Is LinkedIn Compromising Your Compliance for Financial Firms? 4 Things You Can Do to Protect Yourself.

A lot of companies like to make use of LinkedIn’s services. Among its other benefits, LinkedIn is a great platform for generating leads for businesses.  It provides an arena to maximize overall company exposure through the use of its company pages which allow for promotion of your accomplishments and company projects and goals.  It’s an efficient tool in today’s marketplace.

Are there risks for those who make use of LinkedIn’s services?

For businesses involved in the financial sector who are bound by strict compliance legislation, it’s critical to know if posting on LinkedIn or other similar social media platforms could potentially land you in hot water with compliance enforcement officers.

You are responsible for the content you post — even if the site itself makes no claims to uphold the compliance regulations necessary for your industry.

Violations for non-compliance carry stiff penalties, and they are unforgiving even if the mistake was not directly your own.  You just cannot be too careful.

Social media platforms evolve at a faster pace than the SEC (Securities and Exchange Commission) and FINRA (Financial Industry Regulatory Authority). There are glaring loopholes that can leave you open to potential infractions.  Since one of the primary advantages of LinkedIn is the opportunity to network with similar businesses and generate new customer acquisitions, you are likely using the site to communicate with potential clients.

FINRA has taken some action (FINRA’s Rule 206(4)) to try to close the gap between regulatory actions and media outlets.  They have provided some legislation to guide businesses employing these sites to procure new clients. Because there is no “letter of the law,” financial businesses are left to wonder precisely what to do to ensure that they are not in danger of inadvertently violating compliance standards.

Here is a set of general guidelines to help keep your financial business protected while using networking sites like LinkedIn.

  1. Establish a set company policy for social media activity.

Having done your research as to what is acceptable under the compliance standards regulations now in place is critical.  Since there is no specific set of published guidelines yet in place, you must take the time to craft your own.  Among the things included in this set of instructions should be precise steps that must be strictly adhered to when making a social media post.  It is also wise to include a list of things that are permissible and things that must be avoided.

It is also vital that your staff understand where they should go when they have questions.

It cannot be overstated that when it comes to compliance issues, it is best to ask questions rather than simply assuming.  Since compliance regulators exercise zero tolerance for mistakes made of ignorance, it is better to be extra cautious than to live to regret it.

A comprehensive company policy for media activity that meets compliance standards should include:

  1. A list of approved advisors
  2. The specific content that is acceptable for public access
  3. Who has permission to use social media and at what times of day
  4. Proper compliance review procedures
  5. Proper advance post-approval processing

Keep a record of all online work.

The good old paper trail—you need it.  It is of paramount importance that all work conducted on social media platforms is both backed up and archived in a safe location.  You don’t know when you will be audited and will need access to this critical information.  It’s an important step in your compliance adherence strategy.

Make use of a data archiving tool to record all conversations, posts, and activities on your social media profiles. As with all vital office data, this set of archived files must also be safeguarded with secure data backup services.

Why such a precaution?

You will need access to this information during an audit.  If a compliance evaluator is to ask you questions, you want to have easy access to all of the necessary information.  Ensuring this data is also archived also affords you the luxury of being able to review the material for proper company policy adherence.  Catching and fixing errors early on can save your business a lot of headaches and expense down the road.

  1. Pre-approve all LinkedIn recommendations through a trusted advisor before implementing.

LinkedIn Recommendations might be great for other industries.  But for those involved in the financial sector, following them without thoroughly checking them to ensure proper compliance standards are employed can be disastrous. Always remember that it is not LinkedIn that will be held responsible for compliance violations on YOUR company profile.  You will.  Blindly following ANY recommendation without doing your due diligence is a recipe for disaster.

  1. Employ thoughtful, intelligent, and safe work processes.

Proactive and thoughtful work practices now can prevent compliance problems later. Endorsements are the particular problem to those involved in the financial sector.  Great care must be taken to avoid them altogether.

When considering posting material, always give it great consideration.  If anything seems troubling to you or you just don’t feel at peace with posting it, don’t.  Trust your instincts.  It is better to be overly cautious than to wish you had been.

Always remember that any posts you comment on are a reflection of your business.  Even an innocent remark on a third party post can be considered an endorsement – something which is strictly prohibited by FINRA.

It’s a lot to remember, and it’s a lot of work to undertake.  But by taking the time now to construct a solid company procedural manual for social media platform work, you can protect your financial firm’s reputation and stay on the good side of compliance regulators.

Has compliance legislation left you feeling overwhelmed? For help with these issues and more, contact the IT management team at KalioTek™.  We have solutions to help you get and stay compliant with your social media tasks for the financial field.

For more information, reach out to us at 1 (408) 550-8000 or sales@kaliotek.com.

Published On: 20th February 2018 By: Mark Richards
KalioTek™ > Have Questions About Information Technology? KalioTek™’s Blog Answers Many Of Your Day-To-Day Tech Questions. > 4 LinkedIn Tips All Financial Firms Must Know Immediately