SEC Busts Broker Dealer Offering Securities on LinkedIn

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6 January 2012
Michael Fitzgerald

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 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.

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Asia-Pacific, EMEA, LATAM, North America