September 15, 2019

You’re being watched

Be Careful What You Tweet, Mary Schapiro Might Be Watching

We’ve considered why your firm might want a social media policy in the past but it’s clear now that it’s not only wise to keep employees in check but to keep the SEC from breathing down everyone’s necks.

Regulation FD (fair disclosure) is meant to prevent selective disclosure by issuers of materialon and insider trading liability in connection with a trader’s “use” or “knowing possession” of material nonpublic information. The rules are designed to promote the full and fair disclosure of information by issuers, and to clarify and enhance existing prohibitions against insider trading.


Without a social media policy, any employee of the company tweeting or blogging about company events could broadly be assumed to be company communications. Whether or not these people are officially representing the company or not is irrelevant; selective disclosure could be as simple as a poorly-timed post about a company secret (i.e. “our awesome new product will be released in two weeks!”) on an employee’s Facebook page, which is public but limited to the employee’s 100 or so family and friends. In theory, an astute friend could take this as a buy signal, knowing X product will cause quite a storm once it hits the market. Welcome to insider trading: social media edition. Notice here that the intention is not what is important but rather the event itself. The SEC doesn’t care if the employee meant to pump up his or her employer’s stock but rather that the employee chose to selectively disclose information not readily available to the public that the employee is privy to to a limited group of people.

How far could the SEC take this?

The SEC’s guidance set forth three considerations to help determine whether information posted on corporate websites is considered “public.”

* Whether a company’s Web site is a recognized channel of distribution;
* Whether information is posted and accessible, and therefore disseminated in a manner calculated to reach investors; and
* Whether information is posted for a reasonable period so that it has been absorbed by investors.

The guidance goes on to clarify that statements made on blogs or other interactive websites are subject to the anti-fraud provisions of the federal securities laws, and companies cannot require investors to waive protections under the federal securities laws as a condition of using such interactive websites.

The only control companies have in this is to have a very clear, intelligent social media policy that either limits or forbids disclosure of non-public information through blogs and social media. This isn’t new (this interpretation was released in August of 2008) but what is new is the rumor that the SEC is beginning to send deficiency letters to registered investment advisers it examines, specifically those who do not have a social media policy in place.

A document request list sent by the SEC to some advisers asks for a broad range of data related to social media use, according to a compliance alert from ACA Compliance Group. Among other things, the SEC is seeking to identify how often advisers use social media websites such as Facebook, Twitter, LinkedIn, YouTube, Flickr, MySpace, Digg, Redditt, as well as any blogs used by, or subscribed to, by the adviser. They are also looking at communications made by, or received by an adviser on any social media website including among others, blog postings, messages, and/or tweets.

According to the WSJ, an SEC spokesman declined to comment on the deficiency letters. However, an SEC official said at a compliance conference last month that misuse of social media is an issue on their radar in SEC examinations and enforcement. Misuse being defined as investment advisers who fake information on their LinkedIn profiles to buff up their appearance to investors.

Doing It Right: Not Acting Like an Ass on the Internet

We’ve given you plenty of tips on how not to be an ass on the Internet (sometimes causing you to get pissy with the messenger for calling you out) and also plenty of examples of those who do it wrong (some really, really wrong). So it was thrilling to see the AICPA’s This Way to CPA site take on bad behavior for job-seekers with some of the same tips we’ve been throwing out there all along in Remember your dignity (please). We were especially into this one about acting like an unrefined dolt:

THE BIGGEST DON’T OF ALL

Blab stuff online you can’t take back. It happens. From the typical drunk pic on the Facebook page to the more serious crimes like tweeting the salary you just got offered (especially smooth when the people who already work there see it and instantly pity/hate you), social media blunders are as common as they are hilarious. You heard about the girl who slammed her boss in a status update, then was reminded – by him – that she’d friended him already, right?

Social Media Manager Angela Connor has a simple suggestion to protect yourself against this kind of public blunder. “I don’t care what your privacy settings say; don’t assume anything is private.” This is, of course, the Internet we’re talking about. It’s just too easy for incriminating pictures, swear-packed rants and outright whining about your current job to slip out and become public knowledge.

Surely they aren’t referring to the sort of swear-packed rants that are a mainstay over at Jr Deputy Accountant because, well, let’s face it, that potty mouth nailed me this sweet Going Concern gig.

But if I were to go job hunting tomorrow, my big fat angry mouth would be all over the place ripping on Federal Reserve presidents and verbally bitch-slapping ne’er-do-well Congressmen and most employers aren’t so into that sort of behavior. So let this be yet one more reminder that in this day and age everything you do on the Internet can come back to bite you.

Like that Russian skin flick Caleb made in the early 00s. Google it.

