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Disclaimer Link Could Solve Compliance Dilemma for Public Companies Using Twitter

Twitter is increasingly becoming a channel for public companies to communicate with investors but, as Dominic Jones of IR Web Report observes in this post, some of Twitter's inherent limitations create compliance challenges. As Jones notes, public companies' communications to the world are in many instances regulated by the SEC and subject to the federal securities laws. Some communications may require disclaimers or warnings that can't possibly fit within Twitter's 140-character limit, creating a conundrum for companies that want to communicate with investors via Twitter.

Jones suggests that this problem could be resolved if Twitter would tweak its interface to allow for a disclaimer link in the metadata that accompanies each tweet on the Web and the API. He argues that the availability of such a link might encourage many more companies to begin using Twitter to help spread information about themselves, and could also be an easy way for Twitter to raise revenue by requiring these corporate accounts to be paid accounts.

Presently, Jones writes, public companies on Twitter tend to use one of the following ineffective methods to add disclaimers to their tweets:

1. Twitter backgrounds: While companies can add disclaimer text to their Twitter account background images, many users will never see this text because they don't visit the Twitter Web site. Instead, they may use a Twitter client such as TweetDeck or Twitter’s mobile site where this text would not appear.

2. Twitter bios: While placing a disclaimer in the one-line Twitter "bio" field may be slightly more effective than putting disclaimers on Twitter backgrounds because bios are typically included in the profile information on Twitter clients such as TweetDeck, many TweetDeck and other client users will never choose to view the bio information. In addition, Twitter bios are limited to 160 characters, which is barely enough room for the typical securities lawyer to clear his or her throat.

As discussed above, however, Jones has devised a solution to this problem -- "a new 'disclaimer' parameter that could appear below each tweet and link to a page containing a comprehensive disclaimer." I think this is an excellent idea that could provide companies with a way around their current Twitter compliance dilemma. Here is Jones' mock-up of what a disclaimer link might look like:

Posted by Bruce Carton on February 26, 2010 at 02:52 PM | Permalink | Comments (1)


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