Social Networks Raise Serious New Challenges for Regulators says FINRA

image Recently Reuters reported that the Financial Industry Regulatory Authority formed a task force to determine how it can use social networking to “improve the flow of information between firms and their customers” without compromising investor protection.

Wall Street bankers and analysts increasingly want to use social networking to connect and interact with customers, Richard Ketchum, the chief executive of the Financial Industry Regulatory Authority (FINRA) said.

FINRA worries that sites like Facebook and Twitter might not allow companies to keep the kind of archives of their employees business communications required by regulators. 


"We continue to witness the advent of technologies that will challenge your ability to ensure compliance with regulatory requirements," Ketchum told the bankers and dealers. "Social networking is one such innovation."

Most firms prohibit their employees from using sites like Facebook for business, partly because of the difficulties they pose for firms’ ability to meet supervision and record-keeping requirements, Ketchum said.  "Nevertheless, interest in these sites is inevitable and will not go unabated," he said.

We’ve also seen the rise of services like StockTwits, which uses Twitter to form a  community of idea and information sharing service for investments. 

Does your reverse mortgage company have policies for how you communicate through social networks?

Facebook challenges financial regulators: FINRA 

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  • Now I have another reason to use an alias on postings. FINRA regulates my broker-dealer and they could nail me for advocating Long-Term-Care on this forum.
    “1984” all over.

  • Are there any HUD rules or state mortgage laws or regulations that would apply to our industry in the same way? I certainly hope not. How are lenders monitoring this kind of advertising? This is a great topic for your session, Admin.

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