Back in January, the Securities and Exchange Commission (“SEC”) issued guidance regarding Registered Investment Adviser’s (“RIA’s”) use of social media in a National Examination Alert, Investment Adviser Use of Social Media (the “Alert”). Part of the Alert dealt with third-party content – specifically stating how “likes” and comments from third-parties on social media websites may be interpreted as improper testimonials prohibited by Rule 206(4)-1(a)(1) of the Investment Advisers Act of 1940.
As a result, the SEC suggested that RIA firms develop guidelines that not only account for these occurrences, but also establish periodic, or real-time monitoring to ensure that such “testimonials” are not being made by third-parties. This type of monitoring often required substantial effort on the part of compliance personnel at a firm. For more information on this Alert, please see January’s blog posting for the month entitled “New Guidance for Investment Advisers & Social Media: Should Advisers Dislike Their Likes?”
This week, however, LinkedIn announced that all of these third-party testimonials made at its website can be hidden with a single click of a button. Developers at LinkedIn made changes to the website effecting how owners of a profile can manage endorsements. While the ability to hide individual endorsements and endorsers has been available since the site first launched its “endorsement” aspect of the website, the new feature finally gives the ability to hide all endorsements at once.
While it is debatable whether or not such endorsements need to be hidden – especially in the wake of the court decision In the Matter of Anthony Fields (more on that to come in next week’s blog posting), compliance officers at least have the option now of completely hiding from the public all endorsements that could be construed as improper testimonials.
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