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Brokers Get Strict Social Networking Rules

Posted by samzenpus on from the no-farmville-at-work dept.

eldavojohn writes "If you're a broker or work for a brokerage firm then you better think twice before posting content to Facebook and Twitter. It seems the static parts of the pages like your profile must be approved and fall under the watch of FINRA. But a post to Facebook or a tweet might constitute a 'public appearance' representing your firm. Which means that 'firms must supervise these interactive electronic communications under NASD Rule 3010 in a manner reasonably designed to ensure that they do not violate the content requirements of FINRA's communications rules.' It's days like these I'm glad I don't work on Wall Street or have jury duty."

39 of 50 comments (clear)

  1. Read the article by Antony-Kyre · · Score: 5, Insightful

    If you're a registered broker or work for firm that sells any sort of investment products, you'll want to think twice before blurting out anything that could be construed as investment advice on Facebook, Twitter, or any other social networking site.

    1. Re:Read the article by MichaelSmith · · Score: 1

      Are you allowed to post as AC?

      --
      http://michaelsmith.id.au
    2. Re:Read the article by Anonymous Coward · · Score: 1, Insightful

      No, that's why I post as an AC.

    3. Re:Read the article by Anonymous Coward · · Score: 2, Interesting

      And it can be added that if you're a stock researcher who happened to be quoted on the news, every man and his dog will ask you "What is a great company to invest in??" and "I bought shares in Lagerfeldt & Grunnmeier Warehouse Consortium 30 years ago and they seem to be worth nothing, should I sell them or what should I do?" Giving any answer at all puts you in the firing line.

      Ironically, while this makes life a bitch, it also boosts earnings - because the compliance hoops function as a barrier to entry.

    4. Re:Read the article by dkleinsc · · Score: 1

      In other words, insider trading must be kept within Goldman Sachs ... er ... I mean ... nothing that could allow insider trading should be sent out to the public where it can be misused. Nothing really wrong with that.

      And I'd happily trade "no use of Twitter" for $150,000 bonuses.

      --
      I am officially gone from /. Long live http://www.soylentnews.com/
    5. Re:Read the article by Dan541 · · Score: 1

      Not in South Australia

      --
      An SQL query goes to a bar, walks up to a table and asks, "Mind if I join you?"
    6. Re:Read the article by MozeeToby · · Score: 1

      Not to mention that this has been the rule of most brokerage firms already, so much so that I was under the impression that it was a FINRA rule already. Solution? Don't put your place of business on your profile and don't talk about investments, not really that hard.

    7. Re:Read the article by Anonymous Coward · · Score: 1, Interesting

      Web filtering products will be adding features that capture these posts originating from your desktop. If you've signed into your computer, the outbound data is traceable back to you. Someone else used your computer, you say? Good luck with that defence. Yes, I work for one of those companies that make those products, and yes we have specific plans to roll out this functionality in the coming months. Thanks to FINRA, our customers are demanding it.

    8. Re:Read the article by Phroggy · · Score: 3, Interesting

      Basically, if your e-mail is already subject to draconian regulations and every e-mail message you've ever sent or received has been archived by a third party and someone in your company's (or your broker-dealer's) compliance department regularly reads your e-mail to make sure you haven't said anything you're not supposed to and every once in awhile FINRA auditors come by to make sure the compliance department is really reviewing your e-mail like they say they are, and now your company wants to start using Twitter for business communications, you can expect the same level of scrutiny of your tweets that you've come to enjoy with your e-mail.

      If none of the above applies to you, then you have absolutely nothing to worry about.

      Also, since all that e-mail compliance stuff only applies to business e-mail and not personal e-mail, the same should be true of Twitter. Keep your personal Twitter account separate from your business Twitter account, just like you do with your personal and business e-mail accounts, and everything is fine.

