Perils of Social Media and Compliance

May 16, 2012

I’m sure Facebook didn’t mean to cause trouble, but the company’s recent implementation of Timeline for businesses has created a new compliance issue for firms subject to FINRA regulations. InvestmentNews reports on the transition, and warns that more changes should be expected, in “Social Media is Evolving by the Day.”

Regarding Facebook‘s Timeline change, the article explains:

“Among other things, it allows users to add a ‘cover’ to their ‘story,’ edit basic information, quickly jump to the past, see highlights of their Facebook existence from each month at a glance and more easily highlight events that they want others to notice.
“These changes present challenges to many firms.
“‘In general, I think that securities firms that allow Facebook are going to have to provide ongoing guidance when new features are available or they will find that the granular features may quickly land their firm out of compliance,’ Art Metzger, vice president of advertising supervision at Advisor Group, wrote in an e-mail a few weeks ago.”

Such twists and turns emphasize that social media compliance requires constant maintenance after the initial setup. Writer Davis Janowski is right to note that Timeline is just an example of the ever changing nature of social networks. Compliance advisors must stay on their toes, but at least it looks like they can count on some job security.

Cynthia Murrell, May 16, 2012

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One Response to “Perils of Social Media and Compliance”

  1. Surely compliance is binary? » - System Integrity: Without Integrity you don’t have Security on May 18th, 2012 8:28 am

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