Securities regulators are coming out against new state laws that prevent companies from looking at employees’ social media accounts.
There is a growing concern among regulators and industry groups over the misuse of personal Facebook and Twitter accounts, and they are asking for some exemptions to be made in state laws so that some financial firms are able to keep tabs on personal accounts that can negatively affect their investors, The Wall Street Journal
Since the start of 2013, 35 states have introduced legislation regarding social-media privacy in addition to five states that have already approved such laws.
The Financial Industry Regulatory Authority is asking legislators in about 10 of those states to make exemptions in currently proposed laws, a Finra spokesman told The Wall Street Journal.
They are concerned that the proliferation of financial advice in social media could open up new opportunities for Ponzi schemes and fraud, and damage could be done to companies if they are not aware of employees who are using Facebook and Twitter accounts to make unauthorized offers to investors.
The proposed legislation, as well as some that has already passed, often allows for checks to be made in the case of a formal investigation, but companies think there is a legitimate need for them to keep track of any tweets and postings that are business related.
A spokesman for the Securities and Exchange Commission says they are “monitoring developments” in the state laws.
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