Social Media Guidance for Broker-Dealers

April 2014

 

The rules that broker-dealers must follow with regards to their use of social media differ from those affecting investment advisers ("IA"s). Of particular note are the different requirements covering "testimonials." Under Rule 206(4)-1(a)(1) of the Investment Advisers Act of 1940 ("testimonial rule"), IAs are generally prohibited from using or referring to testimonials in any advertisements and therefore must navigate this strict rule when posting information on their websites or in their use of social media.

 

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