With the rise of social media’s influence on investment decisions we see you, #cryptotok, the SEC has had to adapt its regulatory oversight to include social platforms. In other words: the SEC may very well be watching your Instagram Reels. The SEC is on the lookout on every social platform to identify potential violations, monitor fraudulent activities, and ensure the fair disclosure of information. It’s a proactive approach that aims to protect investors from misinformation and market manipulation. But, hopefully, they don’t forget to like and subscribe while they’re there. The SEC also has a few social accounts of its own, in case you were wondering: Twitter, Facebook, Youtube, and LinkedIn.
About the SEC and social media
While the SEC’s regulations on social media affect a wide range of people and organizations. Those involved in the financial services industry should pay particularly close attention. Social media managers. Financial advisors promoting their businesses. Wealth management advisors, and public companies sharing investment and financial information business lead should be hyper-aware of rules to avoid potential infractions. How to Use UTM
But even an enthusiastic Lindsay Lohan can get into trouble for promoting stocks without disclosing that she received compensation to do so. No one is safe.
To make sure everyone is communicating about investments with fairness and transparency, the SEC has established marketing rules regarding what you can and cannot do on social media platforms.
SEC rules for social media How to Use UTM
Make misleading statements: It is prohibited to make false or misleading statements about a company’s financial condition, performance, or future prospects. For instance, tweeting a lie that your car-manufacturing company is about to put out a flying car would be a real no-no.
Share insider information: Sharing non-public, material information that could influence investment decisions is strictly prohibited. For instance, if you know you’re about to fire your whole executive team. Don’t announce it on LinkedIn B2C phone List first. That’s information that could give your followers an unfair heads-up that they should dump their stock.
Engage in manipulative practices: Engaging in manipulative practices to artificially inflate or deflate securities prices is illegal. For instance, practicing what’s called a “pump and dump” scheme: colluding with your friends to really hype up an. New cryptocurrency called “Barbiecoin” so that everybody else buys it too. And you can then sell it for more than its actual worth.
