Recent problems with the financial system could be used as a reason for regulators to have authority policing social networking sites like Facebook and other types of electronic communication like text messaging. If Financial Industry Regulatory Authority (FINRA) CEO Richard Ketchum has his way, that's exactly what will happen.
Ketchum appeared on CNBC's Oct. 27 "Closing Bell" in an interview with the network's NYSE floor reporter Bob Pisani from the Securities Industry and Financial Markets Association (SIFMA) annual meeting in New York City. Ketchum explained how the Internet and text messaging are unconventional means of communication that pose problems for regulators.
"With all of our kids, they don't talk by phones or certainly directly to each other anymore," Ketchum said. "They talk through the Internet and they talk through text messaging and they talk through Facebook."
FINRA is the largest independent regulator for all securities firms in the United States and is over 4,800 brokerage firms that consist of 172,000 branch offices, according to CNBC. The National Association of Securities Dealers "merged in 2007 with the New York Stock Exchange's regulatory arm," according to USA Today to form FINRA.
As Ketchum explained, the problem social networking technologies cause for regulators like FINRA is they provide no audit trail.
"There are great problems from a regulatory standpoint now if that's being used as a sale's tool because there's not a good audit trail," Ketchum said. "We got to get there."
As Pisani explained, brokers are using Facebook to pitch financial products and therefore needed to be looked at that from a regulatory point of view.
"We got to have a good audit trail - that the firms have to have it for a compliance standpoint," Ketchum continued. "Many of them prohibit their reps from using it now, but you know the reality is that's how everybody communicates. What you've got to do is get the information, not prohibit it. It will never work."
Editor at Large
Comments Policy
Wow
October 27, 2009 - 17:41 ET by shawn228That is pure communism.
"I think we're kindred spirits."~Mr Shy to Sergeant ROCK
→ Shawn228
October 27, 2009 - 17:48 ET by Cool ArrowLook beyond it to the realm of possibilities for insider trading.
LYDSEXICS UNTIE!
You think THIS is bad??
October 27, 2009 - 18:08 ET by TailgunnerWait until Obamacare comes up against a new, breakthrough, innovative, lifesaving drug, device, or procedure that 'poses problems for regulators'.
As GUN CONTROL has nothing to do with GUNS, so HEALTH CONTROL has nothing to do with HEALTH.
Tyranny is rarely felt save by those who OPPOSE it. (unknown)
So, instead of fixing they'er problems
October 27, 2009 - 18:38 ET by general companyHe feels it would be much better to steal our liberty. What a smart guy, why didnt I think of it, good grief.
My Gov. thinks I am dangerous, so be careful
"Television is a freak show" Bernie Goldberg
Amen to that one... soon
October 27, 2009 - 17:48 ET by jkwtradingAmen to that one...
soon he will regulate toilet paper usage..
Am I missing somethng?
October 27, 2009 - 18:20 ET by CO2MakerWhat "audit trail" does a telephone conversation leave?
→ Name and Number
October 27, 2009 - 18:27 ET by Cool ArrowWhich can be pulled via subpoena.
I suppose the same can be done with texting. My only concern is trading floor secrets.
But the real fun happens with computer spam in the penny stocks. I must admit I have lots of fun playing the Pennies. Beats the heck out of Horses or Blackjack.
LYDSEXICS UNTIE!
A big one
October 27, 2009 - 18:42 ET by BlueCat57If it is made from the broker's office it is probably recorded these days.
At the very least they can show that sales rep x called friend y and friend y bought stock z just before it doubled.
→ Yes
October 27, 2009 - 18:48 ET by Cool ArrowBut I was under the impression texts could be sent to several people simultaneously.
I know the wild swings I see in the pennies over the net make for an interesting ride, with stocks doubling and halving in minutes.
Right now it's the wild west. Lots of fun as long as it's not the rent money.
LYDSEXICS UNTIE!
I don't understand something
October 27, 2009 - 18:25 ET by jon_torlinI don't know how many members on this blog are from socialist countries or America-soon-to-be-socialist, but in those countries, are your lives regulated like this? And if so, does this drive you crazy or are you just used to it as being another day in the life of a controlled life?
Personally just reading about what they want to do is just driving me crazy and it's one damn thing after another, don't eat meat, don't workout or you will exhale too much CO2, don't do this, don't do that, do it this way(even though it's poisonous and can cause harm-underlying problem), and on and on, and I just want to tell these idiots to leave me the hell alone and let me live my life how I want to! And if they don't leave me alone, I'll smack the crap out of them!