      --
      $x='S24;r)>63/* h@<5+oZ)32"5cz';$me='phroggy'x$];
      $x=~y+ -xz+\0-Tx+;print$_^chop$me for split'',$x;
    9. Re:Read the article by Meski · · Score: 1

      Maybe I posted it at the internet cafe across the road...

    10. Re:Read the article by MacWiz · · Score: 1

      Only because it's an AC...

      You're going to roll out software that traces outgoing web content back to its source? If you've signed into your computer, the outbound data is traceable back to you.

      No, just to the computer. Depending on the environment a number of people may have access to my computer. So there's a potential for false accusation here, which you obviously recognize. And your advice to those forced to use it?

      Someone else used your computer, you say? Good luck with that defence.

      Here's a better idea. Such a system should have an automatic logout after more than a couple of minutes of inactivity to protect the users from exactly the type of false allegations that you describe. That way, even if you're an idiot, the software will protect you from itself.

      But yours isn't going to do that, I take it.

  2. What's next? by fluor2 · · Score: 1

    Are you gonne monitor my soft-porn surfing too?

    1. Re:What's next? by MichaelSmith · · Score: 1

      Yes. There will be TV cameras in all offices.

      --
      http://michaelsmith.id.au
    2. Re:What's next? by ArsenneLupin · · Score: 2, Insightful

      Yes. There will be TV cameras in all offices.

      ... except in the oval office.

    3. Re:What's next? by martin-boundary · · Score: 1

      Yes. There will be TV cameras in all offices.

      Too right, mate.

  3. FINRA by PM4RK5 · · Score: 1

    ... sounds a lot like Shinra. And we all know well that turned out.

  4. Moronic commentary by Malc · · Score: 5, Insightful

    " It's days like these I'm glad I don't work on Wall Street or have jury duty."

    And if you worked for the CIA, would you be complaining that you can't tweet about classified information? If you've chosen to work on Wall Street, the chances are that you accepted that there are some things you can't talk about long before Facebook and Twitter came along (or if you've just started, you know it's part of the territory). So what?

    1. Re:Moronic commentary by kandela · · Score: 1

      I think the complaint is that you have to jump through hoops to talk about the things you are allowed to talk about!

      --
      Conservation of angular momentum makes the world go round.
    2. Re:Moronic commentary by Hognoxious · · Score: 1

      Is it jumping through hoops to open another account under a fictitious name for talking about furry conventions, kitten huffing and mojito recipes?

      --
      Confucius say, "Find worm in apple - bad. Find half a worm - worse."
    3. Re:Moronic commentary by MrMista_B · · Score: 4, Insightful

      Then whoever's complaining doesn't know what they're talking about. From The Fine Article:

      'If you're a registered broker or work for firm that sells any sort of investment products, you'll want to think twice before blurting out anything that could be construed as investment advice on Facebook, Twitter, or any other social networking site.'

      It's a non-story.

    4. Re:Moronic commentary by victorhooi · · Score: 3, Interesting

      heya,

      Yeah, I'd have to agree, this is a non-story.

      I also work for an IB, although not in a client-facing area. Still, I'm not enough of a prat to intentionally start posting privileged info or restricted info on a public forum, or even a private form for that matter.

      When we first interned, they told us there were restrictions on the sort of trading we could do on our own (e.g. have to disclose to the bank, must hold for 30 days etc.). A lot of people whined at the time, but look, seriously, you're working full-time for a IB, it's not like you really need to do day-trading on the side to put bread on the table.

      For fun, sure, but how the heck do you find time during the day to do any serious trading, on your own account? And you're risking a lot, who's not to say that something you overhear at work won't influence your personal trading decisions, whether subconsciously or not. Or maybe a post-it note you saw on somebody else's desk? A little trading for fun, maybe, but I certainly wouldn't put the house on it, or start leveraging for it. So if I lose, meh, it's just pocket change.

      It's the same reason I don't use FB, or put drunken photos of myself on Twitpics (well, fine I don't drink but meh, you get the idea). Civil rights or not, I don't want a Google search for my name by a HR hack to turn up something bad.

