Regulating via Social Media: Deterrence Effects of the SEC’s Use of Twitter

Social media is widely used to create, disseminate, and consume information. Today, around seven in 10 U.S. adults use social media.[1] Additionally, more than half of Americans at least occasionally obtain news through social media.[2] In financial markets, investors use social media to express their opinions, and companies use it to disseminate information. Financial regulatory agencies are also increasingly adopting social media to connect with financial market participants. The SEC, for example, frequently tweets about its actions and activities.[3] Yet, we know very little about whether the SEC’s use of social media influences the behavior of entities … Read more