How does anyone put up with that crap without wanting to fight back?
And when will they run out of things that start with "don't"? Ugh!
-Jon
Limits
October 27, 2009 - 18:36 ET by srqvetJon,
Please don't post for 10 minutes! You have surpassed your hourly allotment of computer message board posting time. However, should you want more time, the system would be happy take time from another poster who the system deems less worthy. /sarc off.
Agree with you. It's getting very nutty. Never thought this possible in America.
serious question though
October 27, 2009 - 18:48 ET by jon_torlinYeah, it's been ten minutes...I know, I know, it was a joke.
I am serious about what I asked, I hope I get a response to my question, not being sarcastic about it at all, because honestly, I don't have any way to relate to this kind of stuff going on.
The only way I know something close to it is from some of the people I know from other countries like the UK, India, and Canada. That's it. And in their cases, once they got a taste of what we have here, they don't want to go back, except to visit family. I do know someone from Denmark and that one wants us to be like that country....guess what....it's got the same thing as the UK and Canada. That was the one that was proud of Obeyme getting the Nobel, go figure.
So again, how do people live like this?
-Jon
Jon
October 27, 2009 - 19:08 ET by srqvetI can only speak of Italy and Germany. In southern Italy lying is a respected art. Lying is needed to get around crushing rules and taxes. In Naples in the late 1980s the police had to go out and round up nurses. You see, the nurses were being paid by the government and they received the same amount of pay whether they reported to work or not. Over time, more and more nurses quit going to work. The Italian Army officers I knew had to pay the doctors and staff extra money to make sure their family member received adequate care in the hosptial. Loved the Italian people, was not fond of what their socialist system did to them.
Germany was different, but there was a sameness to everything. Beautiful country but homes were out of reach and all but the very well off lived in apartments. Of course, they are not as vast as the U.S. and land is at a premium. There was a VAT on everything of 17 percent.
Friends in the UK thought it laughable (again in the late 1980s) that the government had trucks with electronic equipment prowling the neighborhoods to catch people who might be receiving a TV signal without paying the broadcast taxes. Ouch!
It's not a pretty picture and we seem to be headed left of these folks.
Jon_torlin-I haven't been to Denmark
October 27, 2009 - 23:46 ET by ahusserBut my impression would be of a small homogeneous population (approx. 5.5 million) which probably by temperament and rarity would support the diluted socialism and 'mixed economy' of northern europe without much fuss or divisiveness. Racial, regional, religious, ideological and social class differences would seem to be minimal there as compared to here. To force such homogeneity and sameness here would be an impossible task leading to much strife and violence. We are a heterogeneous population of 350 million with warts and all. Controlling our population in the same manner would be a huge, expensive and forceful undertaking inviting civil disorder, strife, economic dislocation, inefficiencies and worse. To think otherwise is wishful thinking.
According to Wiki (I know grain of salt):
"Denmark, with a mixed market capitalist economy and a large welfare state,[4] ranks according to one measure, as having the world's highest level of income equality. Denmark has the best business climate in the world, according to the US business magazine Forbes.[5] From 2006 to 2008, surveys[6] ranked Denmark as "the happiest place in the world," based on standards of health, welfare, and education. The 2009 Global Peace Index survey ranks Denmark as the second most peaceful country in the world, after New Zealand.[7] Denmark was also ranked as the least corrupt country in the world in the 2008 Corruption Perceptions Index,[8] sharing a top position with Sweden and New Zealand."
I guess it would be a 'nice' clean and pleasant place to visit and maybe live but to emulate and implement this fairy tale state in this country would be a disaster.
"Somehow, I told you so, just doesn't quite say it." Will Smith in 'I, Robot.'
Not an answer Jon
October 27, 2009 - 19:17 ET by general companyAnd if they don't leave me alone, I'll smack the crap out of them!
But dont feel like the Lone Ranger. Fight back by turning anyone you can, dont waste much time on the loons though, they bleed energy.
My Gov. thinks I am dangerous, so be careful
"Television is a freak show" Bernie Goldberg
not alone but not alot either
October 27, 2009 - 20:23 ET by jon_torlinSometimes I feel like I'm in the minority, depending on the situation. I won't waste time on the loons, those are the ones I wanna smack. And I don't mean the "b!tch-slap" kind either. ;-)
Really, I'm not a violent guy, but I don't like taking a whole lotta crap either. It's how I get things done at work and my boss likes that about me. Don't have time for politics, if something needs to get done, it gets done.(unlike our "Commander in Chief," ar ar ar!)
