Ten Practical Tips For Developing A FINRA-Compliant Social Media Policy

On October 14, 2014, the Financial Industry Regulatory Authority (FINRA) fined a securities analyst $15,000 for "tweeting" opinions about securities without revealing that he owned them. The action – one of roughly 10 involving social media postings over the past several years – highlights the need for research analysts, brokers, and others in the securities industry to implement appropriate policies and procedures for the use of social media networks and any communications to be made available thereon.¹

According to FINRA, the registered analyst's twitter posts dating between 2009 and 2011 violated National Association of Securities Dealers (NASD) Rules 2711(h)(1)(A) and 2210(d)(1)(A), FINRA Rule 2010, and NASD Interpretive Memorandum 2210-1.² Broadly speaking, these rules (and related Securities and Exchange Commission [SEC] requirements) treat social media similar to other business-related communications through other media. The FINRA rules, for example, impose