Key takeaways:

• On January 4, 2012, the Office of Compliance Inspections and Examinations (“OCIE”) of the Securities and Exchange Commission (the “SEC”) released a National Examination Risk Alert on Investment Adviser Use of Social Media (the “Risk Alert”), which addresses the use by registered investment advisory firms of social media.
• The Risk Alert serves as a reminder that a registered investment adviser’s use of social media must comply with, among other things, the antifraud, compliance and recordkeeping provisions of the Federal securities laws, including, in particular, the Investment Advisers Act of 1940, and sets forth factors that the SEC staff believes that an investment adviser may wish to consider in complying with such obligations.
• Registered investment advisers, including private fund managers, and advisers exempt from registration (including private equity advisers that are exempt reporting advisers), should evaluate the extent to which they, or their employees, utilize social media and develop appropriate policies and procedures to control its use.