Joanna Belbey, Social Media and Compliance Specialist, Actiance, Inc www.bdionline.com

1. Social Media Security & Compliance
July 12, 2012
Joanna Belbey
Social Media and Compliance Specialist
http://linkedin.com/in/belbey
www.facebook.com/#!/joanna.belbey
Twitter: @belbey
https://about.me/belbey

2. Agenda
Introductions
Changing landscape
Social Media Maturity Curve
Early successes
Regulatory landscape
9 things you can do to get started
Materials

3. Why are we presenting to you today?
Joanna Belbey
Social Media and Compliance Specialist
FINRA Education Department
Running training firm
I help firms use social media while complying with the regulations
Twitter: @belbey, @actiance
LinkedIn: http://www.linkedin.com/in/belbey
My biggest challenge?

4. About Actiance, Inc
A decade of expertise, a history of firsts
Global Operations
• 3 US offices, three continents
• 210 employees
Dedicated Social Engagement Team
• Partnering: networks, platforms, service providers
• Regulators: FINRA, IIROC, FSA, SEBI…
• Best Practice enablement, education
Client Engagement
• 9 out of the top 10 US Banks, Top 5 CDN Banks
• 284 FINRA firms
• 100,000 Social Networking users under license

5. Why Customers Select Actiance
“We chose Actiance because they had the resources and
partnering culture to help us with our long term strategy”
– VP Technology, Interactive Marketing
“Actiance’s platform allows us to execute our long term vision of
integrating our internal social platforms with consumer
networks”
– SVP & CIO
“Socialite Enable and Engage offer the best mix of compliance
and marketing capabilities allowing our advisors to develop
their personal brands”
– Marketing Director

8. Internet Application Usage: Perception vs Reality
Perception: 62% of IT Professionals estimated social networking was used within
their corporate network
Reality: 100% used social networking
Perception: 60% of IT Professionals estimated IM was used on their network
Reality: 98% used IM
Actual customer traffic history (150+ organizations)
Representing all Internet activity from over 150K end users

9. Social media usage
A majority of respondents indicate using social media for one or more
business purposes.
SOCIAL MEDIA USAGE
For which of the following business purposes do you use social media today?
Respondents
under 35 are
more likely to
use social
media for
business
purposes
than those 55
or older (68%
vs. 45%)
Base: all respondents in 2012 (1,428) and 2011 (1,597); multiple responses.

10. Social Media Maturity Curve
Early Majority
Early Adopters • Corporate social presence
• Corporate presence • Social media usage
Early Consideration
• Acceptable use policy by distributed teams
• Some corporate advisors
• Social media being
presence
used by distributed • Acceptable use policy
Pre-Consideration • Banned/ restrictive teams/advisors • Next: use social
policy in place
• No social presence • Next: use social to to develop, strengthen
• Pilot program for develop, strengthen relationships, for some
• Restrictive social
content distribution relationships, for also as a sales channel
policy
may be in place some also as a sales
• No social tools • Previous concerns
• Next: justify channel about FINRA and/ or
• Need to: identify distributed teams impact of social media
options, best practices usage overcome by market
acceptance and
demonstrable results.

11. Case Study: Wealth Management Firm (NJ)
Outline Real Results
LinkedIn Only LinkedIn Connection retirement
status change = $2.75m account
Listening is Key, watching
acquisition
connections who matter
– Job Change noticed on Status
Using Social as an integral element
Update = 401k rollover
of communications mix to spot
change – FA obtains 400 new prospects in
Energy market
– New Commercial Account
Opportunity through colleagues
LinkedIn Connections

12. Case Study: RW Baird
Outline Real Results
LinkedIn Already Available to 1200 @MaryS_rwbaird
Veteran Advisers, tech savvy – 51 followers
Authentic Content – 93 Tweets (at the time)
– $1m prospect

13. 20% of enterprises that employ social
Media beyond marketing will lead their industries
in revenue growth by 2015. GARTNER, MAY 2011

14. Why is social important in Financial Services?
In the USA Gen Y accounts for $2.4 trillion worth of personal income
In 2025 Gen Y will account for 46% of personal income
Source: Javelin Research
http://www.stltoday.com/business/local/article_719f49d8-15e6-5c5d-94b7-
992ab12d9f97.html?print=1
Based on 26,749 online adults, USA, Source: Forrester Research, June 2011

15. So who’s using Social Media? And Why?
 Sales & Marketing
 Promotions
 Advertising
 Branding
 Financial Advisors / Producers
 HR
 Background checks
 Recruiting
 Scientists & Researchers
 Information exchange
 Collaboration
 IT
 Investigation of security breaches

