Monthly Regulatory Summary As the regulatory landscape is constantly evolving, Compliance Risk Concepts (“CRC”) is […]
When I was a freshman at DeSales University my younger, teenaged sister called me one night to tell me, in a very excited tone, “Guess what! There is this thing called the World Wide Web, it’s so cool! You can talk to people from all over the world!”. I know, I’m dating myself but what the heck. Fast-forward some 20 odd years later (I keep dating myself) and that excited younger sister has had a multitude of social media websites to choose from to communicate with people from all over the world and in more attractive interface: Facebook. Pinterest. Instagram. LinkedIn. Twitter. YouTube. Etc., etc.
How has the internet affected your personal life? What about your professional life? Do you remember the first time you created a Twitter account and tweeted all sorts of things about your firm and how amazing it was and all the wonderful services your firm provided? How about the first time your compliance officer approached you about your twitter account? Do you think compliance regulations have gone too far in policing professional social media? Let’s get a conversation going in the comments section.
Inevitably, I am confident we can all agree that the role social media has played in our personal and professional lives has been astounding. Over the years compliance staff have had to endure this significant change in the workplace and have worked to determine how best or even if they should monitor social media interactions of their firm’s employees. Regulators have seen this impact and now provide insight into how firms should curb and supervise social media use.
FINRA has been releasing notices relating to social media for a few years and most recently this past April. The notices are in Q&A format and give us a better understanding of FINRA rules and expectations regarding the rapidly changing digital communication landscape. I have included links to each of the three FINRA notices for your reading pleasure:
The FINRA notice released in April contained twelve Q&As which I have summarized and compiled in a friendly block format below. I also added my own two cents because what is a consulting article without your favorite consultant’s feedback? Cheeky, I know. I hope you find the way I have summarized and organized the data suitable for your business needs. Feel free to leave your comments and questions.
Thank you for reading! If you would like a Word copy emailed to you for easier reference please feel free to reach out to me directly at email@example.com.
ABOUT LILIAN COLPAS
Lilian Colpas is an accomplished compliance professional with over 12 years of global compliance experience. Lilian provides consulting services to SEC and state-registered investment advisers and conducts AML independent reviews for broker/dealers. Previously, Lilian held roles as a compliance officer for Davidson Kempner, Harding Loevner and AIG Global Investments (now PineBridge).
1 “Ongoing” means: (a) the link is continuously available to investors who visit the firm’s site; (b) investors have access to the linked site whether or not it contains favorable material about the firm; and (c) the linked site could be updated or changed by the independent third-party and investors would nonetheless be able to use the link.
2 Native Advertising is defined a content that bears a similarity to the news, feature articles, product reviews, entertainment and other material that surrounds it online.
3 See: FTC’s Enforcement Policy Statement on Deceptively Formatted Advertisements, December 22, 2015
4 Rule 2210(d)(6), states that: (A) If any testimonial in a communication concerns a technical aspect of investing, the person making the testimonial must have the knowledge and experience to form a valid opinion. (B) Retail communications or correspondence providing any testimonial concerning the investment advice or investment performance of a member or its products must prominently disclose the following: (i) The fact that the testimonial may not be representative of the experience of other customers. (ii) The fact that the testimonial is no guarantee of future performance or success. (iii) If more than $100 in value is paid for the testimonial, the fact that it is a paid testimonial.