Oh, and can someone please clarify “typical drunken pic on Facebook” for me? I’ve seen plenty of said drunken Facebook pics in my day and am not quite clear on what would qualify as “typical”. Anyone?

Just One More Reason To Not Act Like an Idiot on the Internet

Federal officials are looking for “easier” rules that would allow for wiretapping of Internet-based services since no one uses their phones anymore, says the NYT.

The FBI, DoJ, NSA and White House officials have been meeting for awhile now to come up with a way around the everyone ditching their phones problem. Spying on someone gets hard when they’re doing all their dirty business on Skype I’m sure. Can you show me any criminals that actually do that?

If things go the way the in-the-dark could mean requiring communication providers to provide access to encrypted interactions using common platforms like BlackBerry and Facebook. While it’s unlikely that any of you will become subject of a federal wiretap warrant, just opening this door means a critical component of our online security has been compromised.


Monitoring services and firms already watch the conversation (look at Cyveillance, for example) and if you brag about all your unreported income on Twitter (e.g. “Fuck 1099s, I haven’t filed a return in five years and those idiots at the @IRS will never find me!”), chances are you’ll get busted so we know TPTB are watching but what happens when they can force their way through encryption? It’s one thing to open yourself up to litigation by being stupid enough to say you’re going to blow up an airport in 140 characters or less but you should be able to make inappropriate comments in the privacy of your own Facebook outbox.

Since when do drug cartels use Facebook to arrange their deals?

Regardless of where this proposition goes the reality is that we’ve already pretty much given our information up (and do, consistently – see also “Sign in using Facebook” buttons that you guys are probably constantly pressing out of laziness) so one more step can’t really be the end of the world for individual privacy, right?

All the more reason to tighten up your personal Internet security in the meantime, which means not using your full name for stuff and refraining from threatening to stab the senior while at the client’s. You know who you are.

Pleasing the Accountants, Road Trip Style

Receipts.jpgEditor’s Note: Want more JDA? You can see all of her posts for GC here, her blog here and stalk her on Twitter.
NYT had a piece yesterday called “Paying With Plastic to Please the Accountants” and I have to admit at first glance, the title annoyed the shit out of me. The accountants don’t care what you use when expensing your stupid airport Starbucks and car rentals, all they want is to be left alone to decode your receipts in peace. At least mine does.
But it isn’t just the accountants. Apparently your expenses are of extra importance to the IRS – though we’ll save the wild speculation that might dictate Timmy the Tax Cheat is just really hard up for some revenues (especially after that $38 billion tax break he gave Citigroup without anyone’s permission).

The I.R.S. is engaged in an initiative to audit tax returns of about 6,000 companies, partly to look at executive fringe benefits, including travel-expense procedures. This takes place as companies are already struggling to get a better handle on overall travel and entertainment management, especially as business travel picks up in a still shaky economic environment.

The article goes on to talk about extra airline fees (I won’t bitch about the $40 I just had to pay to check a suitcase on a recent Chicago trip) and makes expense reports sound like financial statements. The IRS apparently doesn’t care about receipts for charges under $75 while most companies use $25 as their receipt required limit. Is a $4 airport latté material? Maybe not. Are 25 dinners between $20 and $24? You bet your sweet little bean-counting ass.
I will go ahead and state the obvious here because sometimes I feel like you rubes need a BIG SIGN: in this economy, companies can no longer afford the jetsetting of yore, and why the hell should they? With video conferencing, email, mobile productivity and social networking helping to bring an entirely new meaning to collaboration, all of that cross country crap is no longer as critical as it once was. And so go the $4 airport lattés and bad $15 dinner tabs with it.
So remember, kids, keep your receipts, Timmy might want to run some substantive tests on your company rental cars and client dinners on the road. God forbid he not get a piece.

PwC Is Here to Remind You that Someone Is Watching Your Utilization

scrutiny.jpgEarlier this month, we mentioned a rumor we heard about PwC putting in calls to the rank in and file of one industry group in the tax practice. The caller was just letting them know that their utilization was getting the crook eye by the partner in charge of the group. Not exactly something that would give you the warm and fuzzies Well, now have another report of P. Dubs putting people on notice:

I was recently informed that despite my good performance and strong mid-year reviews, “[my] utilization is being watched.” Its nice to know that this company values cold metrics as opposed to quality, hardworking employees.

Here’s a question: who at PwC thought that notifying employees that their utilization is being scrutinized was a good idea? Especially since Bob Mortiz sent an email to say that it’s unlikely that there will be layoffs in tax and assurance?
One email says “don’t worry, everything is fine” while someone else calls you up in order to scare the bejesus out of you by letting you know that despite your fine performance someone is watching. Can anyone explain the rationale? Our emails to PwC have gone unreturned, so we’re all ears.