Like It Or Not: Social Media and the Testimonial Rule

Social media took center stage again when the Division of Investment Management of the Securities and Exchange Commission (“SEC”) released long awaited guidance on the applicability of the testimonial rule under the Advisers Act to the growing use of social media by investment advisers. But is it the Liberty Bell of social media freedom ringing in a new era of marketing, or is it the death knell of current investment advisory practices?

While the March 2014 Guidance Update expands on the social media risk alert issued by the SEC in January 2012, the latest guidance appears to have missed its mark. Rather than substantive guidance pertaining to the application of the testimonial prohibition, the guidance instead announced the permissibility of electronic social activity that, to date, has largely gone unused or perhaps even desired by investment advisers, such as republishing Angie’s List or Yelp reviews of their firms. As such, the Guidance Update remains noticeably silent as to the clarifications on which many advisers sought guidance – namely, issues like “How can my firm and employees leverage Facebook for business purposes?” and “What marketing can my firm do on LinkedIn or Twitter without running afoul of the prohibition under the Advisers Act on testimonials?”

Fill in the form below

Loading form...
Category:

Cart

Latest Content

Ascendant’s Jason Morton to Speak on RegTech at Strata Data Conference

Alongside technology experts from American Express, Credit Suisse and CIBC, Ascendant’s Jason Morton will speak on developments in regulatory technology at the ‘Fintech Data Day’ at the annual Strata Data Conference on September 26, 2017 in New York. The Strata Data Conference is an annual conference for technology and business professionals who are seeking innovative … Continued

Hurricane Season: How Does your BCM Program Stack Up?

As Hurricane Harvey touches down on U.S. soil and we hope for the safety of the millions in its path, we encourage all firms, even those outside Harvey’s path of flooding and damaging winds, to consider their BCM readiness for such an event. Business Continuity Plans are designed to ensure firms have conducted sufficient advance preparation so … Continued

Surprise, Surprise: SEC Conducting Unannounced Exams

The Boston Regional Office of the SEC has recently conducted roughly 20 unannounced visits to registered investment advisers in the region. This fact, confirmed during the recent meeting of the New England Broker-Dealer and Investment Adviser Association (NEBDIAA), is in keeping with the SEC’s renewed focus on a more robust examination program. While onsite, the … Continued

One Phish, Two Phish, Red Phish, Blue Phish: How to Detect and Mitigate Social Engineering and Ransomware Techniques

Ransomware attacks like WannaCry and NotPetya are increasing in both frequency and damage, routinely making headline news with their abilities to bring down networks of established companies. Yet these cyberattacks typically start by compromising the weakest point in your security chain – people – through simple or complex phishing techniques before spreading to other parts … Continued

DOL Fiduciary Rule Transition Period Extension to 2019 Requested

The Secretary of Labor, Alexander Acosta, made a court filing on August 9 requesting the Transition Period and Delay of Applicability for the Department of Labor Fiduciary Rule be extended from January 1, 2018 to July 1, 2019. This court filing included extending the deadlines for the following Prohibited Contract Exemptions: Best Interest Contract Exemption … Continued

Mailing List

Subscribe to the Ascendant Compliance email list for the latest compliance resources, conferences, ComplianceCasts™, and more.

Loading form...

Contact Us

Ascendant works together with clients to identify and assess critical needs through customized plans. If you need assistance with compliance functions, regulatory services, cybersecurity or technology tools, we’d love to speak with you.