-Jon
...and the control begins
October 27, 2009 - 18:32 ET by bigtimer...and the control begins with the internet.
We all know about elsewhere.
The FCC vote last week I think it was was the start with this administration.
We knew it was coming...and it's arrived.
'Doubling down on stupid is not a particularly good idea'~Breitbart
I don't get what kind of
October 27, 2009 - 18:34 ET by Radical1979I don't get what kind of trail this guy is talking about. The money trail will still be there. If he's worried about what's being said for selling purposes there's never a trail from a conversation. That's why legitimate business transactions all have paper behind them.
I also notice all this kind of regulation of the internet is never applicable when it comes to pornography. I'm not saying it should be regulated, I'm saying when that subject comes up privacy is suddenly a big issue.
Confusing Article
October 27, 2009 - 18:47 ET by BlueCat57The article isn't well written and is indeed confusing. Sometimes I wish NB took a little more time editing and rewriting their posts.
The trail he is talking about is the audit trail now needed to CYA everyone's *. And social networking sites don't provide the sort of trail that is easily followed.
The difference between pornography and stock trading is that the profits from stock trading are filthy lucre to liberals. What right does anyone have to cheat and get rich? The profits from pornography are hard earned (pun intended) and artistic. Therefore they are "good."
Thanks BlueCat. That
October 27, 2009 - 18:54 ET by Radical1979Thanks BlueCat. That explains why Roman Polanski = good and Bernie Madoff = evil. I keep forgetting politicians and Hollywood people are the only ones allowed to get rich.
Yes, they do.
October 28, 2009 - 11:00 ET by CobraMan"And social networking sites don't provide the sort of trail that is easily followed."
Yes, they do, aseveryone's IP's and MAC addresses (equivalent to your address and phone number) is recorded and stored by all the social networking sites every time you visit them.
Also, the "home pages" of the people using those sites are archived and saved and are available to law enforcement, provided they have a valid warrant of course. Even changes are saved, as is the messages people can leave at any given page.
The "paper trail" is there, and is availabe to law enforcment, which is why pedophiles, for example, get arrested for using sites like that for sharing illegal porn. If traders were usinf sites like this for illegal trading pratices, law enforcement can retreve all that stored data and use it to arrest them.
The same is true for your internet provider. They too, store your mac address every time you use their services, along with how much time you spent on line. Thees are all available to anyone with a valid warrant.
The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States.
The US Constitution
Unless you're a fetus.
The US Supreme Court
Are We Being Played?
October 27, 2009 - 18:42 ET by srqvetSeems to me the healthcare debate is the shiny bell the commies are having us play with as they assault the constitution behind the closed doors of agencies. Not an original thought, but believe it bears repeating from time to time.
So wait. Now we care about
October 27, 2009 - 18:44 ET by Another Dead KennedySo wait. Now we care about the government monitoring our communications without our knowledge? Seriously, dear government, just say it's all in the name of national security and we'll look the other way...again.
xoxo - Ted
→ Ted
October 27, 2009 - 18:50 ET by Cool ArrowIt's not as though insider trading laws are a new thing.
The intent follows to new technology just as Electronic Funds Transactions are as binding as a check.
LYDSEXICS UNTIE!
Please, Tex - It's Drupal to
October 27, 2009 - 18:56 ET by Another Dead KennedyPlease, Tex - It's Drupal to you.
Don't you have to wonder how far they'll take it? Make a post on your facebook page and it's automatically cc'd right to the SEC reception desk? Or simple spyware that monitors your every keystroke, regardless of whether or not it's trade-related?
xoxo - Ted
→ Yes, er, Drupal
October 27, 2009 - 19:01 ET by Cool ArrowSorry for confusing you with the artist formerly known as . . .
But there are other opportunities, say, tracfones with text capabilities.
It's my understanding there are disposable phones that aren't traceable.
LYDSEXICS UNTIE!
Make a post on your
October 27, 2009 - 19:31 ET by Radical1979Make a post on your facebook page and it's automatically cc'd right to the SEC reception desk?
Having two teenagers I find this kind of funny. They constantly text and post to Facebook. I'm friends with a couple of my neices and nephews to, and all I can say is this is going to keep a lot of people very busy with a lot of nonsense. Good plan.
Another brilliant solution
October 27, 2009 - 19:14 ET by OneCleverCookieOk, let's just wipe out the 1st Amendment, because people cannot be trusted with financial information. I'd rather close down all the exchanges instead of abolishing the 1st Amedment.
