17 September 2014

Finra carries out social media spot checks

21 June 2013  |  4293 views  |  0 Facebook

The Financial Industry Regulatory Authority (Finra) has begun carrying out spot checks on how brokerage firms use sites like Twitter, Facebook and LinkedIn.

In a letter sent out to various firms this month, Finra asked for details on how social media is used at the corporate level, requesting respondents to be "specific as to the business purpose" of each platform.

The watchdog also asked for the URLs for each account, the date when firms started using sites, and the identity of people posting on the accounts.

In addition to asking what social media sites are being used, Finra is also demanding details on how they are being tapped and what measures are in place to ensure regulatory compliance.

The letter even asks for recipients' top 20 producing representatives, based on commissioned sales, who used social media for business purposes to interact with retail investors between February and May.

"Please identify the type of social media used by each individual for business purposes during this time period. Please include the individual's full name and CRD number as well as the dollar amount of sales made and commissions earned during the period," says the letter.

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