Social Media Compliance Issues

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Click through for a summary of issues involved in social media compliance.

Social networking is gaining rapid adoption by business professionals to increase brand awareness, client prospecting, and customer retention and loyalty.  As reported by Smarsh, 79 percent of Fortune 500 companies use Facebook, Twitter and LinkedIn to communicate with customers. Financial marketing and communica­tions firm Ledermark found that 85 percent of financial services professionals under 50 are using social media.  As this communication channel matures, these numbers are sure to increase.

Social media communication carries with it a wide array of legal risks, and as such requires the same compliance principles that govern e-mail and IM retention — this extends to tweets and LinkedIn profiles, as evidenced in recent cases and regulations. In the City of Ontario v. Quon, the Supreme Court unanimously ruled that the City of Ontario did not violate its employee’s right to privacy by auditing messages sent over a company-issued pager. FINRA Regulatory Notice 10-06 affirmed that FINRA-registered financial firms are responsible for supervising the use of social networking sites and retaining messages.

Whether your firm allows social networking or not, employees are using these sites to help them build business, leaving the company open to compliance violations.  Therefore, it is essential to ensure company internal policies and archiving systems extend to these channels to remain compliant.  Smarsh has provided the following information with regard to social media compliance.

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