The Socially Savvy Advisor + Website: Compliant Social Media for the Financial Industry

Chapter 10What Gets Financial Professionals into Trouble with Social Media?

Sometimes it seems as if social media has just created a universe of new ways for financial advisors to run afoul of regulators.

Consider the following stories.

• A New York-based money manager paid a $100,000 penalty in 2014 and was censured after he used Twitter and other media to disseminate misleading statements about business performance, the Securities and Exchange Commission (SEC) said. Among other things, regulators charged that the manager tweeted that he was responsible for model portfolios in his newsletters that “doubled the S&P 500 the last 10 years,” even though he had no involvement in the model portfolio performance for the first three years.
• The Financial Industry Regulatory Authority (FINRA) fined a Hauppauge, New York, broker $5,000 and suspended him for 10 days in 2013 after he posted unwise remarks on his Facebook account about a pharmaceutical company whose weight-loss drug he was promoting. In disputing a comment about Arena Pharmaceuticals' (ARNA) stock price, the broker wrote: “Another idiotic article on ARNA from someone who has no clue what she's talking about…LMAO. Brooke do your due dili. There's no safer weight loss drug than ARNA.” FINRA said the post made exaggerated claims, was neither fair nor balanced, and neglected to mention that the broker owned 10,000 shares of the ...