Why FINRA Says it Needs Access to Your Facebook Account by Joseph Tacopina

Wall Street brokers were recently surprised to learn that regulators at the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC) are vying to gain access to their personal and private posts on Facebook, Twitter, Google Plus, and other social media platforms. Prominent criminal lawyer Joseph Tacopina has highlighted the potential legal implications of such regulatory actions.

CNN Money reports that regulators are seeking to monitor broker-dealer communications on social networks to prevent the posting of stock tips and business information that could give credence to allegations of insider trading, securities fraud, market manipulation or breach of confidentiality agreements. (“Wall Street wants Brokers’  Private Facebook posts on Stock Trades,” CNN Money, April 22, 2013.)

• The proposed regulations advocate routine monitoring of personal and private communications—all in the name of investor protection. FINRA claims that regulations requiring voluntary disclosures of all material information are insufficient. They argue that more regulation is needed to uncover communications that violate professional codes of conduct. Joseph Tacopina has noted that such measures raise serious concerns about privacy rights.
• Similar attempts by employers to gain access to workers’ personal and private email and social media accounts have been struck down in many states. Invasion of privacy issues have been at the center of state laws banning employer monitoring of personal information. Yet FINRA has already mailed letters to states requesting exemptions to these bans, stating, “Prohibiting access to these accounts conflicts with a[n investment] firm’s responsibilities to comply with federal requirements and threatens investor protection.”

If states permit an exemption for broker-dealer communications, what’s next?  Will FINRA attempt to monitor cellphone, home phone and personal email communications?   Tacopina & Seigel provides comprehensive representation to investors, investment firms, brokers, dealers, traders, planners and fund managers facing invasions of privacy, and potential legal challenges.