The Role of Blogging in Financial Communications

For PR and IR professionals interested in the role of blogging and the social media in financial services, private equity, and investment banking communications, check out the article by Davis D. Janowski in InvestmentNews that addresses the conflicting views of blogging held by financial advisors, the Financial Industry Regulatory Authority (FIRA) and the Securities and Exchange Commission (SEC).

Financial advisors see their blogs as “a harmless, inexpensive technology” that facilitates communication with their clients. FIRA views blogs as ads that require supervisory review. And the SEC contends that blogs should be treated as a company statement.

The bottom line? To avoid compliance problems, be aware of what you are saying in your blog. Keep your communications general and avoid mentioning specific transactions, products or equities by name. For more information, check out these links:

• Certified Financial Planner Board of Standards’ recently updated Standards of Professional Conduct
• “FINRA Provides Guidance Regarding the Review and Supervision of Electronic Communications”

• The SEC’s “Commission Guidance on the Use of Company Web Sites”

The Court Rules in Favor of Wikileaks

Last week, Federal Judge Jeffrey S. White withdrew his earlier order disabling Wikileaks, a website that allows the anonymous posting of documents to discourage unethical behavior in governments and corporations. He’d originally shut down the site at the request of Bank Julius Baer & Company, a Swiss banking company that serves the ultra-rich. They charged that Wikileaks had posted confidential information about some of its customers.

Wikileaks is designed to enable whistleblowers to leak documents, without fear of censorship or the risk of the political repercussions. Its founders contend that Wikileaks will “civilize corporations by exposing uncivil plans and behavior. Just like a country, a corrupt or unethical corporation is a menace to all inside and outside it.”

It’s still in its infancy, but Wikileaks is worth a careful look if you’re at all concerned with the possibility of adverse publicity or if you are involved in issues or crisis management.

Only 6% of corporate frauds are revealed by the SEC and 14% by the auditors, according to the Center for Economic Policy Research. More important monitors are media (14%), industry regulators (16%), and employees (19%).

As it develops, it’s likely that Wikileaks will become a useful source for the mainstream media … so it’s worth keeping it on your radar.