The Financial Industry Regulatory Authority (FINRA) recently issued Regulatory Notice 10-06 regarding the use of blogs and social networking websites such as Facebook, Twitter, and LinkedIn by brokers to communicate with the public. The Notice makes clear that the use of such “Web 2.0” tools is subject to applicable federal securities laws and self-regulatory organization (SRO) rules, including the supervision, suitability, and record retention rules. The stated goal of the Notice is to ensure that investors are protected from false or misleading claims and representations made by associated persons (i.e., brokers), and to ensure that firms are effectively and appropriately supervising their associated persons’ participation in these sites. At the outset, the Notice makes clear that it is only aimed at the use by a firm or its personnel of social media sites for business purposes; the Notice does not apply to purely personal use.One of the major issues addressed by the Notice is communications which can be regarded as “recommendations.” If a broker recommends a specific investment or product to a client, the broker and firm must ensure that the recommendation is suitable for the client. Any mass or publicly available communication which could be regarded as a recommendation raises a problem in terms of suitability. It is extremely difficult to ensure that it is suitable for each and every client who might view the recommendation.With the increasing use of social media websites for business communications, compliance issues related to their use will surely become more important. Record retention is likely to be a major compliance problem. FINRA acknowledges that adequate technology to keep records of communications made through social media sites may not even exist. FINRA has provided regulatory guidance on web communications before; in 2007, FINRA issued Regulatory Notice 07-59 aimed at electronic communications (emails and text messages) and FINRA has also published a “Guide to the Internet for Registered Representatives.” This latest Notice recognizes the continuing evolution in social media in an increasingly connected world. With each advance in technology, new compliance concerns will crop up, requiring further guidance from FINRA.