RIA Central

In the first week of January, the SEC issued two major alerts on social media – one for financial advisors the other for investors.

It would have been nice if both were as clear cut. But the tips for investors provided a clear roadmap for navigating the social media waters, while the advisor alert was deliberately vague.

The two sets of “guidelines” came down on the same day the agency charged Anthony Fields, of Lyon, Ill., with offering to sell more than $500 billion worth of fake securities on LinkedIn and other social networking sites, and allegedly attracting multiple potential buyers.

From IFAWeb News :

Securities regulators say Fields made multiple fraudulent offers through his two sole proprietorships – Anthony Fields & Associates (AFA) and Platinum Securities Brokers. Fields provided false and misleading information concerning AFA’s assets under management, clients, and operational history to the public through its website and in SEC filings, officials charge in the administrative proceeding. Fields also failed to maintain required books and records, did not implement adequate compliance policies and procedures, and held himself out to be a broker-dealer while he was not registered with the SEC, they say.

It’s the first time the agency has issued a social media warning to investors. The guidelines reiterate many of the tried-and-tested tips for avoiding investment scams, and provided the usual hotline numbers to check out advisors, but also, included some specific social media examples of fraud.

For advisors, the social media alert was not so specific. It mainly constitutes a list of areas RIA compliance departments might want to cover in setting up their own firm social media policies. It was much less direct in its information, and seemed to be geared more toward chief compliance officers than investment advisors.

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