Reporter Dalvin Brown advised that “deleting old social-media posts is good hygiene, no matter who you are.” See The Wall Street Journal, How to Delete Your Old Posts on Instagram, Facebook and Twitter (posted February 20, 2022). Agreed. Posting to social media can lead to unintended, and sometimes severe, consequences. However, industry practitioners are reminded that if you use social media for business purposes, then exercising social media hygiene may not be that simple.
Under SEC Rule 17a-4(b)(4), “copies of all communications sent . . . by the member, broker or dealer . . . relating to its business as such” must be preserved for at least three years. In addition, FINRA Rule 4511 requires broker-dealers to preserve records in accordance with the applicable Exchange Act rules, or in the absence of an applicable rule, at least six years. To be clear, there is a difference between making communication available on a particular social media channel and preserving that communication to comply with the regulators’ recordkeeping rules. One can remove content from the former without necessarily running afoul of the latter. However, it is a good rule of thumb to remember that a social media post might be gone, but not necessarily forgotten.
Navigating the social media world can pose challenges. Please contact me if you have any questions about using social media in the broker-dealer or registered investment adviser space.
Thank you for reading this post. Please know that I wrote it for informational purposes only (some may consider it ADVERTISING MATERIAL) and did not intend for it to be legal advice or to form an attorney-client relationship with you – especially in jurisdictions where I am not licensed to practice law. I encourage you to seek your own counsel to help you with your specific situation. To that end, I invite you to contact me if you would like to discuss my services.
Ryan Smith is a partner of Practus, LLP and based in the Washington, D.C. area. His practice focuses on helping broker-dealers, registered investment advisers and their associates address a wide range of legal and compliance issues.