A Facebook post defending a drug company's stock has cost one U.S. broker $5,000 for violating financial industry social media rules.
In 2012, Charles Matisi was working at MML Investors Services when he took issue with an online article that suggested investors hold off on buying shares of Arena Pharmacueticals Inc. because its obesity drug still had a number of hurdles to clear to get to market.
Matisi said online that it was "another idiotic article on ARNA from someone who has no clue what she's talking about" and said that there is no safer weight loss drug.
At the time, Matisi owned 10,000 shares of the company worth approximately $60,000. Some 33 of Matisi's customers also owned shares of Arena Pharmaceuticals, according to industry watchdog the Financial Regulatory Authority.
FINRA says Matisi made the comment through his Facebook profile, which identified him as a financial planner at MassMutual Financial Group.
The regulatory body said that the comments were "exaggerated, not fair and balanced and omitted the material fact that he owned 10,000 shares". FINRA fined him $5,000 and issued a 10-day suspension from the association, according to a filing dated Sept. 11.
Matisi, without admitting or denying the findings, consented to the sanctions. He left MML a month after the posting and now works for Park Avenue Securities. Matisi did not respond to a request for comment Monday.
"We believe the FINRA letter speaks for itself," Mass Mutual Financial Group said in a statement. "We fully cooperated with FINRA's review of this matter and are happy it is concluded."
The company said its representatives are only allowed to engage in business-related communications on approved social media sites with appropriate supervision by the firm and in compliance with procedures designed to meet all regulatory obligations.