Regulatory concerns and social media

I recently read "Social Media and FINRA: Twitter and LinkedIn Considerations," a report from the Burton Group that talks about the regulatory issues that businesses may run into when their employees use either Twitter or LinkedIn. These issues are all related to FINRA's Regulatory Notice 10-06, "Guidance on Blogs and Social Networking Web Sites."

I'm certainly not an expert on the details of FINRA's guidance, but some of the conclusions of this report made me question whether or not some of the ways in which securities firms are regulated really make sense.

According to this report, for example, a securities firm may get into trouble with regulators if one of their employees has selected "Business deals" as one of the things that they're open to receiving messages about through LinkedIn. Providing recommendations for other people on LinkedIn can also apparently get you in trouble with regulators. The report lists several other examples, none of which made any sense to me at all.

So it if assume that the Burton Group's analysis is correct, which seems like a reasonable assumption, it certainly seems to me that the way in which the securities industry is regulated doesn't make much sense. And because it looks like we'll probably see more regulation of that industry in the future, I'd expect things to get much worse before they get any better