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Category Archives: Social Media

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Who wants more reasons to focus on data security

Posted in Books and Records, Broker-Dealer Regulation, Collateral Consequences, Compliance and Supervision, Cyber-Security, Federal and State Criminal Activities, Financial Industry Trends, FINRA Compliance, Investment Adviser Regulation, Investment Company Regulation, Registered Representatives, SEC Compliance, SEC Enforcement, Social Media

The SEC recently issued an investor bulletin regarding one of our favorite topics; data security of customer accounts. The primary areas of the SEC’s focus were: Have a strong password, keep it secure and change it often. Use a two-step verification process if the firm offers it. Use different passwords for different on-line accounts. Avoid… Continue Reading

Twitter: More than just Social Media

Posted in Financial Industry Trends, Social Media

Since Al Gore invented the internet, we have had an unprecedented amount of information and data right at our fingertips.  However, given the immeasurable quantity of this information, it has always been a challenge to quickly and efficiently gather intel and perform research on the internet, especially in the context of a securities practice.  While… Continue Reading

You just suffered a cyberattack, now what

Posted in Cyber-Security, Financial Industry Trends, FINRA Compliance, Registered Representatives, Securities Fraud, Social Media

A recent Investment News article highlighted the pervasive problem associated with cyberattacks and offered some guidance in the event of an attack. Before visiting that guidance, understand how pervasive these attacks are. The SEC recently conducted a sweep on cyberattacks. This sweep revealed that 88% of broker-dealers and 74% of advisors have experienced some form… Continue Reading

So How Is Your Cybersecurity

Posted in Books and Records, Cyber-Security, Federal and State Criminal Activities, Financial Industry Trends, FINRA Compliance, FINRA Enforcement, SEC Compliance, SEC Enforcement, Social Media

The SEC and FINRA have continued to designate cybersecurity as an exam priority.  Both the SEC and FINRA have also recently published the findings of their exam sweeps.  As reported by the Investment News, the results of those sweeps when it comes to cybersecurity are telling. The sweeps show that firms, much like with compliance,… Continue Reading

Look Before You Tweet

Posted in Compliance and Supervision, Conflicts of Interest, FINRA Compliance, FINRA Enforcement, Registered Representatives, Social Media

FINRA recently sanction a registered representative for tweets made some time ago.  The offending tweets referenced a stock that he did not disclose that he owned and were otherwise biased and not backed up by facts.  The registered representative was fined $15,000 and given a ten day suspension.  In the larger scheme of things, a… Continue Reading

Personal Email For Firm Business – Don’t Do That

Posted in Books and Records, Broker-Dealer Regulation, FINRA Compliance, FINRA Enforcement, Social Media

As firm clients demand more and more access to their registered representatives, member firms must do more to make sure that their brokers do not run afoul of the firm communication written supervisory procedures.  One firm recently failed that test, resulting in a FINRA fine and censure.  In that matter, FINRA found that the member… Continue Reading

I Tweet, You Tweet, We All Tweet

Posted in Broker-Dealer Regulation, Compliance and Supervision, Financial Industry Trends, FINRA Compliance, SEC Compliance, SEC Enforcement, Social Media

The SEC recently issued two interpretations that address your use of interactive social media, like Twitter, in accordance with the securities laws.   These interpretations permit your firm to now use a hyperlink to satisfy the legend requirements and, at the same time, limit your responsibility where your communications are retransmitted, like a retweet.  The major… Continue Reading

Is Social Media Allowed for Public Announcements?

Posted in Social Media

The SEC announced that it will not pursue an enforcement action against a company CEO for violating Regulation FD when he announced on his personal Facebook page certain information.  The SEC noted that neither the CEO nor the company had previously used the Facebook page to announce company information or had they informed shareholders that… Continue Reading

FINRA Requests Data on Member Firms’ Social Media Use

Posted in FINRA Compliance, SEC Compliance, Social Media

The Financial Industry Regulatory Authority announced that it sent targeted examination letters asking broker-dealer members about their social media use.  See http://www.finra.org/Industry/Regulation/Guidance/TargetedExaminationLetters/P282569. In the letter, FINRA warned that each member firm’s written and electronic communications are subject to periodic spot checks.  Among other questions, FINRA asked the member firms to explain their use of social… Continue Reading


Posted in Cyber-Security, Social Media

This is another area where we consistently blog because it is a constant issue.  The SEC is now reviewing public companies’ disclosure relating to cyber security risks to determine if additional guidance is needed in this area. In 2011, the SEC Division of Corporation Finance advised firms to disclose compromises regarding their data security. Since… Continue Reading

What Does FINRA Rule 3270 Mean To You

Posted in Broker-Dealer Regulation, Compliance and Supervision, FINRA Compliance, FINRA Enforcement, Money Laundering, Ponzi Schemes, Registered Representatives, Social Media

The outside business activities of registered persons have the potential for causing your firm significant liability, especially where those activities are unknown to the firm, involve firm customers and constitute a fraud.  FINRA 3270 only requires the registered person to provide notice to the firm before engaging in the activity, but should the firm do more.… Continue Reading

