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Bloomberg announced on Tuesday that it had bought up the intellectual property and patents of Netbox Blue, an Australian company that provides social media risk management and compliance services. Netbox Blue's tech will be used as part of Bloomberg Vault, the company's enterprise compliance platform.
Bloomberg Vault's customers are primarily financial services firms and the newly-acquired technology could be used to help them catch an errant tweet, email, or instant message before it lands the company in trouble with the SEC or FINRA.
Growing Need for Social Media Compliance and Surveillance
The spread of social media is increasing business's ability to connect and collaborate every day. But for highly regulated industries, it's also creating new risks that businesses need to take seriously.
In November of 2015, for example, the SEC filed securities fraud charges against a Scottish trader whose tweets tanked two stocks. In 2014, the SEC announced that investment advisors who wrote about a client's experience on social media or in a blog would be in violation of SEC rules. Way back in 2010, the SEC went after two Canadians who used Facebook to pump and dump penny stocks.
Firms need not go so far as to ban social media use altogether, but a vigilant eye is needed to maintain compliance with SEC and FINRA rules.
Monitoring Across Multiple Social Media Channels
Bloomberg's acquisition seeks to accomplish just that. While many in-house compliance programs can flag activities social media site by social media site, Netbox Blue's technology allows companies to "look across multiple social and digital interactions dynamically to detect behavioral patterns," Bloomberg Vault's Harald Collet explained in a release announcing the acquisition.
Netbox Blue's technology will allow users to monitor social media use across many different platforms, including Facebook, Twitter, LinkedIn, Yahoo Messenger, and Skype. Companies that may have previously forbidden social media use can now allow it, while simultaneously "meeting communications surveillance and archiving requirements," according to Bloomberg.
The acquisition also marks a new application of Netbox Blue's technology. The Australian company's primary client base had been in the Australian education sector, according to Legaltech News. Now, instead of monitoring who a twelve-year-old is chatting to online, that tech will be used to babysit bankers instead.