Making Money the Modern Way - Tweeting: How FINRA's Regulatory Guidance May Help Clear the Way for Social Media Communications

I. Introduction In 1979, Smith Barney ran a now-iconic advertising campaign proclaiming, "[we] make money the old fashioned way[,] [we] earn it." 1 Over thirty years later, the firm's successor, Morgan Stanley Smith Barney, has announced a plan to allow its financial advisors to make money the modern way - by "tweeting." 2 Morgan Stanley is implementing a program that will enable its more than 17,000 financial advisors to communicate with the public through selected social media platforms, including LinkedIn 3 and Twitter. 4 This will mark the first time a major wealth management firm has allowed its financial advisors to utilize Twitter. 5 Morgan Stanley believes that its wealth management division's first-mover status in adopting this new initiative will provide its advisors with a "significant competitive advantage" in marketing as well as "sharing the firm's intellectual content" with its clients. 6 Despite the rapid and widespread adoption of social media platforms by much of the business community, 7 financial professionals have been hesitant to fully enter the social media fray, largely because of regulatory worries. 8 Having received little guidance in the past from the Financial Regulatory Authority ("FINRA") 9 or the Securities and Exchange Commission ("SEC") 10 on how new technologies fit within existing securities laws and regulations, 11 financial services firms have been concerned about the potential exposure to violations of securities laws. 12 Potential legal and regulatory risks include violations of rules relating to record keeping, 13 communication with the public, 14