Do You Want To Know What Keeps The Regulator Up At Night

Posted in Broker-Dealer Regulation, Compliance and Supervision, Financial Industry Trends, FINRA Compliance, FINRA Enforcement, Investment Adviser Regulation, SEC Compliance, SEC Enforcement, Social Media

At a regulator’s round table during a recent National Society of Compliance Professionals meeting, the regulators framed out those issues that are keeping them up at night.  The issues include: The increasing complexity of investment products. Social media beyond things like Twitter or LinkedIn. Cyber security. Cyber fraud; i.e. hacking into customer accounts. AML issues… Continue Reading

So What Do You Need To Do With BrokerCheck

Posted in Broker-Dealer Regulation, Dodd-Frank, Financial Industry Trends, FINRA Compliance, Social Media

While many brokers breathed a sigh of relief when FINRA withdrew its proposal requiring members to include a “prominent description of and link to” BrokerCheck on their web sites and social media pages, this is probably not the end of this matter. Many firms complained about the proposal because it presented many administrative nightmares; such… Continue Reading

What You Need To Know About Disclosures Through Social Media

Posted in SEC Compliance, SEC Enforcement, Social Media

In recognition of the pervasive use of social media, the SEC recently issued guidance that public companies could disseminate material information through social media without violating Regulation FD.  The question remains what is the best way to use social media in this fashion. The critical aspect of complying with Regulation FD is to make sure that… Continue Reading

Securities Employees’ Social Media Access Cannot be Touched by their California Employers

Posted in Social Media, State Enforcement

On January 1, 2013, California joined Maryland and Illinois in restricting securities employers’ access to their employees’ and job applicants’ social media accounts.  This new law was announced on Twitter, and provides that an employer cannot require or request an employee or applicant to: disclose a user name or password for the purpose of accessing personal… Continue Reading

How To Be Great At Using Social Media

Posted in Financial Industry Trends, Social Media

In a recent InvestmentNews article by Stephanie Sammons, she highlighted that the major problem financial advisors have with social media is “knowing what to share on social networks.”  Assuming that your firm allows for you to market your services through social media, this article gave sound guidance on what customers and potential customers would want to… Continue Reading

Did You Hear That FINRA May Force BDs To Wear A Scarlet Letter?

Posted in Broker-Dealer Regulation, Compliance and Supervision, Dodd-Frank, FINRA Compliance, Registered Representatives, Social Media

Much like the character in the famous Nathaniel Hawthorne story, FINRA is looking force broker-dealers to wear a mark on all of their social media.  FINRA wants to amend Rule 2267, forcing member firms to have a link to BrokerCheck on the websites and all other forms of social media. The stated purpose of doing… Continue Reading

Blogging and Social Media in the New Year

Posted in Social Media

Of course, this is the time of the year we all make our resolutions and determine how we plan on (hopefully) conducting ourselves in the New Year.  I, therefore, thought it would be the appropriate time to lay out my social media priorities for the upcoming year. Initially, I had an interesting year blogging and using Twitter and LinkedIn.  In fact, I… Continue Reading

Slow IPO Market Means Fewer Securities Lawsuits

Posted in Compliance and Supervision, Financial Industry Trends, Securities Class Actions, Social Media

If you had asked me yesterday whether there were a lot of securities lawsuits last year, I would have said, “Oh, absolutely.”  And I would have been absolutely wrong.  Lawsuits were up in 2011 compared to 2010, but still below the recent average.  As the NYTimes reports, according to a new report by Stanford Law and Cornerstone Research, “188… Continue Reading

If England Attacks Executives’ Cheques, are US Execs’ Checks Next?

Posted in Corporate Governance, Dodd-Frank, Financial Industry Trends, Social Media

In law, America tends to follow in the footsteps of its older sister, Britain.  Sure, sure, we went our own way with that little Constitution thing back in the day.  But as of late, and particularly in the world of securities law and corporate governance, we’ve been following in their footsteps a bit.   Wall Street… Continue Reading

FINRA And Social Media, Is Its Latest Proposal Anything To Blog About

Posted in Broker-Dealer Regulation, Compliance and Supervision, Financial Industry Trends, FINRA Compliance, FINRA Enforcement, Registered Representatives, Social Media

For anyone reading this post, you appreciate the value of social media.  It looks as though FINRA is finally prepared to do so as well. FINRA recently proposed changes to its rules governing communications with investors.  In doing so, FINRA has proposed easing its requirements of pre-approval for a broker-dealer’s use of social media.  Chief among the… Continue Reading

FINRA Provides More Guidance On The Use Of Social Media

Posted in Broker-Dealer Regulation, Compliance and Supervision, FINRA Enforcement, Social Media

By way of overview of the currently regulatory environment, FINRA highlighted that member firms have an obligation to maintain records of business communications regardless if those communications appear on social media. FINRA also reminded member firms that the use of static social media for a business purpose requires pre-approval by member firm. Conversely, interactive electronic… Continue Reading