FINRA And Social Media

In anticipation of the SEC's final rulemaking on Rule 506 (required by the JOBS Act to relax the prohibition on general solicitation in certain private offerings), many financial intermediaries have been focused on the ways in which they may use social media to contact potential investors.  Recently, we published a Social Media Guide (accessible here:  http://www.mofo.com/files/Uploads/Images/130528-Socia-Media-Securities-Laws.pdf) that provides useful background.  From FINRA enforcement actions related to improper use of general solicitation in purported private placements, it is clear that FINRA will be attentive to the use of these new tools by broker-dealers.  FINRA also posted a  Targeted Examination Letter—otherwise known as a sweep letter—on its website in which it invoked Rule 2210(c)(6), which provides for periodic spot checking by FINRA of firms' written (including electronic) communications.  We discuss the FINRA sweep letter in an alert found here: http://www.