The Elements Compliance Platform

Electronic Communications Archiving & Compliance for

Email - Social - IM – SMS – Audio/Voice - Web

Undisputed leader in social media compliance providing the industry’s most robust platform for the archival, surveillance, and analysis of all forms of electronic communications

Company Overview

Erado has strong history of providing enterprise

archiving, compliance, and analytics services

• First to Introduce Social Media Archiving

• First to Introduce Embedded Hyperlink Capture

• 2012 Gartner Cool Vendor of the Year

• Patent pending capture and integration solutions

• SSAE 16 certified business and data centers

• Headquartered just south of Seattle, WA

• Excellent 4 year double digit (30+%) year over year growth rate

• Profitable, no debt, and no outside capital company

Sophisticated

Search

Surveillance

and Reporting

Email, IM

& Websites

SecureMail Encryption

Message Security

Disaster Recovery

Digital Loss Prevention

Engage™ Life

Event Reports

Business Intelligence

Email

Social Media

Instant Messages

SMS/Text

Bloomberg

Websites

Voice

Elements Compliance Platform Product Offerings

A Fully Integrated Compliance Solution

Archiving

Services

AnalyticsSecurity

Hyperlink Compliance

Capturing the Other Side of the Link

• Hyperlinks in Regulations– Sec 17a-3 & 17a-4– Investment Advisers Act of 1940 Rule 204–2, 206(4)-1– Finra 2210, 3010, 3011, NYSE Rule 342, 440, & 472

• Finra Notice to Members 10-06, 11-39, 12-29

– FRCP Rule #26 for eDiscovery

Hyperlink Compliance

Capturing the Other Side of the Link

• Surveillance and eDiscovery Issues– Incomplete Message

• Social Media post with link(s) only• Emails with link(s) only• Shortened URL (bit.ly or t.co)

– No context to message without hyperlinked data for eDiscovery or regulatory review • Potential advertising and entanglement issue

Hyperlink Compliance

Capturing the Other Side of the Link

• Finra Regulations

Hyperlink Compliance

Capturing the Other Side of the Link

• Finra Regulations

Hyperlink Compliance

Capturing the Other Side of the Link

• Finra Regulations

Hyperlink Compliance

Capturing the Other Side of the Link

• Finra’s Small Firms Conference December 2014

Hyperlink Compliance

Capturing the Other Side of the Link

• Finra’s Small Firms Conference December 2014

Hyperlink Capturing

Recent FINRA Enforcement Actions

Barclays – Instant MessagingThe Financial Industry Regulatory Authority (FINRA) announced today that it fined Barclays Capital Inc. $3.75 million for systemic failures to preserve electronic records and certain emails and instant messages in the manner required for a period of at least 10 years.http://www.finra.org/Newsroom/NewsReleases/2013/P412646 (Instant Messaging)

McKeown and Ryan – Facebook & TwitterA default judgment was entered against the defendants, ordering them to pay $3.72 million in disgorgement fees.http://www.tourolawreview.com/2013/06/securities-violations-in-140-characters-or-less/ (Social Media Facebook & Twitter)

Fidelity Brokerage Services – Email & Social Media$3.75 million. Respondents did not have a system reasonably designed to, and did not in fact, capture and/or preserve all electronic communication required to be retained. http://disciplinaryactions.finra.org/viewdocument.aspx?DocNB=12163 (Email & Social Media)

Hyperlink Capturing

Recent FINRA Enforcement Actions

Max International Broker-Dealer Corp. – Social Media$335,000. Respondent failed to notify FINRA of its intent to maintain electronic storage media and failed to store its electronic records properly. http://disciplinaryactions.finra.org/viewdocument.aspx?DocNB=22368 (Social Media)

Hicks Jr. – You TubeFINRA suspended the registered representative in all capacities for 20 business days and fined him $10,000. The broker is Ralph Hicks, Jr., who first became registered with a FINRA member firm in August 1986 and has no other disciplinary history, FINRA pointed out.http://www.lifehealthpro.com/2013/08/12/finra-finds-violations-in-brokers-youtube-video (Social Media YouTube)

Anonymous - TwitterFINRA recently suspended a California-based broker for sending a series of "misrepresentative and unbalanced” messages" on Twitter. In addition, she was also fined $10,000 according to FINRA's quarterly disciplinary report.http://www.canisuemybroker.com/2011/07/finra-cracking-down-on-tweeting.html (Social Media Twitter)

Hyperlink Compliance

Capturing the Other Side of the Link

• Social Media Hyperlink Statistics

– One in four (25%) of all advisor generated social media posts have Hyperlinks*

– On average each advisor social media account (i.e. LinkedIn, Facebook, Twitter) has 1.83 outbound posts with Hyperlinks per day*

– The estimated time it takes compliance staff to manually capture, print, and store Hyperlink data is three (3) minutes

*Statistics Generated from Erado Archived Data February 2015

Hyperlink Compliance

Capturing the Other Side of the Link

• Email Hyperlink Statistics

– Four in ten (40%) of advisor email messages have Hyperlinks*

– On average each advisor email account generates 5.14 outbound emails with Hyperlinks per day*

– The estimated time it takes compliance staff to manually capture, print, and store Hyperlink data is three (3) minutes

*Statistics Generated from Erado Archived Data February 2015

Hyperlink Compliance

Capturing the Other Side of the Link

• Firm Concerns – Technology & Cost– Technology

• Historical lack of automated hyperlink capture and archiving solution

– High cost of manual capturing of Hyperlink data• Estimated cost per advisor per year to capture Hyperlink data for

three (3) social media accounts is $2400.00**• Estimated cost per advisor per year to capture email Hyperlink

data is $1360.00**• Estimated per advisor cost $3760 per year**

** Estimated man hour cost at $60,000 per year compliance employee

Hyperlink Compliance

Solution

Erado’s Social Media Archiving

• Facebook• LinkedIn• Twitter• Blogs• Google+• Pinterest• Text/SMS• Bloomberg• Websites

• Instagram• YouTube• Vimeo• Chatter• Yammer• Lync• Cisco Jabbered• IM• Email

Content Channels

What We Capture and Archive

• Hyperlinks in the message and posts created by a monitored user are extracted and stored in the archive.

• Once the hyperlinks are in the archive, our Hyperlink archiving application automatically visits the Hyperlink location, captures, and archives a time stamped image of the link/page and any available text.

• In the event the hyperlink points to a document, image or video the content is captured/downloaded and archived.

• Capture of hyperlinks, websites, documents is subject to password, redirect, and/or paywall limitations.

Hyperlink Capturing

How Does It Work?

Hyperlink Capturing

Sample

Archived MessageArchived Hyperlink

Captured Destination

Hyperlink Capturing

Sample

Pay WallPage Not Found (404)

Page/Site Time Out

The viewing of archived hyperlink content is available exclusively through Erado’s archive and surveillance platform

Hyperlink Capturing

How Does It Work?

Next Steps

• Contact our sales department to schedule a full demonstration of our solution

• Export and provide us one weeks worth of social data and we’ll assess your current risk for free

• If you would like a copy of this presentation please email me at craig@erado.com or call 866.67ERADO (866-673-7236)

The Elements Compliance and Marketing Platform

Thank You