado Bar Association, the Denver Bar Association, or CBA-CLE, and should not be construed as such.

Colorado Court of Appeals: Announcement Sheet, 4/25/13

On Thursday, April 25, 2013, the Colorado Court of Appeals issued 10 published and 35 unpublished opinions.

People v. Osorio-Bahena

People v. Madden

People v. Lahr

People v. Nelson

People v. Tyme

Tarco, Inc. v. Conifer Metropolitan District

Rodgers v. Board of County Commissioners of Summit County

Coats v. Dish Network, L.L.C.

Dunlap v. Colorado Department of Corrections

In re the Estate of Hossack (Robinson v. Hossack)

The summaries for these cases are forthcoming, courtesy of The Colorado Lawyer.

Neither State Judicial nor the Colorado Bar Association provides case summaries for unpublished appellate opinions. The case announcement sheet is available here.

State Judicial Revises Fee Payment Request Form, Guide to Determining Indigency, and Forms to Discontinue Sex Offender Registration

The Colorado State Judicial Branch issued updates to six of their Judicial Department Forms (JDF). These updates include changes to the Guide to Determining Indigency, the Request and Authorization for Payment of Fees, a Notice to Subpoena Recipients, and forms to discontinue sex offender registration for non-Colorado convictions.


  • JDF 80.1  – Notice to Subpoena Recipients (04/13)
  • JDF 207 – Colorado Judicial Department Request and Authorization for Payment of Fees (04/13)
  • Guide – Guide for Determining Indigency (CJD 98-01) (R04/13)


  • JDF 473 – Petition to Discontinue Sex Offender Registration – Non-Colorado Conviction or Juvenile Adjudication or Disposition (R03/13)
  • JDF 474 – Notice of Hearing on Petition – Non-Colorado Conviction or Juvenile Adjudication or Disposition (R03/13)
  • JDF 475 – Order to Discontinue Sex Offender Registration – Non-Colorado Conviction or Juvenile Adjudication or Disposition (R03/13)

All of State Judicial’s JDF forms are available on their website. Click here for the Forms page.

Tenth Circuit: Man Who Confessed to Aiding al-Quada in 9/11 Attacks Not Entitled to Good Conduct Time for When He Was Held as Enemy Combatant

The Tenth Circuit published its opinion in Al-Marri v. Davis on Wednesday, April 24, 2013.

On December 12, 2001, the FBI arrested Ali Saleh Kahlah al-Marri as a material witness to the September 11, 2001 terrorist attacks against the United States.

President George W. Bush later declared Mr. al-Marri to be an enemy combatant. He was transferred to a Naval Brig where he was detained for almost six years. Mr. al-Marri was eventually transferred to civilian custody, where a federal grand jury indicted him on two counts of providing material support or resources to a designated foreign terrorist organization (al-Qaeda). On April 30, 2009, Mr. al-Marri pled guilty to one count of providing material support or resources to a designated foreign terrorist organization.

Prior to sentencing, the Bureau of Prisons (BOP) indicated that under 18 U.S.C. § 3585(b), it would only grant prior custody credit for the time Mr. al-Marri spent in pretrial criminal detention after he was transferred to civilian custody. BOP was unwilling to credit Mr. al-Marri for the 71 months he was held as a material witness and an enemy combatant.

Taking into account the BOP’s indication that it would deny Mr. al-Marri credit for the 71 months, the sentencing court reduced the period of confinement (180 months) by 71 months to reflect the periods of time for which he would not be credited by the BOP. The court further reduced the sentence by nine months to reflect the severe conditions at the Naval Brig.

After sentencing, pursuant to 18 U.S.C. § 3624(b)(1), the BOP credited Mr. al-Marri for both periods spent in pretrial criminal detention (totaling 745 days), but refused to grant prior custody credit for the 71 months during which he was held as an enemy combatant.

Mr. al-Marri filed a § 2241 petition in the district court seeking a statutory calculation of GCT for the 71 months he was detained or, in the alternative, a calculation as an equitable remedy for his allegedly unconstitutional detention. The district court denied the petition. Mr. al-Marri appealed.

On appeal, Mr. al-Marri contended he was entitled to Good Conduct Time (GCT) for the 71 months he was held as an enemy combatant, either statutorily under 18 U.S.C. § 3624(b), or as an equitable remedy.

Statutory Entitlement to Good Time Credit

This argument is foreclosed by the Supreme Court’s decision in United States v. Wilson, 503 U.S. 329 (1992). Wilson held that a sentencing court does not have authority to grant prior custody credit under § 3585. Instead, that authority is vested with the Attorney General, acting through the BOP.

Mr. al-Marri was detained because the President declared him to be an enemy combatant; he was not detained for an alleged violation of the federal criminal code. Similarly, Mr. al-Marri was held as a material witness—not as punishment for providing material support to a terrorist organization. The purpose of his detention was preventative rather than punitive. In short, the Court reasoned, Mr. al-Marri’s 71-month detention as an enemy combatant did not constitute “prior custody” as required by § 3585(b), and he was therefore ineligible for Good Conduct Time.

