On January 18, 2011 the Massachusetts Securities Division (the “Division”) issued guidance on the use of social media by investment advisers registered with The Commonwealth of Massachusetts. The release (the full text of which can be found here) is summarized below, and follows similar guidance issued by the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations in an exam alert issued earlier this month (see Foley Adviser of January 13, 2012 on the exam alert).

Use of Social Media Generally

The Division clarifies that the use of social media by advisers does not itself violate Massachusetts investment adviser rules or regulations, but cautions that such outlets may pose new risks of which advisers should be cognizant. Social media allows advisers to reach a greater audience very easily and as a result, the Division warns, the risk of potential regulatory violations is magnified because of the larger audience. The Division notes several specific concerns for adviser, as summarized below.