Wall Street pushes for exemptions in state social-media monitoring laws

Brokers and traders need to be able to keep tabs on non-personal social media chatter by their employees, FINRA says

By , Computerworld |  Security

The Council of State Governments said it has received several reports of people being asked to delete their social media accounts, "friend" the human resources director and/or supply private login credentials to employers.

George Smaragdis, a FINRA spokesman, emphasized that the exemptions it is seeking are consistent with the objectives of the state privacy laws.

"We have never said that firms are required to conduct routine surveillance of representative's personal social media, nor have we said they must obtain passwords and user names to keep on file 'just in case,' " Smaragdis said in emailed comments to Computerworld.

Wall Street firms that prohibit employees from talking about business on social media sites need to have the ability to ensure that employees are complying with those rules, he said. Some firms require employees to certify on an annual or on a more frequent basis that they are acting in a manner that is compliant with all of the company's policies, he said.

Such firms need to have the ability to follow up on any "red flags" that may indicate that an associated person is not complying with firm policies, Smaragdis noted. "Please keep in mind that our social media guidance relates to business communications" only and not personal communications, he added.

FINRA is not the only organization to have raised such concerns. The Security Industry and Financial Markets Association (SIFMA) has been lobbying for changes to state social media privacy laws. In a letter in February to the authors of pending social media law in Colorado, SIFMA argued for the same kind of exemptions sought by FINRA.

The securities industry has no interest in monitoring employee social media accounts that are used only for personal purposes, SIFMA said. However, research has shown that nearly 60% of financial services professionals with social media accounts use them for professional purposes several times a week. Close to one in three use it for business on a daily basis, SIFMA said.

"Business use includes, among other things, reading and posting commentary, monitoring and sharing relevant news, business promotion and brand building, sharing best practices, and obtaining customer feedback," SIFMA noted in its letter. A "personal" account that is used for business purposes must be treated as a business account," and be subject to monitoring, the group said.

Originally published on Computerworld |  Click here to read the original story.
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