FINRA calls for social networking audit trail

On Tuesday, October 27^th, Richard Ketchum the CEO of FINRA was interviewed on the “Closing Bell”. By way of background FINRA is the largest independent regulator for all securities firms in the US.

The interview, shown above, focused on the use of social networking tools, like Facebook, LinkedIn and Twitter, by the financial community such as brokers, financial advisors, insurance agents, etc.

While FINRA is still officially working on a definition around social media use and tracking, Richard Ketchum made two very clear points.

First he points out that these social tools are valuable communication channels and blocking access is not the answer.

“Many of them prohibit their reps from using it now, but you know the reality is that’s how everybody communicates. What you’ve got to do is get the information, not prohibit it. It will never work.”

Second, he goes on to say that companies must have a good audit trail of this activity and content.

“We got to have a good audit trail – that the firms have to have it for a compliance standpoint,”

We’ve seen this trend coming in the industry for a while and the good news is that many of the companies we work with are taking the necessary steps today. Look for more information soon on how Socialware is helping companies deal with theses compliance, data security and discovery concerns.