The Livestream Guarantee and the Missing Script

A public appearance is a communication with the public, not a private chat.

• The medium is irrelevant. FINRA Rule 2210(f) governs public appearances - seminars, broadcast and streamed interviews, and interactive electronic forums - and Rule 2241 applies to analyst communications about covered companies. The reach (40,000 live viewers) and the platform change nothing.
• Predictions and guarantees. "Will double in 18 months" is a projection of performance, and "no way you lose money" is an implied guarantee against loss. Both are prohibited in public communications; neither can be cured by adding "in my opinion."
• Fair and balanced. A one-sided promotional claim with no discussion of the risks of an 18-month doubling thesis, no valuation support, and no contrary considerations is not fair and balanced.
• Undisclosed conflicts. The firm's co-manager role within the past twelve months and its market making should have been disclosed on the appearance; a viewer cannot be expected to look them up.
• Personal certification. An appearance must reflect the analyst's own view, and the firm must obtain her Regulation AC certification covering it.

What should exist: a pre-approval record, the outline or notes the analyst used (or the script), a record of the date, venue, and subject matter, and the analyst's Regulation AC certification for the appearance, all retained under the firm's books-and-records obligations (generally a three-year retention standard for communications and research-related records, with the first two years readily accessible).

Fixing it after the fact:

• The firm can reconstruct the appearance from the streamed recording and viewer submissions, obtain the Regulation AC certification now, and document what was said and when.
• Reconstruction is remediation, not compliance. The absence of pre-approval and of contemporaneous records is itself a supervisory and recordkeeping violation, and the reconstructed file will show that gap.
• The CCO should treat the absence of records for this and any other appearances as a systemic finding: pull the year's appearance list, identify every one lacking a file, and assess whether the same analysts repeated claims elsewhere.
• A corrective disclosure to the audience is appropriate where an actionable claim - the "no way you lose money" line - is still circulating.

The video is a separate, new violation, not a continuation.

• A 30-second clip repeating the projection is another public communication about a covered company, unapproved, unbalanced, and undated as to the underlying view. It should be taken down promptly, preserved as evidence first, and followed by a correction if it has circulated.
• Policy going forward: define which channels are approved, require principal pre-approval for any communication about a covered company, ban live unscripted appearances without a compliance briefing, require retention of scripts/notes and the recording where available, and set a rule that analysts may not restate ratings or targets outside approved formats. Training should use this clip as the example.
• Disclosures to build into every appearance: the firm's co-manager/underwriter role in the past twelve months (if any), beneficial ownership of 1% or more, market making in the security, any expected investment banking compensation, and the nature of analyst compensation. The analyst should also state whether she or a household member owns the stock.
• Supervision: the designated principal must be able to show review before the appearance and must not learn about it from a client email.