→ OCC
October 27, 2009 - 19:18 ET by Cool ArrowI think what's being addressed here is a need to update current law to keep up with new technology.
I didn't have a problem with the changes made to wiretap law as applied to the terror suspect who changes cellphones, requiring a new wiretap warrant warrant with each phone change.
This comes close to the same situation.
LYDSEXICS UNTIE!
what an excuse
October 27, 2009 - 19:40 ET by goldboughThat's a pretty far-fetched excuse to "watch" everyone like the commies do.
My, My
October 27, 2009 - 19:47 ET by justbob223Can't have any of that unmonitored, unregulated free speech now, can we?
jb.... Not in O/Soros
October 27, 2009 - 19:56 ET by bigtimerjb....
Not in O/Soros World.
'Doubling down on stupid is not a particularly good idea'~Breitbart
Sarah Palin uses Facebook.
October 27, 2009 - 19:59 ET by upcountrywaterGood luck tracking all the TXT in real time, maybe that's where all the millions of jobs are, some 10 million humans reading TXT after TXT...
Just shut it down... soo much easier.
Very easy to rationale, the internet is just extra-curricular, just shutting off the power to google, will save 10,000 trees per second.
State controlled health care is Tort Reform. Update! music video.
This is guy is full of
October 27, 2009 - 21:33 ET by jdhawkThis is guy is full of BS. He is playing on the public's ignorance of what is dutiful and regularly employed at trading houses across the country.
Every trader's and salesperson's conversations and key strokes are recorded, period. In regards to telephone conversations, calls to customers, customers calls to employees, calls between employees and the "squak box" chatter is recorded. Every computer key stroke is recorded whether it is entering a trade, typing a message to a customer via e-mail and/or message texting.
Telephone conversation were the first to be recorded years ago. When e-mail was starting to be used, it was recorded. When text messaging was used, then it was recorded. And so on and so forth. In other words, whatever the medium and it is recorded. If a new medium comes along, it too will be recorded.
This not only protects the customer, but the employee also. It is just good business practice.
If this guy is unaware of this, then he ought not be in the position he is in. I doubt that. He has some ulterior motive in stating this.
jdhawk... He has some
October 27, 2009 - 22:00 ET by bigtimerjdhawk...
He has some ulterior motive in stating this.
I agree.
'Doubling down on stupid is not a particularly good idea'~Breitbart
Not only keystrokes, but, well, everything!
October 28, 2009 - 10:49 ET by CobraManNot only are keystrokes recorded and archived by the Firm's servers, the servers that handle and text messages and sites like Facebook also archive everything. Contrary to his instance that there is no "paper trail," internet communications have the greatest "paper trail" in existence.
Here's what most people don't understand: Everyone's 's IP's and MAC addresses are collected and stored on just about every server in the world, let alone the ones in America. All that is needed is a warrant to find out who's been doing what on the internet, which is how pedophiles are caught sharing illegal porn, for example.
All that is needed to access the electronic "paper trail" is a warrant. I guess this man want's to do away with the warrant requirement and have the government monitor and record every conversation in real time. Which, btw, is something the nutjobs were accusing Bush of doing for the last 8 years.
The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States.
The US Constitution
Unless you're a fetus.
The US Supreme Court
Government snooping
October 28, 2009 - 06:39 ET by Blogger Guy00001The only way they can crack down on Facebook and texting is by monitoring all that goes on. Our corrupt government would give itself the "right" to intercept and examine all messages and postings.
Government already has too much power.
Keep watching kiddies!!
October 28, 2009 - 10:21 ET by Patriot IIThe first and second amendments are what they are intent on destroying.......mark my words, they will start with the internet!!! time for people to wake up and smell the coffee!!!
government would give
October 28, 2009 - 20:07 ET by Dan The Man 2government would give itself the "right" to intercept and examine all messages and postings.
Im sure they do this already, just on the sly. I can see them doing so in the name of national security, but under different Presidents it was nothing to worry about.
"With all of our kids, they
October 28, 2009 - 15:58 ET by RR GOP"With all of our kids, they don't talk by phones or certainly directly to each other anymore,"
Uh, so? They don't have anything important to say anyway. Twenty years from now they'll still be gabbing about who's sleeping with who and rehashing what millionaires did with a ball on TV the night before.
One of the 34% who thinks George W. Bush was a great President. One of the 86% who wants to bring back the stock and pillory.