Regulatory Outlook | 09.17.21
FINRA Probes Brokerages' Use of Social Media for Prospecting
FINRA said it is performing "a review of firm practices related to the acquisition of customers through social media channels and how firms manage their obligations related to information collected from those customers and other individuals that may provide data to firms." The agency said the investigation was instigated by an SEC query into "digital engagement practices" used by investment advisors and broker-dealers. The commission said it is probing how advisors use tools that cater to investors' behavioral tendencies, like gamification, to influence their activities on websites, portals, and mobile apps. FINRA is asking firms to disclose how they find and pay influencers and to detail all social media communications that influencers have disseminated for them.
Read the full article on Investment Week