By Melony Roy

PHILADELPHIA (CBS) – Chief executives are now allowed to tweet, post, or blog as long as they inform investors about their social media strategy first.

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In an attempt to regulate information in the digital age, the Securities and Exchange Commission has outlined new rules that clarify how public companies can use Facebook, Twitter and other social networks.

Assistant Professor at Wharton School, University of Pennsylvania Dr. Andrea Matwyshyn explains the SEC rules.

“So the principle behind regulation FD is that there has to be fair disclosure and that no particular market participant should have preferential access to information over any other participant.”

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This decision comes after an SEC investigation of Netflix CEO Reed Hastings’ personal Facebook post about Netflix monthly online viewing exceeding 1 billion hours for the 1st time.

“That investigation triggered an internal recognition by the SEC that perhaps there truly is lack of clarity in this space”

Matwyshyn also says technology gallops ahead of the law regularly and the SEC is just starting to catch up to some of these issues.

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