16. e

17. Risks of Using Social Media and Web 2.0
Data Leakage Incoming Threats Compliance & eDiscovery User Behavior
Personal SEC, FINRA, IIROC Employee
Information Malware, Spyware Productivity
HIPAA, FISMA
Intellectual Property Viruses, Trojans Bandwidth
SOX, PCI, FSA
Credit Card, Explosion
Inappropriate
SSN FRCP- eDiscovery
Content Every employee is
Client Records FERC, NERC the face of business

18. Industry-Specific Legislation and Regulatory Bodies
Fin Services Energy Healthcare Gov’t
FINRA FERC HIPAA FRCP
SEC NERC State of Oregon
GLBA CFTC Florida GRS
State of North
SOX NFA
Carolina
Red Flag Rules

19. Key Legal Issues of Social Media
Privacy
Content Ownership
Intellectual Property Infringement
Unauthorized Activities
• Harassment
• Discrimination
• Unfair competition
• Defamation
• Confidential info
Regulatory Compliance

20. Overview of Regulation & Compliance

22. Types of financial advisors
Registered Representatives Investment Advisors
(Broker-Dealer)* (Registered Investment Advisor)*
Regulated by FINRA and the SEC Regulated by SEC or state regulators
Paid via commission Paid fee by client
Suitability- recommendations must be Fiduciary responsibility – must place clients
consistent with best interest of clients interests above own
Ethics Legality
Transactions Advice
*Dually registered firms must adhere to both SEC and FINRA rules.

23. Financial Industry Regulatory Authority (FINRA) Regulatory
Guidance 10-06, 11-39
Rule Description Best Practice
Recordkeeping Capture, save and make Third party vendor(s).
easily available, all written
business correspondence
Suitability Recommendations must be Prohibit recommending
suitable for each investor specific products, investment
strategies
Communications with the Content standards, third party Disable the ability to make
public standards, adoption and recommendations. Block
entanglement retweet, “like
Advertising Static v. interactive Pre-approval, post-review
Supervision Demonstrate adherence with Follow risk-based written
content standards supervisory procedures,
training
FINRA Regulatory Notice 07- Ethical walls between Restrict communications
59 research and investment
banking

24. New Regulatory Notices from FINRA
Suitability (12-25) – effective 7/9/12
Investment Strategies
Communications with the Public (12-29) – effective 2/4/13
3 categories (institutional, retail, correspondence)
Exempts from pre-review:
online interactive electronic forum
not a financial or investment recommendation nor
promotes a product or service of the firm

25. The Securities Exchange Commission (SEC) National
Examination Alert
Guidance Description Best Practice
13 factors to consider for Identify risks Consider pre-review of all
effective compliance program content posted by IAs
Third Party Content Possibly testimonials May need to re-evaluate
separate professional pages
Recordkeeping (Advisers Act) Capture, save and make Third party vendors
easily available, all written
business correspondence

26. Regulators and Social Media
FINRA: RR Jenny Ta used Twitter to tout stock. Ta’s “tweets” were
unbalanced, overwhelmingly positive and frequently predicted
increases. Fined $10K and suspended for one year.
SEC Division of Enforcement: Alleges that Anthony Fields of Lyons IL
offered more than $500 billion in fictitious securities through various
social media sites.
FINRA exams: lists of RR using social media, checking against social
media policy

27. 9 steps to mitigate risks to deploy social media
1. Understand your firms landscape, get visibility.
2. Engage stakeholders in policy setting. Set the policy.
3. Consider and address the risks, in a granular fashion.
4. Protect your network from malware, phishing, attacks, data leakage
5. Issue and implement best practice guidelines.
6. Understand and manage the fallibility of human beings.
7. Record and retain (appropriate) communications.
8. Provide education for your users on acceptable and appropriate use.
9. Review and refine policies (regularly).

28. Contact Information
jbelbey@actiance.com
@Actiance, @belbey
Further reading:
Marketers Guide to Social Media in Financial
Services
FINRA 10-06 and11-39 requirements mapped to
Facebook, LinkedIn, and Twitter features
Social Media Handbook
Osterman Research:
The Impact of New Communication Tools for
Financial Services Firms
Actiance Collateral Library
http://actiance.com/products/collateral-
library.aspx

29. Thank you
Joanna Belbey
Social Media and Compliance Specialist
http://www.linkedin.com/in/belbey
@belbey
Confidential and Proprietary © 2012, Actiance, Inc.
All rights reserved. Actiance and the Actiance logo are trademarks of Actiance, Inc