Smarsh Helps Firms Identify and Fill Social Media Compliance Gaps

- One year after FINRA guidance on social networking, firms using Smarsh archiving solutions to overcome challenges -

Portland, Ore., Jan. 25, 2011 - One year ago today, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 10-06 as compliance guidance for registered firms' use of blogs and social networking websites like Facebook, LinkedIn and Twitter. Smarsh®, the managed service leader in secure, innovative and reliable email archiving and compliance solutions, was the first to integrate social media into its archiving platform two years ago, and provides customers with comprehensive and flexible options to address compliance concerns amidst an evolving communications landscape.

"We're seeing a significant and growing number of customers adopt our social media compliance solutions, but there are still many companies that prohibit social media to avoid the perceived complexities of compliance," said Stephen Marsh, CEO and founder of Smarsh. "By attempting to prohibit social media, firms are both ignoring its tremendous business benefits and facing increased risk by failing to recognize that their employees are likely using these tools in some form."

Scrutiny of Social Media Usage on the Rise

Regulatory enforcement is expected to increase over the next year. Sweep letters issued from the SEC suggest further scrutiny of social media, and FINRA is increasingly requesting information about social media usage and oversight during examinations. Firms like Maxwell Noll Investment Advisors, a Pasadena, Calif.-based money management firm, are now ahead of the curve, examining employee' social media usage and determining whether policies are being violated.

"During a FINRA examination last year, we learned that our policy prohibiting usage of social media had been violated. It was an eye-opening experience, where we realized that banning social media in today's world is nearly impossible," said Chris Saccente, vice president and chief compliance officer at Maxwell Noll Investment Advisors. "We reached out to Smarsh, our email archiving provider, and were able to quickly deploy a solution that met FINRA's compliance demands and dramatically simplified oversight for our team."

"Firms need to take proactive measures, with a clear governance policy and solutions for enforcement," said Marsh. "We're working with customers to remove compliance headaches and to provide simple solutions to meet regulatory requirements."

Smarsh Solutions

Understanding that there is no "one size fits all" solution, Smarsh provides customers with comprehensive and flexible options to meet a variety of deployment preferences. Smarsh offers a tailored suite of hosted electronic message archiving solutions-including email, instant messaging, Bloomberg messaging, social media and text messaging-to fill the SEC and FINRA compliance gap for investment advisers and broker-dealers. Supervision administration for all messaging archives is consolidated in the secure, web-based Smarsh Management Console.

To help organizations understand the rapidly-changing social media platforms and make informed decisions about compliance and mitigating organizational risk, Smarsh has compiled a series of complimentary resources available at www.Smarsh.com/Social-Media-Archiving.

About Smarsh

Smarsh® provides hosted solutions for archiving electronic communications, including email, instant messaging and social media platforms such as Facebook, LinkedIn and Twitter. Founded in 2001, Smarsh helps more than 10,000 organizations manage and enforce flexible, secure and cost-effective compliance and records retention strategies. For more information, visit www.Smarsh.com or follow Smarsh at www.twitter.com/SmarshInc.

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