Regulatory Wrap Episode #22: Social Media & Compliance, Exploring Fraudulent CEOs & Market Swings

In Regulatory Wrap for the week to March 8, Jennie Clarke asks a timely question: are you managing the risks social media poses to compliance?

12 March 2024 2 mins read
by Kathryn Fallah

In Regulatory Wrap for the week to March 8, 2024:

In this Regulatory Wrap, we recount instances when social media had an impact on firm operations and market integrity, regulatory advances to deter social media misuse, and the importance of capturing and monitoring social channels.

Highlights:

1. The Securities and Exchange Commission (SEC) charged the former CEO of Alfi, Paul Pereria, with fraud due to “materially false and misleading statements” made on social channels attempting to boost the firm’s stock price

2. Silicone Valley Bank’s collapse in March 2023 was intensified by social media speculations that led consumers to lose trust in the bank and withdraw their funds

3. Even the SEC has dealt with social media mishaps firsthand when chair Gary Gensler’s X account was hacked and used to share fraudulent crypto updates

4. The SEC’s Marketing Rule and the Financial Conduct Authority’s (FCA) rules around crypto marketing and messaging to “finfluencers” have been put in place to ensure firms aren’t exploiting social media to misrepresent services to consumers

5. With these occurrences in mind, it is essential that firms utilize solutions that can both capture and monitor social media communications to mitigate possible risks

This Regulatory Wrap is brought to you by Global Relay’s Head of Content, Jennifer Clarke.

Capturing and monitoring social media channels allows firms to accord with regulatory rules and manage compliance risks.