State Social Media Privacy Laws Enacted
Maryland, Illinois and California have recently passed state privacy laws that prohibit an employer from requesting an employee or prospective employee to provide access to password protected personal social media accounts. Therefore, absent an applicable exception, investment advisers with employees in these states may not seek access to password protected personal social media accounts in order to monitor or test compliance with firm social media policies.
Maryland’s law, the only one already in effect, carves out an exception for conducting an investigation to ensure compliance with securities laws. California’s law, which will go into effect January 1, 2013, includes an even broader exception for investigations of employee misconduct or employee violation of applicable laws and regulations. However, the extent to which either exception would cover an investment adviser routinely monitoring employee personal social media sites is unclear. The Illinois law -- also scheduled to go into effect January 1, 2013 -- is the strictest of the three and does not include any exceptions.
For clients of Vista360, these laws should not significantly impact social media policies. We have always recommended that advisers prohibit employee use of personal social media for business purposes. Moreover, we have discouraged advisers from asking employees or prospective employees for personal social media passwords. However, there are possible broader implications worth considering. For example, “friend requesting” employees on Facebook or other social media sites by Compliance, even if done for non-business reasons, could be interpreted as requesting access to personal information in violation of the privacy laws. Advisers should consider discussing with legal counsel how these laws might affect employee handbooks and business operations.
Advisers that do not have employees in Maryland, Illinois or California should still take note of what appears to be the start of a general trend with more states currently considering similar laws and federal legislation proposed in the House of Representatives.
FCPA Resource Guide Released
The SEC and DOJ jointly issued a Resource Guide to the Foreign Corrupt Practices Act (FCPA). Vista360 clients subject to FCPA are encouraged to consult this resource for greater insight into FCPA requirements and how agencies interpret these requirements.