The securities and commodities markets have debuted on Twitter and Facebook and other networking sites, resulting in new age "socialized" or "social" investing.  Forbes's Zack O'Malley finds that the trading world is warming up to social networking - from investing groups on Facebook to Chicago pit traders who Tweet farmers looking for crop tips. 

    Brokerage Firms Are In It.   Mr. O'Malley notes 3 discount brokers that are active in this area. In January, E-Trade bought Cake Financial to allow users to share information, à la Facebook, through their brokerage accounts.  TD Ameritrade announced a feature in April that enables customers to broadcast trades with a Twitter-like service called MyTrade.  Charles Schwab recently devoted an entire pavilion at a conference for financial advisers to Facebook, Twitter and other social networking topics. 

And it doesn't stop there - all told, 70% of brokerage firms are already providing clients with some form of social media access, while one in 10 now allows them to post transaction details directly to Twitter, as per  Corporate Insight. 

    Help investors?  Create compliance headaches?   On the first count, the jury's still out on whether such trendy networking serve small investors' interests or merely encourage a costly casino mentality.  Nathan Gendelman, director of investing at The Family Firm, a MD financial-planning practice, has nothing positive to say about socialized investing.  "I can easily see a scenario for this to be a con game.  Someone with a lot of Twitter followers puts in a trade, waits for the followers to come in and push the price up, then dumps the stock and pockets the profit."

Such risks have already popped up on regulators' radar screens.  The SEC charged a Canadian couple of pocketing at least $2.4mn by using Twitter, Facebook, and other electronic means, to fraudulently tout penny stocks.  The SEC has also stated that it considers Twitter and Facebook communications just as ripe for securities fraud as e-mail and phone calls.  FINRA warned members earlier this year that "firms should consider prohibiting all interactive e-communications that recommend a specific investment product and any link to such a recommendation unless a registered principal has previously approved the content.  There haven't been many socialized networking fraud cases - but that can change on a ... tweet.   [Forbes, 11/22 Issue]