So you thought Facebook Inc (NASDAQ:FB) was just for the youngins? Not according to the Securities and Exchange Commission. Read about this and the other stories influencing financial stocks today.
1. It’s time to Facebook friend your stocks
In a ruling issued yesterday, the Securities and Exchange Commission (click here for the ruling itself) held that companies can use social media sites such as Facebook Inc (NASDAQ:FB) and Twitter to disseminate material nonpublic information to investors so long as the companies have told investors which outlets they use. The issue came up last July after Reed Hastings, the chairman and chief executive officer of Netflix, Inc. (NASDAQ:NFLX), posted on Facebook Inc (NASDAQ:FB) that the company had streamed more than one billion hours in the previous month for the first time in its history. Here’s Hastings’ original post:
Congrats to Ted Sarados, and his amazing content licensing team. Netflix, Inc. (NASDAQ:NFLX) monthly viewing exceeded 1 billion hours for the first time ever in June. When House of Cards and Arrested Development debut, we’ll blow these records away. Keep going, Ted, we need even more!
2. Bank of America Corp (NYSE:BAC)‘s ongoing battle with MBIA Inc. (NYSE:MBI)
The legal death match between Bank of America Corp (NYSE:BAC) and mortgage bond insurer MBIA Inc. (NYSE:MBI) completed another round yesterday after an appeals court ruled in the latter’s favor on a number of critical issues. The principal question before the court was whether Bank of America Corp (NYSE:BAC) is only obligated to repurchase mortgages that have already gone into default. According to the court, the answer is no: “Plaintiff is entitled to a finding that the loan need not be in default to trigger defendants’ obligation to repurchase it. There is simply nothing in the contractual language which limits defendants’ repurchase obligations in such a manner.”
The court also upheld the lower court’s ruling that MBIA need not demonstrate a “direct causal link” between alleged misrepresentations by Countrywide Financial (which Bank of America Corp (NYSE:BAC) purchased in 2008) and the degradation in value of mortgage-backed securities insured by MBIA. The implications of this ruling are wide-ranging. To read more about this, check out Reuters’ Allison Frankel’s take on it here.
3. Bank of America concludes settlement with the NCUA
In slightly better news for Bank of America Corp (NYSE:BAC), the National Credit Union Administration announced yesterday that it will drop legal claims against the bank in exchange for a $165 million payment. Not unlike MBIA, the NCUA had alleged that the bank “downplayed risks of poor-quality mortgages packaged into securities” that were then sold to credit unions around the country. As I discussed here, this marks a “small but important victory” for the bank in its efforts to atone for the sins of Countrywide. To learn more about Bank of America Corp (NYSE:BAC)‘s progress on the legal front, check out this in-depth series that we published in February.