Recall back in April when a Twitter hoax claimed President Obama was injured in an explosion at the White House. The report caused the Dow Jones Industrial Average to plummet 150 points within about three minutes, erasing $136 billion in market value. Although the tweet that read “Breaking: Two explosions in the White House and Barack Obama is injured” appeared to be a news alert from the Associated Press, it was immediately confirmed to be fake.

The markets recovered within minutes, but the event left the industry vulnerable. A notable concern was the complexity and deluge of safety threats in the social media age. Those who were deeply skeptical questioned whether Twitter feeds or Facebook pages should serve as potential outlets for announcements.

The Twitter hoax occurred on the heels of new U.S. Securities and Exchange Commission (SEC) regulations that allow executives to post, blog or tweet market-moving news or disseminate non-public information, provided they meet certain requirements. Effectively, the SEC decision legitimizes social media as outlets for communication, as long as investors have been advised which platforms will be used to disseminate that information.

True to form, Canadians are more cautious, and regulators here have not formally addressed issuer disclosure through social media. (Canadian principles governing selective disclosure are set out in National Policy 51-201: Disclosure Standards.)

But perhaps they should.

Standard Life’s Robert Boyer, who reports on how fraudsters use innovative ways to breach information networks (“Is It Safe?”), writes in a separate note that companies ought to monitor social media information sources. “Twitter gives a real-time picture of investor sentiment and reaction to major events…. But authenticity, credibility, disclosure and compliance remain concerns for the investment industry.” Also in this issue, our Tech Roundup 2013 (“Let the Games Begin”) proves that the trend to embrace new media with multiple platforms such as smartphone and tablet apps for showcasing online presence, educating, training and delivering technical information won’t let up. Smartphone use is up to 47% from 34% last year, while tablet use has jumped to 21% from 10%, according to Ipsos Reid.

Late adopters of social media might want to consider the impact of not following the online mainstream—provided, of course, they also establish appropriate security policies and procedures.

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