According to U.S. sentencing guidelines, an organization’s Culpability Score, in the calculation of fines, can be reduced if the organization[1]:
Had an “effective”compliance program in place at the time of the offenseFiled reports and ensured leadership was fully informedSelf-reported and fully cooperated in the investigation and accepted responsibility
Some aggravating factors that can increase a culpability score include leadership’s willing ignorance and prior misconduct.
Some examples of social media risk related fines:
JPMorgan never shared its doubts with U.S. authorities –$2.6 Billion[2]A broker lost his job, paid a $5,000 fine and received prison time[3]FINRA will be looking to make cases against firms for failing to supervise and maintain social media records –$900,000 & $7.5 million[4]JPMorgan was fined for poor risk controls and failure to inform regulators –nearly $1 billion[5]Xanga website fined for COPPA violations –$1MM[6]Path social networking App fined by FTC –$800,000[7]Google fined for breaking Spain’s data protection laws –$12MM[8]Failure to disclose commercially influenced blogs –$11,000 per incident
Social media risk management technology (a.k.a. social media monitoring) is an effective way to identify what is being said about a company and its products, to analyze what is being said, and to alert appropriate personnel to risks requiring management. The collected data also can serve as predictive analytics to further identify potential areas for heightened risk efforts.
Putting an effective and impactful social media risk management technology in place can:
Protect brand reputation and stock valueIncrease compliance and eliminate or reduce fines and sanctionsSafeguard against tangible and intangible losses and their resulting impact
Jim Zuffoletti, President, OpenQ, Inc.
Sources:
[1] http://www.ussc.gov/Legal/Primers/Primer_Organizational_Fines.pdf
[2] http://www.symantec.com/about/news/release/article.jsp?prid=20110721_01
[3] http://www.reuters.com/article/2013/09/16/us-facebook-finra-idUSBRE98F0TZ20130916
[5] http://www.reuters.com/article/2013/09/19/us-jpmorgan-whale-idUSBRE98I0JL20130919
[6] http://www.marketingvox.com/coppacetic_blog_site_xanga_fined_1mm-022587/
[8] http://mashable.com/2013/12/20/spain-google-privacy-violations/