If worker social media accounts are private, how can financial firms check for trading issues?
Amidst a growing trend of protecting individuals’ social media accounts from employer scrutiny, securities regulators are trying to put the brakes on burgeoning privacy legislation that has been pondered in 35 states and enacted in at least five. Dozens of new bills have already been introduced this year.
The problem is, financial firms need to keep tabs on what workers are saying on Facebook and Twitter about companies related to their work, and failing to follow up on red flags suggesting misuse could mean potential liability for employers and losses for investors, the Wall Street Journal reports.
Hence, the Financial Industry Regulatory Authority has been lobbying in about 10 states, asking lawmakers to rethink the scope of proposed privacy protections for social media users.
Meanwhile, uncertainty about the parameters of state laws and how they interact with FINRA rules that encourage members to use specialized software and keep track of what workers are saying in personal social media accounts continues.
In a worst-case scenario, financial companies could potentially violate obligations under both.
“It may be that the FINRA rules will preempt the state ban, but that’s not been tested,” Scott Rahn tells the newspaper. He is a partner at Greenberg Traurig.
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