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Unlike the days when insider trading was limited to using an anonymous pay phone booth or creating code words for secret communication, today's social media networks have created a new sphere for financial insiders to engage in stealth activities. And it's making the
Mary Schapiro told reporters at a Christian Science Monitor breakfast Wednesday that the popularity and simpliciity of social media makes insider trading easier and more accessible than ever before.
"There is so much that is great about social media, but it does create challenges for regulators," Schapiro says.
Schapiro explained the
Today, the challenge is even greater with sites like Twitter,
"The incredibly low cost and ease of reaching millions of people through social media creates opportunities for mischief, without question," Schapiro says.
Another hurdle for the
"Because we are very reliant when we do investigations on documentation, on E-mails, on telephone calls that might be taped by trading desks or by others, to the extent some of this is very ephemeral, it makes it harder to build cases," Shapiro says.
It can be difficult to access social media accounts for the purpose of investigations. While the government can subpoena social media sites to examine who is behind a particular tweet or message, various groups, including the
Investing - Facebook and Twitter Cause Insider Trading Headaches for the SEC