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Investment advisers can participate in social media as long as they're able to show regulators what they've been up to online.
Although the social-media world is freewheeling, investment advisory and brokerage firms should have their internal policies buttoned down before they venture out into Twitter, Facebook, LinkedIn and other platforms. They'll never know when the Securities and Exchange Commission and the Financial Industry Regulatory Authority Inc. may want to take a look.
“Although Internet content does not disappear [easily], when it does, it can have far-reaching and long-lasting effects on firms and representatives who use it,” Brian Rubin and Caroline Crenshaw, attorneys at Sutherland Asbill & Brennan LLP, wrote in a June newsletter. “Without established procedures to maintain, review and supervise communications transmitted via e-mail, instant messages, blogs, posts and other forums that may yet be invented, companies and individuals can be at risk of violating regulatory obligations.”