Is The SEC Investigating Netflix?

While Netflix has quite often been in the news these days, typically in connection with some spurious take out rumor or another, most likely spread by infamous flip flopping longs largely underwater on the name, there could be other, more sinister news lurking underneath the surface. As Disclosure Insight, an organization that among other activities submits FOIA requests to various regulators and compiles the data to expose companies that may have undisclosed regulatory proceedings against them, the SEC just may be investigating the fallen from grace and zero barrier of entry video steaming company (for which the imminent USPS bankruptcy will be merely the finally nail in the coffin).

From Disclosure Insight, which has gone "off paywall" after one week:

Whether or not you think Netflix is in play, those with an interest in the name will surely want to take note of this data point we published for clients on 5-Dec-2011.  It is based on data we acquired from the SEC under the Freedom of Information Act regarding Division of Enforcement investigative activity.

And the original note:

Does this imply a full blown investigation into Netflix' accounting practices is imminent? We don't know (although we certainly believe it would be warranted). It is merely yet another factual red flag for investors to keep track of as they pursue various imaginary rumors revolving around dreams of some acquisition that will almost certainly never come. After all why pax X today for a company that is cash flow negative when you can pay 50% of X in 6 months?