FINRA Looking into Social Networking as a Business Tool

Lora Bentley

I thought I'd covered the risks posed by Facebook and other social-networking sites from every possible angle already, but today I found a new one.


Reuters reported Tuesday that the Finanacial Industry Regulatory Authority has formed a task force to determine how it can use social networking to "improve the flow of information between firms and their customers" while still protecting investors.


Most financial services firms forbid employees to use social networking for business, writer Kristina Cooke says, because the sites typically do not allow employers to maintain the archives of employee communications that regulators require. But that doesn't mean such sites will always be taboo.


Speaking at the annual meeting of the Securities Industry and Financial Markets Association recently, FINRA chief Robert Ketchum explained the move this way:

We continue to witness the advent of technologies that will challenge your ability to ensure compliance with regulatory requirements. Social networking is one such innovation. Nevertheless, interest in these sites is inevitable and will not go unabated.

It falls right in line with advice Gartner gave symposium attendees: Embrace social networking. It's here to stay.

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