OCIE Staff Release Social Media Risk Alert for Investment Advisers


On January 4, 2012, staff at the SECís Office of Compliance Inspections and Examinations (OCIE) released a National Examination Risk Alert regarding investment adviser use of social media. The alert is based on observations from recent evaluations of investment advisers whom the OCIE staff identified as using social media, possibly a result of the purported social media sweep in January 2011.

The alert reminds advisers that social media use must comply with the federal securities laws, including the antifraud, compliance, and recordkeeping provisions. In addition, the OCIE staff included an extensive, though not exhaustive, list of factors for advisers to consider when incorporating social media into their compliance programs. The factors include clear and consistent policies and procedures, content standards, pre-approval requirements, recordkeeping requirements, and testimonial-like features of social media sites.

Though the SEC, as a matter of policy, does not consider the alert legal advice, it represents the SECís most comprehensive and targeted guidance to date regarding the use of social media. If your firm allows or is considering allowing social media use, we highly recommend you read the entire Risk Alert.








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