FINRA ISSUES GUIDANCE ON SOCIAL NETWORKING SITES

By:  Michael J. Ernst, Partner FINRA has published Regulatory Notice 10-06, providing guidance on how FINRA’s rules governing communications with the public apply to social media Web sites, such as blogs and social networking sites, that are sponsored by members or their registered representatives.  In publishing the Notice, FINRA noted that 46% of Americans logged onto a social networking site. The guidance, based on input from FINRA’s Social Networking Task Force composed of FINRA staff and industry representatives, is intended to:  

1.              guide firms on applying the communications rules to social media sites;

2.              ensure that investors are protected from false or misleading claims and representations; and

3.              ensure that firms are able to effectively and appropriately supervise their associated persons’ participation in these sites.

  While the guidance in this Notice is useful to firms when establishing their own procedures, each firm is required to develop policies and procedures that are best designed to ensure that the firm and its personnel comply with all applicable requirements. Every firm should consider the guidance provided by this Notice in the context of its own business and its compliance and supervisory programs.  This Notice only addresses the use by a firm or its personnel of social media sites for business purposes.  The Notice does not purport to address the use by individuals of social media sites for purely personal reasons. A copy of the FINRA Notice can be found HERE. 

Stokes Lazarus & Carmichael LLP has represented companies in corporate and litigation matters for over 30 years and is rated “AV^®� and “Preeminent^TM� (5.0 out of 5.0) by Martindale-Hubbell^® (the highest rating given), which reflects “Preeminent� legal ability and “Very High� general ethical standards.  SLC is experienced in representing retail broker-dealers in arbitration and litigation.  SLC provides sound legal advice at reasonable cost nationwide.  If you have any questions regarding securities or FINRA arbitrations, please contact Michael J. Ernst at mje@slclaw.com or 404-352-1465 ext. 41.