Celent Says

SEC Busts Broker Dealer Offering Securities on LinkedIn

Mike Fitzgerald
Insurance Experts' Forum, January 9, 2012

The Securities and Exchange Commission (SEC) announced yesterday that they have brought charges against a broker dealer for offering fictitious securities for sale on social sites. There are several good messages involved with this announcement. First, the person charged was caught before completing a sale. There is no more proactive protection than that. Second, this demonstrates that the people responsible for overseeing financial transactions are active on social media and that they are “listening.” I continue to be concerned that budget constraints will negatively affect social media monitoring and enforcement. Finally, it is a chance to reinforce the regulations that FINRA already has in place for the use of social media for legitimate purposes.

The announcement is located at http://sec.gov/news/press/2012/2012-3.htm. The posting also includes a useful summary of compliance issues for companies to consider regarding social media (a National Examination Risk Alert titled “Investment Adviser Use of Social Media”).

I wish the authorities all the best in continuing to be successful in these endeavors. If there is a next Bernie Madoff, let him do his damage outside the realm of social sites.

This blog has been reprinted with permission from Celent.

Mike Fitzgerald is a senior analyst in Celent's insurance practice, and can be reached at mfitzgerald@celent.com.

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The opinions posted in this blog do not necessarily reflect those of Insurance Networking News or SourceMedia.

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