Employer Accountable for Employee Social Media

Alyssa L. Levy

In the matter of MML Investors Services, LLC, an employee “ran rampant on his personal social media,” but the company is the one taking the rap for failure to supervise its employee.

The company’s employees, as registered broker-dealer agents, were subject to certain regulatory supervision requirements, and the company was responsible for ensuring its employees’ compliance. The Massachusetts Securities Division (the “Division”) accused the company of failing to supervise properly by “fail[ing] to have reasonable policies and procedures in place to detect and monitor” an employee’s use of his personal social media.

The company did have policies and procedures prohibiting its broker-dealer agents from discussing generic securities and company business on social media, including YouTube and Twitter. This employee, however, posted 250 hours of YouTube videos detailing investment strategies, at least 590 securities-related Twitter tweets, and a similar volume of posts on other personal social media accounts, all concerning securities-related information.  He nearly exclusively discussed, analyzed, and promoted GameStop, a meme stock disrupted by individuals’ social media promotion. The Division believed the company should have discovered this employee’s extensive social media activity through its supervisory policies.

The Division’s investigation into this employer for the personal social media activity of its employee invites the question – when are employers, in any industry, responsible for employees’ personal social media?

This employee’s social media activity did not disclose company information, nor did his posts represent the company—he never mentioned the company’s name, or his own for that matter—but still, his actions were imputed to the company because of his employment there. Other than to comply with laws and regulatory requirements, the lesson for all employers is to scale their social media policy and its enforcement to the specific needs of their industry.  In some instances, an employer may be held responsible for employees’ actions and statements, even when made off the clock and through their personal social media.