Finding A Way.

FINRA Conducting Social Media “Sweeps”

facebookfinalFINRA is currently conducting  “spot checks” of how broker-dealers are policing social media use. The examination letters rely on FINRA Rule 2210(c)(6), which states that each FINRA firm’s written communications are subject to a periodic spot-check procedure.

The latest effort specifically requests information regarding broker-dealer use and monitoring of social media communications for the firm itself and individual employees.

Firms receiving the letters are requested to provide the following:

  • An explanation of how the firm is currently using social media (e.g., Facebook, Twitter, LinkedIn, blogs) at the corporate level in the conduct of its business.
  • The URL for each of the social media sites used by the firm at the corporate level, the date the firm began using the sites, and the identity of all individuals who post and/or update content of the sites.
  • An explanation of how the firm’s registered representatives and associated persons generally use social media in the conduct of the firm’s business, including the date(s) the firm began allowing the use of each social media platform and whether such usage continues.
  • The portion of your firm’s written supervisory procedures concerning the production, approval and distribution of social media communications in effect during the time period February 4, 2013 through May 4, 2013.
  • An explanation of the measures that the firm has adopted to monitor compliance with the firm’s social media policies (e.g., training meetings, annual certification, technology).
  • A tabular list of the firm’s top 20 producing registered representatives (based on commissioned sales) who used social media for business purposes to interact with retail investors as defined in FINRA Rule 2210(a)(6) during the time period February 4, 2013 through May 4, 2013.

As always, if you have questions or comments, please call, e-mail or tweet me @NYBusinessLaws.

Eckerle Law offers legal advice in a variety of transactional and regulatory matters and serves companies’ plenary business law needs. Its founder, Bettina Eckerle, is a veteran of Debevoise & Plimpton and Wachtell, Lipton, Rosen & Katz.  She also served as the General Counsel of two companies en route to IPO. Please visit the Eckerle Law website for more details.