It's time to clarify what constitutes insider trading in the age of Twitter: SEC commissioner

  • Federal regulators need to provide more information around insider trading rules and social media, SEC commissioner Robert Jackson says.
  • "If you're wondering whether it might be time for us to clarify this, I am, too," says Jackson.
  • There's been debate on whether Twitter and other platforms allow information to be disseminated widely enough to be in the public domain.

Federal regulators need to provide more information around insider trading rules as they pertain to company news posted on social media platforms, SEC commissioner Robert Jackson said on CNBC on Wednesday.

"If you're wondering whether it might be time for us to clarify this, I am, too," Jackson said in a "Squawk Box" interview. "We have issued some guidance in the area, but it's quite old."

The Securities and Exchange Commission defines illegal insider trading as buying or selling a stock based on "material, nonpublic information."

With many corporations and CEOs releasing company information on Twitter, there's been debate on Wall Street and Washington whether the platform allows information to be disseminated widely enough to be in the public domain.

"Squawk Box" co-host Joe Kernen asked Jackson where the SEC comes down.

"If all of you, who are running this show, aren't sure about the law of insider trading, then the markets don't know the law clearly enough. That's not good for people that might be informed and in a position ready to trade. That's not good for investors who we are trying to protect," said Jackson, one of four SEC commissioners.

Jackson said the entire SEC, including Chairman Jay Clayton, is concerned about making sure investors have a level playing field when it comes to the use of Twitter.

"I can't prejudge any matters, but I'm sure we'll be focusing on questions around how to best define insider trading, especially when it comes to the use of social media," Jackson said.