The Securities and Exchange Commission (SEC) announced yesterday that they have brought charges against a broker dealer for offering fictitious securities for sale on social sites. There are several good messages involved with this announcement. First, the person charged was caught before completing a sale. There is no more proactive protection than that. Second, this demonstrates that the people responsible for overseeing financial transactions are active on social media and that they are “listening.” I continue to be concerned that budget constraints will negatively affect social media monitoring and enforcement. Finally, it is a chance to reinforce the regulations that FINRA already has in place for the use of social media for legitimate purposes.
The announcement is located at
I wish the authorities all the best in continuing to be successful in these endeavors. If there is a next Bernie Madoff, let him do his damage outside the realm of social sites.
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Mike Fitzgerald is a senior analyst in Celent's insurance practice, and can be reached at mfitzgerald@celent.com.
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