Next, Mr. al-Marri argued that if the 71-month sentencing reduction did not constitute “prior custody” under § 3585(b), the period should still be awarded because it is ‘time served’ and therefore part of the ‘term of imprisonment’ within the meaning of the GCT. The Tenth Circuit held that the Bureau of Prison’s calculation of Good Conduct Time for Mr. al-Marri comported with the most natural reading of the statute—that it applies only to time served under the actual sentence. The Court therefore deferred to the BOP’s interpretation.

Good Time Credit as an Equitable Remedy

The Tenth Circuit held the district court did not abuse its discretion in declining to reconsider Mr. al-Marri’s argument that the BOP’s refusal to calculate GCT for his unlawful detention entitled him to equitable relief.


Tenth Circuit: Unpublished Opinions, 4/24/13

On Wednesday, April 24, 2013, the Tenth Circuit Court of Appeals issued one published opinion and three unpublished opinions.

Siribuor v. UHS of Denver

Palmerin v. Johnson County, Kansas Board of County Commissioners

Newman v. T.K. Cozza-Rhodes

No case summaries are provided for unpublished opinions. However, published opinions are summarized and provided by Legal Connection.

SB 13-272: Including Renewable Energy Technologies in Measures that May be Used in a Gas Utility’s Demand-side Management Program

On Monday, April 15, 2013, Sen. Gail Schwartz introduced SB 13-272 – Concerning Modifications to Energy Demand-side Management Programs, and, in Connection Therewith, Creating a Pathway for Inclusion of Innovative and Emerging Technologies to Offset the Consumption of Natural Gas. This summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

Current law rewards the use of renewable energy resources for generating electricity and encourages efficiency measures that reduce demand for both electricity and thermal energy generated from fossil fuels. But current law does not comprehensively encourage the production of thermal energy from renewable sources when offsetting fossil fuels used for heating and cooling. The bill addresses this disparity by adding renewable energy technologies to the measures that may be deployed under existing law as part of a gas utility’s demand-side management (DSM) program. In addition, the bill:

  • Requires investor-owned retail natural gas utilities to devote 30% of their DSM budgets to support the installation of renewable energy technologies that cannot be net metered;
  • Caps gas utility DSM program expenditures at 4% of total full-service retail sales;
  • Directs investor-owned retail natural gas utilities to submit, and the public utilities commission (PUC) to consider, proposals to include their most cost-effective and consistently marketable DSM products and services in their rate base, thus freeing up a portion of their existing DSM budgets for emerging technologies; and
  • Urges the PUC, in any proceeding concerning DSM programs of electric utilities, to draw on the information and experience gained in connection with gas DSM programs as modified by the bill to promote emerging technologies that offset electricity consumption.

The bill was introduced on April 15 and assigned to the Agriculture, Natural Resources, & Energy Committee. On April 18 the committee took testimony. The bill is back on the calendar for April 23 at 7:30 a.m.

Since this summary, the bill was postponed indefinitely by the Agriculture, Natural Resources, & Energy Committee.

SB 13-267: Permitting Judicial Review of a Final Action Regarding Land Use Regardless of Whether an Application for Reconsideration has been Filed with the Local Government

On Friday, April 12, 2013, Sen. Jessie Ulibarri introduced SB 13-267 – Concerning Judicial Review of Land Use Determinations by Local Governments. This summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

Upon any final action of a county, home rule or statutory city, town, territorial charter city, or city and county (local government) that has the effect of approving or denying, in whole or in part, the use or development of a particular parcel of real property, the bill makes the final action subject to judicial review, whether or not an application for reconsideration of the final action has been filed, unless the filing of an application for reconsideration is required to obtain judicial review under the land development regulations of the local government.

The bill authorizes any person adversely affected or aggrieved by final action by a local government concerning the use or development of a particular parcel of real property, and who was a party to or participated in the proceedings resulting in the final action, to commence an action for judicial review of the final action in the district court in which the real property is located within 30 days after the action becomes final. The bill specifies the parties against whom the action may be brought.

The bill specifies the required components of a complaint requesting judicial review, and additional procedures governing service of the complaint, certification of the record, and a schedule for briefing the matter before the district court.

Judicial review under the bill is limited to a determination of whether the local government or an officer of the local government has exceeded its jurisdiction or abused its discretion, based on the evidence in the record before the defendant local government or officer.

The bill requires the district court to determine the matter within 63 days of the plaintiff’s reply brief, or, if no briefs are filed, within 63 days of the filing of the defendant’s answer. If the district court has not decided the matter by the applicable deadline, the final action of the local government that is under review is deemed affirmed and valid without any further action by the district court, for all purposes including authorization to seek appellate review of the district court’s order. The decision of the district court is subject to appellate review as permitted by existing appellate rules.

The bill was introduced on April 12 and assigned to the Local Government Committee. The bill is scheduled for committee review on April 23 at 2 p.m.

Since this summary, the bill was postponed indefinitely by the Local Government Committee.