[author: Trevor Starer]

The use of social media raises many securities law and compliance challenges for issuers, broker-dealers, and investment advisers. This Compliance Guide summarizes briefly some key principles.

GUIDANCE FOR ISSUERS -

REGULATION FD -

In 2000, the Securities and Exchange Commission (the “SEC”) adopted Regulation Fair Disclosure (“Regulation FD”) in order to address concerns relating to selective disclosure and to promote full and fair disclosure. In its Regulation FD adopting release, the SEC noted that selective disclosure of information bore a close resemblance to insider trading, giving a privileged few an informational edge and the ability to use that benefit at the expense of others. This unfair advantage, the SEC noted, might lead to a loss of confidence in the integrity of the capital markets. Regulation FD requires that when an issuer, or a person acting on its behalf, discloses material nonpublic information to certain enumerated persons, such as securities market professionals, where it is reasonably foreseeable that they will trade on the basis of the information, the issuer must distribute that information in a manner reasonably designed to achieve effective broad and non-exclusionary distribution to the public. An issuer must make material nonpublic information available to the public contemporaneously if such information is intentionally disclosed or promptly if such material nonpublic information is unintentionally disclosed...