The Financial Industry Regulatory Authority, an independent U.S. securities regulator that seeks to protect investors, is asking lawmakers in around 10 states to amend their legislation to allow financial firms to peak at social media accounts when employee misuse is suspected, a spokesperson told the Wall Street Journal.
The fear seems to be that brokers could use their social media accounts to spread information that would influence stocks, and that misdeeds would go unchecked without monitoring allowances.
At least six states including California, Illinois, New Jersey, and Delware have passed legislation to prohibit employers from requiring an employee or applicant to hand over social media account usernames and passwords. Some 35 states have started considering adopting similar social-media legislation since the beginning of the year, according to the Journal.
California, at least, doesn't appear to be budging on its stance to protect all state employees from social-media invasions of privacy. State lawmakers have rejected FINRA's and others' request for special allowances, the Journal said.
Though securities regulators and financial firms may not take kindly being locked out of employee accounts, Wall Street has embraced social media in a different way. Earlier this year, the Securities and Exchange Commission decreed that it was okay for public companies to announce their news on Facebook or Twitter first, so long as investors were told ahead of time where to look for the disclosures.