SEC guidelines regulate testimonials via social media

Crowe’s Tara LaClair discusses recently published guideline involving social media and investments.
by Paula Burkes Modified: June 26, 2014 at 10:00 am •  Published: June 25, 2014
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Q&A with Tara LaClair

Federal SEC guidelines regulate

testimonials via social media

Q: The U.S. Securities and Exchange Commission recently published a guidance update regarding the testimonial rule and social media. What are the details?

A: Under The Investment Advisers Act of 1940, the so-called testimonial rule prohibits advisers from publishing, circulating or distributing any advertisement that refers to or contains a testimonial concerning a financial adviser or the services rendered by a financial advisor. While the SEC hasn’t defined the term testimonial in any rule, it consistently has been interpreted to mean a statement of a client’s experience with, or endorsement of, an investment adviser. The SEC’s recent guidance update primarily was released to clarify whether or under what circumstances a financial adviser can publish a testimonial written about them on a third party social media site.


by Paula Burkes
Reporter
A 1981 journalism graduate of Oklahoma State University, Paula Burkes has more than 30 years experience writing and editing award-winning material for newspapers and healthcare, educational and telecommunications institutions in Tulsa, Oklahoma...
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