      Cheers,
      Victor

    5. Re:Moronic commentary by mdwh2 · · Score: 1

      You're right, although the article is then more vague on the matter:

      Based on the new guidelines, it appears that the static parts of a Facebook page, like an employee's personal profile, fall under the FINRA rules that govern firms' marketing to the public, with the result that they need formal approval before being posted. The dynamic, conversational parts of a page--specifically, Facebook's wall, a blog's comments section, and other places where users interact with each other--could constitute a "public appearance" on behalf of the firm, which means posts don't have to be approved beforehand, but "firms must supervise these interactive electronic communications under NASD Rule 3010 in a manner reasonably designed to ensure that they do not violate the content requirements of FINRA's communications rules."

      Does this just mean "posts that are giving advice", or any content?

      Now, it only seems to refer to Facebook pages etc where the person identifies themselves as an employee of the firm (see the previous paragraph to the one I quoted), so it ought to be easily fixed by simply not doing that. But there are plenty of people on Facebook who do think nothing of listing who they work for in their profile (or doing it implicitly, such as "fanning" their company, or joining a network for their company), and may not realise that this means their Facebook page is now subject to these guidelines.

    6. Re:Moronic commentary by AarghVark · · Score: 2, Insightful

      Yeah, but unlike the folks at the CIA they get hefty bonuses. Makes me cry to think that they have to deal with some of the same types of rules that police, teachers, and doctors already have to deal with regarding their actions outside of the office. If they don't like the responsibilities of the job they are always free to quit. These jobs typically pay a lot more than other jobs which fall under similar levels of scrutiny.

    7. Re:Moronic commentary by Anonymous Coward · · Score: 1, Funny

      Because idiots these days cannot shut the fuck up about facefuck and twittard. I wish there was another planet to move to, so I could get the fuck out of here.

    8. Re:Moronic commentary by ottothecow · · Score: 1
      30 day holding periods eh? Damn seems a little harsh...what if something is really tanking and it makes sense to bail?

      Last time I worked somewhere where my holdings were restricted, I couldn't touch the financials or anywhere there might be a conflict of interest, but if I was cleared to trade it, I could trade it whenever/however I wanted. Of course I didn't actually have to register my brokerage account with them either (just self-report holdings to keep from working on conflicts)...so once you have taken that step, it is probably easier to pile on the rules.

      --
      Bottles.
    9. Re:Moronic commentary by Nobo · · Score: 1

      And, if you work for any publicly traded company, and have access to material non-public information, then the exact same rule would apply.

      Suppose you work for a company, and you tweet information about your company that has not been disclosed publicly through a formal press release, and which contains information that would cause someone to estimate the value of the company differently. If someone reads that, and makes an investing decision based on it (they buy, or sell, or short stock in your company) then, boom, you just broke the law by improperly releasing that information. If you disclose it to a small group of friends (say your Facebook circle), then they have you (and your friends) for insider trading. It won't just get you fired, it'll put you in jail.

      Nothing about this is peculiar to brokerages.

  5. Funny by DoofusOfDeath · · Score: 2, Funny

    It's days like these I'm glad I don't work on Wall Street or have jury duty."

    Funny, I was thinking that it's days like his when I'm glad I have no urge to use Facebook :)

    1. Re:Funny by characterZer0 · · Score: 1

      It's days like these I'm glad I don't work on Wall Street or have jury duty."

      It is days like these that you are glad that in certain circumstances you could not do things that you could not do in other days anyway because they have not been invented yet?

      --
      Go green: turn off your refrigerator.
  6. Crime Pays by Doc+Ruby · · Score: 1

    It's days like these I'm glad I don't work on Wall Street

    You mean days for which you get paid $100,000 each or more, if only you post investment advice according to the most minimal rules? You sound like a broker.

