Social Media And Reporting Issuers

In our recent blog post discussing the publication of the Canadian Securities Administrators' latest continuous disclosure compliance review, available here, we noted that the regulators remain concerned with some reporting issuers' use of social media, particularly as a medium to disclose material information. On August 7, at 9:48 AM, Elon Musk, the Chair and CEO of Tesla, Inc., tweeted: "Am considering taking Tesla private at $420. Funding Secured." Tesla is not a reporting issuer in Canada and is not directly subject to provincial securities laws relating to the communication of material information.¹ Nonetheless, the tweet serves as an interesting illustration of the risks of using social media to communicate with investors in Canada, and directors and executives of Canadian public companies should be aware of those risks.