Banning access by investment industry employers to employee social media sites will make it difficult for regulators to supervise them says the Securities Industry and Financial Markets Association (SIFMA). The organization is encouraging California Governor Jerry Brown to veto the legislation.
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The law would prevent employers from requiring disclosure of employee passwords to their social media sites. SIFMA says that the industry has no interest in accessing sites strictly limited to personal use. The line is crossed when people use those sites for both personal and business activities.
Many firms currently ask employees to verify that they do not use social media sites for business purposes. The problem comes into play if employees are dishonest in their disclosures.
Maryland was the first state to pass a law banning access. The law goes into effect in October. Illinois has also passed such legislation and bills are pending in New York, Delaware, Massachusetts, and Minnesota, among others.
The Financial Industry Regulatory Authority (FIRA) says such laws interfere with the duty
of securities firms to supervise, control, and maintain business-related communications records.
What’s your opinion? Can the industry sufficiently supervise participants without the disclosure of social media site passwords? Do you have a better solution?