In The NewsEllen Bessner Highlights Social Media Compliance Challenges for Financial AdvisorsPublished: 07/26/2010 On July 20, 2010, Securities Litigation partner Ellen Bessner was quoted in "Bringing the Cloud Down to Earth," an article which appeared in the Investment Executive. The article discussed record-keeping compliance challenges facing financial advisors when using social media websites. Ellen said that the Mutual Fund Dealers Association and Investment Industry Regulatory Organization of Canada may soon be pushed to address the issue more formally. She noted that in the US, the Financinal Industry Regulatory Authority issued a notice because there is confusion on the application of its existing rules and how to apply them to social media. "We may come to a point where we will need to clarify the issue.” So far, in Canada, added Ellen, greater explanation has only been available on a case-by-case basis. Ellen observed that smaller shops are likely to have a harder time than the big bank-owned firms when drafting a social media policy. Unlike bank-owned firms, at which advisors access the Internet and social media sites through their dealer’s computers, small shops are not always set up the same way. Advisors at smaller dealers are more likely to link to the Internet using a connection that is outside the firm, making it very difficult for a small dealership to monitor how its independent advisors are engaging in social media. This can create a catch-22 for smaller dealers. “They cannot draft a policy they cannot supervise,” Bessner noted. For example, if a small firm bans its advisors from using social media, the firm is unable to ensure those advisors are always in compliance with the ban, explained Bessner. |