You Can Learn Something From the Government – Really, You Can!!

If you manage groups of folks doing social media and are not all that savvy in the space yourself, I want you to stop reading and go and get a social media for dumm … err … inexperienced people right now.  Go read it and come back.  We will wait.  If you are the lawyer that has been tasked with providing oversight, go do the same thing.

Now that you are back, you are wondering how to manage all those platforms, all those networks, all your speakers, etc.  How do you even get started understanding where the risk might be.  While I am generally not a big fan of the Financial Industry Regulatory Authority (FINRA) and their missives on social media, they have provided a nice framework for you to get started.

This is just the beginning of your risk audit.  Do not take this as the end of your risk audit as well.  You have a lot more work to do, but this provides a good start to understanding your brand’s presence and the potential risks you are facing.

FINRA’s Framework as a Beginning

FINRA just did a huge favor for all who are struggling with how to start understanding the risk in this space.  Not just those that are regulated by FINRA.  The rest of us get the benefit of the pain that will be felt by them.

If you are regulated by FINRA they just fired a shot across your bow that missed and hit your bow.  They are sending out targeted examination letters to all of their regulated entities.  If you haven’t received your hard copy, or if you are interested in knowing what those poor sods will have to respond to, head on over to FINRA’s site and read what they have put up.

Let’s go through them in some detail and see what lessons can be learned.

1.  An explanation of how the firm is currently using social media (e.g., Facebook, Twitter, LinkedIn, blogs) at the corporate level in the conduct of its business.  Please be specific as to the business purpose of each social media platform as it is used by the firm.

What a great way for someone to get a quick overview of what you are doing and why you are doing it?  If you (meaning social media managers) cannot do a good portion of this off the top of your head, you need to sit down and re-evaluate your social media footprint.  If you manage social media folks, spring this question on them.  If they cannot answer it you need to dig further.  I will give you a small pass if you are a very large organization with a decentralized social media structure.  Only a small pass, because each of the areas that operates social in that decentralized structure should be able to do this.  Then someone should be tasked with collating that across all those areas as well.  If you do that, you will be leaps ahead when regulators finally call on you.  They will, it is only a matter of time, folks.

Being hip and cool is not a business purpose, by the way.  Hopefully your folks are smart enough to do an instant translation in their head from ‘hip and cool’ to ‘cutting edge engagement of our most enthusiastic users.’  Don’t you love words.  If they can’t translate, teach them to do it.

Using this as a barometer for future activities is incredibly powerful as well.  When the next social platform pops up on the horizon and your folks tell you that your brand has to be on it, ask what the business purpose is.  If you don’t like the answer, use the greatest tool in a business leader’s toolbox, saying no.  It is so easy to say yes to everything, but if you are everything to everyone in social media, you can’t be anything to anyone.

2.  Please provide the following with respect to the firm:

The URL for each of the social media sites used by the firm at the corporate level,

The date the firm began using each of the sites identified above,

The identity of all individuals who post and/or update content of the sites identified above.

This question might be a bit far-reaching as you read it.  I still believe that you should go about this exercise.  For one, it provides you a nice historic timeline of where you have come from, perhaps informing where you are going as well.  However, the last part of this is something you should be able to do.

Way back in April I talked about the risks regarding ownership of social media accounts in Who has the keys — and can you get them back?  If you haven’t placed any type of agreements in place for those folks who are posting on your behalf, either with corporate accounts, or with individual accounts, this is your chance to get them there.

Identifying everyone who posts on your behalf is also one of those things you should have been doing all along.  If you haven’t, use this as your wake-up call.  Get your house in order.

3.  An explanation of how the firm’s registered representatives and associated persons generally use social media in the conduct of the firm’s business, including the date(s) the firm began allowing the use of each social media platform and whether such usage continues.

This is a nice tie-in to your answers for Question 1.  How are you achieving the business purpose you identified?  If your actions are not achieving the purpose, you need to either reevaluate your purpose, or stop your involvement in that platform.  Another opportunity to use that ‘saying no’ muscle.

4.  The portion of your firm’s written supervisory procedures concerning the production, approval and distribution of social media communications in effect during the time period February 4, 2013 through May 4, 2013.

What are your processes concerning posting?  Who determines how to post, what to say, and how do you maintain archives of your activities?  If you are in a less regulated space, these can be simple flow-charts documenting your thoughts as manager of your brand’s social activities.  If you are more regulated, take this opportunity to document and memorialize your processes.  Use that documentation to periodically check to see if your activities are still occurring based on that.

5.  An explanation of the measures that your firm has adopted to monitor compliance with the firm’s social media policies (e.g., training meetings, annual certification, technology).

This should be relatively easy, but I surmise that for most brands it will not be.  Again, it is a good exercise to use to bring all of your thoughts on the regulation of your activities in this space into one place.

Question 6 is very specific to FINRA regulated entities.  Count yourself lucky that you don’t need to do this.


As brands begin to move towards more direct business and commerce in social, I see an increasing trend towards more regulatory oversight.  Doing your homework now will definitely save you pain in the long run.  If social engagement is anywhere within your reporting structure start asking these questions now.  After you read that book, though.


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