    --

    --
    make install -not war

  7. Exactly backwards by tjstork · · Score: 1, Troll

    This rule is exactly backwards. We should be encouraging brokers and trading houses to open up their secrets so we can have a more transparent marketplace. Ideally, every trading comment and every piece of investment advice ought to be more public and more open source than not.

    It's just a dumb regulation.

    --
    This is my sig.
    1. Re:Exactly backwards by pnuema · · Score: 4, Interesting
      Speaking as a former brokerage employee...

      Didn't read the article, but the industry has very specific rules about what you can tell a client. Basically, you can never guarantee something will make money. Firms have to be able to produce 7 years of correspondence from a broker on demand. This meant that as an employee of a firm, while at work I was not able to use any communication channel not controlled by the firm (due to archive reasons). This meant no web mail, twitter, Facebook, anything. From what I see, FINRA is just pointing out that even though technology has changed, these rules have not.

    2. Re:Exactly backwards by Nobo · · Score: 1

      There are existing rules and policies on the proper disclosure of material non-public information. The proper conduit is a formal press release by the corporate communications office of your company. A Facebook post or tweet is shockingly far from an appropriate method of disclosure of this type of information.

      This is not just a "dumb regulation", it is a federal law with implications on securites fraud and insider trading. Your opinion, sir, is moronic.

    3. Re:Exactly backwards by tjstork · · Score: 1

      This is not just a "dumb regulation", it is a federal law with implications on securites fraud and insider trading. Your opinion, sir, is moronic.

      This moron seems to think that if ALL of the communications from a broker were public, then there could not be insider trading now, could there? For that matter, if there was fraud, there would be a much larger body of data for -everyone- to examine to see if a broker was up and up.

      You are only trying to preserve a means of keeping secrets without actually admitting that having any secrets at all is essentially what screws markets up. It's pretty cut and dry, and this is a black and white issue. Either you have full disclosure, or you aren't honest.

      --
      This is my sig.
    4. Re:Exactly backwards by tjstork · · Score: 1

      Any Wall Street creature that complains

      Blah blah blah. Congress pisses away more money in a year than Wall Street does even with its bailouts.

      --
      This is my sig.
  8. "It's just a dumb regulation." by John+Hasler · · Score: 3, Insightful

    You wanted more "oversight". You're getting it.

    --
    Warning: this article may contain humor, sarcasm, parody, and perhaps even irony. Read at your own risk.
    1. Re:"It's just a dumb regulation." by tjstork · · Score: 1

      You wanted more "oversight". You're getting it.

      I didn't ask for it.

      --
      This is my sig.
  9. Old news... by chill · · Score: 2, Informative

    Working as an IT Director for a broker/dealer firm a couple years ago, this was policy.

    ALL telephone calls into and out of the office were recorded and archived for 10 years. All e-mail was archived for 7. IM was forbidden. ANY web presence, from web site to Facebook must be approved in advance from the compliance department (lawyers). There are web hosting companies that specialize in this, with SEC/FINRA pre-approved content and approval accounts for compliance.

    We had finally moved to the state that any new independent financial adviser that joined MUST use a web site with our approved hosting service and may NOT use their own.

    Violation were punishable by company imposed fines and the possibility of losing your license, and they were STRICT.

    --
    Learning HOW to think is more important than learning WHAT to think.
  10. Re:My employees are restricted from doing it by NeoSkandranon · · Score: 1

    Freedom of speech is with respect to legislation, not employer-employee agreements.

    --
    If you can't see the value in jet powered ants you should turn in your nerd card. - Dunbal (464142)
  11. Re:Reminds me of the NSW department of education by tehcyder · · Score: 1

    An existing protection is that despite working in IT and nowhere near kids, we needed to sign off on allowing background checks and state we'd never been convicted of any of a list of crimes they felt would endanger children.

    You don't see how you might want to prevent paedophiles from working somewhere with access to large volumes of data about children? Really?

    --
    To have a right to do a thing is not at all the same as to be right in doing it